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Tajikistan Wants to Borrow Another $1.4 Billion. Can He Give It Away?

A Tajik deputy asked about this at the next parliamentary meeting.

The head of the Ministry of Finance at a parliamentary meeting on November 15 told deputies that in the next three years Tajikistan plans to borrow more than $1.4 billion. To which the member of parliament, chairman of the Democratic Party of Tajikistan asked – how will we return the money?

Before the adoption of the project “Program of external government borrowings of Tajikistan for 2024 and forecast of their indicators for 2025-2026,” Minister of Finance Fayziddin Kakhkhorzoda announced that the republic plans to attract $1.4 billion in the form of loans or grants in the next three years (2024-2026 years), reports the Sadoi Mardum newspaper (publication of parliament). These funds will be used to implement 12 state agreements.

It is not reported what agreements are being discussed.

The Minister of Finance informed the deputies that the external borrowing program for the next three years is based on the provisions of the law “On State and State Guaranteed Debt”, and also complies with the standards provided for by the “Strategy for Managing the Public Debt of the Republic of Tajikistan for 2021-2023”.

According to the information provided, Tajikistan’s borrowing program for the next three years provides for 48 loan agreements, of which 36, totaling $1.4 billion, are already in the process of implementation (the same amount is planned to be raised additionally).

“It is planned to allocate loan funds for the period 2024-2026 within the framework of this program for a total amount of $1 billion 150.6 million, including $381.5 million in 2024, $377.4 million in 2025 and $391.7 million for 2026 “, the minister said.

What does Tajikistan get money for and how does it pay off debts?
Meanwhile, to the question of parliamentarian, chairman of the Democratic Party of Tajikistan Saijafar Usmonzoda to the country’s finance minister: “How will the repayment of external loans be carried out in 2024?”, the latter replied that the country has the necessary funds for this and added that Tajikistan, in principle, has no cases failure to repay loan amounts on time.

Kakhkhorzoda emphasized that all efforts in the republic are aimed at ensuring the influence of Tajikistan’s authority in the international arena (a little later, in a conversation with Asia-Plus, Saijafar Usmonzoda emphasized that he was generally satisfied with the response of the Minister of Finance).

“$212.2 million was spent on servicing external debt. Of this amount, $139 million represents the principal debt, and $73.2 million is interest on the loan,” he said.

By October 1, 2023, the country’s total public debt was $3.6 billion—30.8% of gross domestic product. Of this amount, $3.2 billion (or 89%) is external debt, and $0.4 billion (or 11%) is internal debt.
Further, at a parliamentary meeting, the Minister of Finance noted that the draft law “On the state budget for 2024 and forecast indicators of the state budget for 2025-2026” on external debt provides for the disbursement of external debt in excess of $1.3 billion. It includes: $283.9 million for 2024, $453.7 million for 2025 and $498 million for 2026.

In the first 10 months of this year, $89.1 million of the funds raised was disbursed, and $124.4 million is planned to be disbursed by the end of 2023.
The Minister of Finance also said that in the first 10 months of this year, two loan agreements were signed for a total amount of $19.5 million. In particular, an agreement was concluded with the European Bank for Reconstruction and Development for the implementation of the project “Renovation of the Kairakkum National Park” for $10 million and a guarantee agreement with the Islamic Development Bank for the implementation of the project “Promoting the implementation of the national strategy for the development of education” for $9.5 million.

Source: Asia Plus TJ