Tunisia: Going from strength to strength
If the African north coast is an arch, then Tunisia could be its key stone. This country of 11 million people sits almost in the centre of the arch and is almost the right shape for a key stone. The country uses its geographic position to offer itself as a gateway to the rest of Africa and not just its fellow francophone countries. At an event in London in late September, several UK-based companies outlined how they had successfully used Tunisia as a springboard to opportunities further afield in Africa. A private equity company described how investments in educational and health businesses in Tunisia had allowed it to prove its credentials and capture opportunities in Morocco and Ghana. A small British energy company reported how projects in Tunisia had led to projects in other African countries including Cameroon and Tanzania.
Tunisia’s attraction as an investment destination and Africa gateway is not just down to its geographic position. The government has put in place investor friendly laws and regulations. These include low tax rates, 100% foreign ownership of companies and land and reduction of bureaucracy. The country boasts a highly educated workforce, ranking third in the world for the proportion of postgraduate degrees in science and engineering. Tunisia also possesses high quality infrastructure including roads, ports, airports and telecommunication links. These advantages combine with low labour and energy costs to make Tunisia an attractive investment destination.
The investment and trade opportunities are diverse. Tunisia has a well developed agricultural sector. It is the number one exporter of both dates and olive oil in the world. It is also the second largest producer of organic produce in Africa. The country’s low labour and energy costs also make it an attractive manufacturing base. It is the second largest producer of components for the automobile sector in Africa as well as producing construction materials, electronics and a range of other products. In addition, it has a strong financial services sector and is used as regional base by a number of institutions. Tourism is also an important sector but has been hit hard by a series of terrorist attacks including an attack against British tourists in June 2015.
The terrorist attacks were part of the turbulence following the Jasmine revolution that sparked the revolutions of the Arab Spring in December 2010. However, unlike many of the other Arab countries that experienced revolt, Tunisia has emerged as a functioning democracy and achieved a remarkable level of stability. The country’s progress was recognised in 2015 with the award of the Nobel Peace Prize to four Tunisian organisations that played a leading role in the transition to democracy. While Tunisia, like most countries around the world is not immune to terrorism, the government has improved the security situation. The British Foreign Office now considers it safe for tourists to visit most parts of the country.
The political turbulence and violence of recent years has taken its toll on economic performance. Rates of GDP growth and investment have slowed. The budget and current account deficits have grown and the country has fallen several places in international business rankings. However the government’s efforts to boost the economy are showing progress. Tunisia is expected to record its highest annual GDP growth in 2017 since the revolution and there is increased interest from international investors. Part of Tunisia’s strategy is to strengthen its relations with countries that have not been traditional partners i.e. countries outside the French speaking world.
Business in Tunisia is increasingly conducted in English rather than French. Hence the event in London in September to boost relations with the UK and particularly London as an international finance centre. A substantial delegation of Tunisian business leaders organised by the Tunisian-British Chamber of Commerce visited London. The delegation included the newly appointed minister for investment, Zied Laadhari. This was his first overseas visit as minister and London was a deliberate choice to demonstrate commitment to building relations with the English speaking world. There was no need for translators at the event as all the delegation spoke excellent English. Tunisia is emerging as an important country to access trade and investment opportunities in Africa, which in turn is emerging as an increasingly lucrative source of business opportunities for companies of all sizes.