Economy
From The Report: Tunisia 2019
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While Tunisia remains a country with a number of strong assets on which to base future development, challenges of the last few years have slowed policymakers’ drive to adequately plan and execute necessary reforms to make the economy more competitive. However, several measures implemented by the government in 2018 and 2019 are helping to clear a path for Tunisian entrepreneurs, which is hoped to help reduce informality. Still, to successfully implement a new growth dynamic over the medium term, Tunisia will need to establish a clear consensus about economic reforms. For instance, public sector reform, although unpopular under the current environment, is also still seen as critical to reverse Tunisia’s unfavourable budgetary position. This chapter contains interviews with Zied Ladhari, Minister of Development, Investment and International Cooperation; Abdelbasset Ghanmi, General Manager, Foreign Investment Promotion Agency; and Samir Majoul, President, Tunisian Union of Industry, Trade and Handicrafts.

Articles from this Chapter

Overview

Reforming to grow: Government measures strive to improve budgetary standing and create an entrepreneurial ecosystem
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Long-viewed as an open economy with a unique geographic position at the centre of the Mediterranean, Tunisia has had difficulty in managing the macroeconomic situation following the 2011 revolution. Budgetary pressures, combined with a strong devaluation of the dinar and a rise in the level of business informality, have made the current environment a challenging one. However, a host of structural reforms is being implemented and improved performance in some of the country’s key sectors are helping…

Interview

Investing in the future: Zied Ladhari, Minister of Development, Investment and International Cooperation, on fortifying the business climate
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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…

Analysis

Change is here: Newly ratified legislative reforms standardise rules and support the business environment on multiple levels
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On April 24, 2019 the Assembly of the People’s Representatives approved a set of legislative reforms to simplify business creation, ease access to finance, facilitate public-private partnerships (PPPs) and strengthen company governance. Of the 38 articles in the Loi Transversale (Transversal Law), 28 are specifically intended to improve the business environment. One of these measures, slated to run until the end of 2020, offers state support on interest payments for investments that are made by…

Analysis

Enlarging the base: Reducing informality will be key to increasing tax revenue
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As Tunisia attempts to balance its budget and free enough financial resources for investment programmes, dealing with the rise of business informality and tax evasion has become of paramount importance. Although exact figures on the issue are difficult to quantify, studies point to an increase in the volume of informal activity following the 2011 uprising. Government officials have estimated that tax evasion in 2018 amounted to TD25bn ($8.7bn). Moreover, the Tunisian Institute for Strategic Studies…

Interview

Strong headway: Abdelbasset Ghanmi, General Manager, Foreign Investment Promotion Agency, on the importance of human resources, and the benefits of international and institutional cooperation
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Interview:Abdelbasset Ghanmi In what ways have legal and regulatory changes helped Tunisia make headway in attracting foreign direct investment (FDI)? ABDELBASSET GHANMI: The total volume of FDI in 2018 rose by 28.6%, to stand at TD2.7bn ($937.8m). These levels are close to those seen in 2010. A significant share of investment is directed towards the extension of existing business activities. We consider this to be an example of the increasing confidence that operators have in Tunisia’s…

Interview

Stimulating growth: Samir Majoul, President, Tunisian Union of Industry, Trade and Handicrafts, on creating the conditions necessary for local businesses to thrive
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Interview: Samir Majoul What measures can the central bank take to help boost private investment in domestic companies? SAMIR MAJOUL: The Central Bank of Tunisia (Banque Centrale de Tunisie, BCT) should seek to implement a monetary policy that guarantees controlled inflation, an investment-friendly interest rate, currency stability and an effective currency exchange framework. We have held regular meetings with the BCT to find the best ways to achieve these objectives. Coordinating the BCT’s…

Overview

Business Barometer: Tunisia CEO Survey:
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Despite GDP growth struggling to reach pre-2011 levels, the government estimated growth of 2.5% in 2018 and has forecast it will reach 3% in 2019. Two pieces of legislation introduced since 2018 should aid this expansion and provide a degree of increased confidence. The Transversal Law aims to improve business conditions while the Start-up Act will support small businesses. Indeed, the plurality of CEOs interviewed in the latest OBG Business Barometer: Tunisia CEO Survey remain cautiously optimistic, with half saying that they have positive or very positive expectations of local business conditions over the coming 12 months. For more information…

Analysis

Private drive: A large portfolio of projects is hoped to spark investor interest
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As a strained budgetary situation has been a challenge to public investment, efforts have been made to encourage the private sector to take on a larger share of necessary works. To attract the interest of foreign and domestic investors, Tunisian authorities have strengthened the regulation overseeing public-private partnership (PPP) agreements and launched an ambitious project portfolio. The PPP Law was adopted in November 2015 after passing a parliamentary vote. One key element of the legislation…