Zied Ladhari, Minister of Development, Investment and International Cooperation: Interview

Zied Ladhari, Minister of Development, Investment and International Cooperation

Interview: Zied Ladhari

How is foreign direct investment (FDI) prioritised?

ZIED LADHARI: Tunisia’s performance in attracting investment is improving significantly. Between 2016 and 2018 FDI volume increased by 44%, though 87% of FDI directed to Tunisia in 2018 was targeted at the expansion of existing projects rather than new investments. Two conclusions can be drawn from this observation. First, the high rate of reinvestment means that investors are satisfied with their experience and want to expand their presence. Second, the limited number of new investors in the total share suggests that Tunisia needs increased promotion to attract more investors.

Several initiatives, both legal and institutional, have been put in place to improve investment promotion and attract greater FDI. There have also been increased efforts to better accompany and support investors once they commit to Tunisia. In fact, in April 2019 a major set of reforms, known as the Transversal Law, was adopted to eliminate barriers to investment. Additionally, the Tunisia Investment Authority, established in 2019, is expected to become the one-stop shop for investment. Alongside other government entities, the authority provides a series of online services to national investors and operators. Considering this a top priority, the government has allocated major financial resources to implement modern information systems and digital platforms with the aim of responding more effectively and transparently to investor needs.

What reforms are taking place in order to improve the business climate within the country?

LADHARI: At the end of April 2019, the Assembly of the People’s Representatives approved the Transveral Law for improving the investment climate. This aims to facilitate greater FDI by bringing the country’s standards in line with international ones, thus improving the country’s position in the ease of doing business ranking produced by the World Bank. Specifically, we aim for Tunisia to reach the top 50 in the rankings, and to be one of the top three countries in the MENA region. The Transveral Law is a very useful piece of legislation and it is an essential update to the investment framework. It brings improvements in areas such as business creation, governance, access to credit, public-private partnerships (PPPs) and administrative procedures.

In what ways will actions be taken to support the economic development of interior regions?

LADHARI: The inland areas are an important element of the national economic development plan. The government allocates more than TD6bn ($2.1bn) annually to regions that it considers priority development zones. The investments go towards a number of projects in education, public infrastructure, lighting and sports. Furthermore, since 2011 the government has increasingly focused on decentralisation to offer more leverage to the regions. This has led to the establishment of municipal councils as well as mechanisms that promote local action from the relevant administrative authorities. Considering current budgetary constraints, the decision was made to allow regional entities to form PPPs that will help meet their needs. In terms of added incentives, tax exemptions representing up to 30% of the total investment amount are offered depending on where the investment will be directed.

How will Tunisia expand intra-regional trade?

LADHARI: Trade links with Europe are strong. Nevertheless, Tunisia is fully aware of the importance of improving regional integration. Joining COMESA has represented a big opportunity for the country. Indeed, the East African open market is composed of 19 countries and 480m inhabitants, and boasts annual GDP growth of about 4%. The country’s desire to deepen regional integration has been further demonstrated by the fact that it obtained observer status in the Economic Community of West African States and signed the African Continental Free Trade Area agreement.

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The Report: Tunisia 2019

Economy chapter from The Report: Tunisia 2019

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