Tunisia has reached a preliminary agreement with the IMF on a $1.9bn loan designed to help alleviate the North African economy plagued by food and fuel shortages.

The deal, which was announced late on Saturday and is yet to be ratified by the IMF board in December, is expected to open the door to loans from other donors awaiting the reassurance that the heavily indebted country was committed to reforms, which form part of the package.

Before the agreement, some analysts were predicting Tunis would not be able to meet its debt repayments and would likely default.

This will be the third agreement between Tunisia and the IMF since 2013 and diplomats have warned in recent months that the country has failed to implement previously agreed reforms.

These included reducing subsidies, privatizing state-owned enterprises and cutting civil service wage cost, which is seen as one of the highest in the world relative to the size of the economy. The Tunisian government had “already taken steps to contain the civil service wage bill and started to gradually phase out generalized wasteful price subsidies”, the IMF said on Saturday.

It said the loan would help Tunisia restore fiscal stability, “enhance social protection and promote higher, greener and inclusive growth and private sector-led job creation”. Elements of Tunisia’s reform program include increasing targeted cash transfers to the poor and expanding the social safety net for vulnerable families affected by price rises, according to the IMF.