Industry & Retail
From The Report: Tunisia 2017
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Since the 1970s Tunisia has opted for an economic model geared toward exports and industrialisation, sustained by the implementation of investor-friendly legislation, as well as supportive public investment in infrastructure and human capital. The approach has been successful for decades, with manufacturing forming the basis of GDP growth over the last 40 years. However, manufacturing industries experienced a dip in production during the post-revolution years as a result of broader instability, more frequent labour disputes, a slowing of capital spending and heightened international competition. The challenges are far from minor and, in the broader context of the macroeconomic slowdown, industrial producers have some way to go. However, as a whole, the economy benefits from some encouraging fundamental traits, and growth in Tunisia is projected to improve in 2017 and 2018 on the back of new capital spending on transport infrastructure and a new law governing investment, which came into force in 2017, and which is expected to shore up investor confidence and stimulate activity. As in other North African markets, the Tunisian retail sector has been predominantly controlled by a myriad of small shops. However, modern distribution channels have gradually emerged over the past 15 years with the expansion of international supermarket chains and franchises across the country. Despite some economic downturn, the modern distribution sector has continued to thrive, with the expansion of international franchising and supermarket brands, and the proliferation of large retail outlets. During the next few years the sector is expected to keep posting strong growth, driven by a growing population and rising purchasing power. However, from a purchasing power standpoint, retail performance will also be reliant on the country’s capacity to attract foreign tourists, boost the economy and create jobs.

This chapter contains an interview with Habib Fekih, President, Airbus Africa and Middle East.

Articles from this Chapter

Overview

Variety and diversity: Investors have a wide range of options across the manufacturing field, with a diverse line-up of segments
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Since the 1970s Tunisia has opted for an economic model geared toward exports and industrialisation, sustained by the implementation of investor-friendly legislation, as well as supportive public investment in infrastructure and human capital. The approach has been successful for decades, with manufacturing forming the basis of the country’s GDP growth over the last 40 years. A wide variety of subsectors has thrived, including textiles, agri-business, pharmaceuticals, and mechanical, electrical…

Analysis

Cautiously optimistic: Addressing risk and securing new production can safeguard the country’s position as a major phosphate player
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Tunisia has extensive experience in phosphate mining and fertiliser production, as the country’s first mines opened in the late 19th century. Tunisia relies on substantial reserves of phosphate rock, which is estimated at 900m tonnes and regulated by the National Office of Mines. As its stands, phosphate accounts for 2% of Tunisia’s GDP and employs about 27,000 people. In recent years, production has sharply declined due to recurring labour disputes, but the sector may see revived growth…

Interview

Taking flight: Habib Fekih, President, Airbus Africa and Middle East, on emerging market growth in the aviation industry
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Interview: Habib Fekih How can host countries attract more investment and finance in the aviation sector? HABIB FEKIH: Aircraft manufacturers look for the following characteristics when evaluating host countries: an abundant pool of skilled workers, adequate transport infrastructure and logistics services, a supportive government and safety. Host countries should pay special attention to the development of human capital; some stigmatise those without a university degree and do not sufficiently…

Analysis

Consolidating growth: Production capacity in aeronautics is expected to diversify to cover more of the sector supply chain
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Aeronautics has been one of Tunisia’s fastest-growing industries since 2003, posting double-digit annual growth rates even after the 2011 revolution. The country has leveraged its proximity to Europe and specialises in low-cost component manufacturing. Between 2006 and 2016, the sector saw its turnover leap from TD30m (€12.9m) to TD535m (€229.4m), with many new companies entering the market. The government is thus looking to consolidate the sector’s fast-paced growth and further…

Analysis

Spirit of competition: The textiles industry is looking to innovate while capitalising on domestic strengths
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As a labour-intensive and export-oriented industry, textiles was the first manufacturing segment to benefit from the creation of an offshore regime in 1972. For around 35 years the sector was one of the main engines of GDP growth, benefitting from easy access to European markets and a competitive workforce. Since 2008, however, the industry has slowed as a result of the expiration of the Multi Fibre Arrangement (MFA) in 2005 and labour unrest after the 2011 revolution. To revive growth and…

Overview

Turning the corner: A clarified franchising regime and growing domestic demand are fuelling optimism in retail
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As in other North African markets, the Tunisian retail sector has been predominantly controlled by a myriad of small shops. However, modern distribution channels have gradually emerged over the past 15 years with the expansion of international supermarket chains and franchises across the country. During the 2011 revolution, many supermarkets were looted or destroyed – leading to a temporary disruption in activity – but the sector has rapidly recovered and has since experienced double-digit…