A Record Dividend for the Tunisian State: Debunking the Myth of the Central Bank's Allegiance to Commercial Banks
A significant portion of the political class and the majority of Tunisians on social media have been relentless in their attacks on the Central Bank of Tunisia, accusing it of favoring the interests of commercial banks over those of the state. However, they seem to have overlooked the financial statements of the institution. This year, the state has benefited from a record dividend, unprecedented in Tunisia's history, amounting to 1,054,762 million Tunisian dinars (Mtnd). To our knowledge, this is also a first in the history of public participations.
These profits are the result of the tightening of monetary policy and the Treasury's activity on the internal debt market. As a result, the state has been able to recover 47.9% of what it paid in interest on its internal debt in 2023. If we also take into account the 20% withholding tax, we find that the net financial cost of local loans last year was only 704,518 Mtnd. This is not a zero-sum game, but the real impact on public treasury is much less significant than perceived.
For context, this dividend represents the bulk of what the state expects to generate from all its participations. In the 2024 finance law, the target is set at 1,260 million dinars, and thanks to the Central Bank's contribution, this objective will be largely exceeded.
In total, over the period 2011-2023, the Central Bank has distributed a total of 5,393,984 Mtnd in dividends to the state, making it the largest enterprise in Tunisia.
Those who oppose the current system must also consider a second element in the equation when evaluating its virtues and flaws. Commercial banks, which are making a profit, are also the largest contributors to corporate tax. Every time there is a crisis, these institutions have supported an exceptional additional tax, which will be the case this year as well. Therefore, calling for the dismantling of the entire system without considering the financial implications makes no sense. While there are areas for improvement in bank performance and public management, this can only be achieved gradually and with the engagement of all stakeholders.