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Foreign tourist numbers up 23 percent in Tunisia in 2017

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TUNIS (Reuters) – The number of foreign tourists in Tunisia rose by 23 percent in 2017 compared with the previous year, official data showed, indicating that a vital industry crippled two years ago by Islamist attacks is recovering.

Tourism accounts for about 8 percent of Tunisia’s gross domestic product, provides thousands of jobs and is a key source of foreign currency, but has struggled since two deadly militant attacks in 2015.

A total of 6.731 million tourists visited the North African country in the year until Dec. 20, data provided by the presidency showed.

The number of European tourists rose by 19.5 percent to 1.664 million, the data showed. The number of French visitors rose by 45.5 percent and the number of Germans by 40.8 percent in the same period.

The number of Algerians visiting rose by 40.5 percent to 2.322 million.

Tunisia’s tourism revenues rose by 16.3 percent to 2.69 billion dinars ($1.09 billion), data showed.

In 2010 Tunisia’s tourism revenues had hit a record at 3.5 billion dinars with almost 7 million tourists visiting.

The rise is helping the government weather an economic crisis as it plans to raise taxes from 2018, part of reforms agreed with the International Monetary Fund in return for a loan package.

High unemployment has driven youth to seek illegal migration to Europe.

($1 = 2.4758 Tunisian dinars)


(Reporting by Mohamed Argoubi; Writing by Ulf Laessing; Editing by Louise Heavens)

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Tunisia central bank holds key interest rate unchanged at 4.25 percent

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TUNIS (Reuters) – Tunisia’s central bank has kept its key interest rate unchanged at 4.25 percent, an official in the bank said on Tuesday.

The bank last cut its main interest rate in October from 4.75 percent, in a bid to boost economic growth as inflation fell.


(Reporting By Tarek Amara; Editing by Janet Lawrence)

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Tunisia struggles to attract foreign investment

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tunisia oil

Tunisia reports slowed growth as international companies show concern about the difficulty of extracting oil and phosphates as well as high taxes.

Growth of foreign investment in Tunisia has slowed amid concerns about a lack of government incentives and the difficulty of extracting the North African nation’s oil and phosphates.

Direct foreign investment in Tunisian industry amounted to $81 million in the first four months of 2016, an increase of less than 5% over the same period in 2015. A year earlier, direct foreign investment had doubled as the country adopted its first constitution and formed a government in the aftermath of Arab Spring.     

Tunisia lacks appeal to investors for a number of reasons, according to experts.

“Insecurity, high taxation and the difficulty of extraction of potential reserves are the main obstacles that prevent Tunisia from being attractive to foreign investors,” said Radhi Meddeb, chief executive officer of the engineering company Comete.

Tax policy cited

Only 15% of oil company executives believe Tunisian tax policy encourages investment, according to Global Petroleum Survey 2015.

Under the nation’s tax policy, the state gets 80%of the revenue on the sale of oil while the operating companies receive only 20%, even though they bear all of the costs with no help from the government.

Tunisia also has more limited reserves than other sources of oil and phosphates. The Global Petroleum survey estimated the country’s oil reserves amount to the equivalent of about 850 million barrels, compared to nearly 24 billion in Texas. Reserves of phosphates amount to 100 million tons, 20 times less than in Algeria.

While relatively stable compared to other nations that were part of Arab Spring, Tunisia is not immune to political and economic upheaval. For example, Gafsa Phosphate posted nearly $10 million in losses in 2014 amid recurring strikes by transport workers.

Production drops sharply

While 50 foreign companies were operating in the extraction industry in 2010, when the Arab Spring began, fewer than half that many operate in Tunisia today.

Nationally, phosphate production has dropped by nearly 60%, from 8.5 million tons in 2010 to 3.5 million tons. Oil production has fallen by half, from about 90,000 barrels a day in 2009 to 45,000 this year, according to Trading Economics.

On the plus side, Tunisia has announced it will join the Initiative for Transparency in the Extractive Industries, a global standard that promotes accountability and fights corruption in the use of revenues from extracted resources.

Tunisia first applied to join the initiative in 2012, but political instability prevented its membership, according to Kais Mejri, head of governance at the Ministry of Industry.

Tunisia believes that the initiative will make the nation more attractive to foreign investors compared to rivals who are not part of the initiative. “We hope to return next year to the same (foreign investment) rates as before 2011,” said Ridha Bouzaouada, Tunisia’s Director General for Industry.

Part of larger, regional struggle

Tunisia is not alone in its economic challenges.

More than five years of turmoil across the region has created a negative economic outlook, according to Hamdi Tabbaa, president of the Arab Businessmen Association.

Tabbaa estimated regional economies have lost about $1.2 billion in the past five years as Syria, Iraq, Yemen, Libya, Egypt, Lebanon and Tunisia saw an average decrease of 35% in their gross domestic product.

Direct foreign investment in the region was also dropping. It declined from $48 billion in 2014 to $44 billion last year, well under half of the record high of $96 billion in 2008, according to the Arab Investment and Export Credit Guarantee Corporation.

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Tunisia’s dinar hits record lows over tourism, economic data

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TUNIS (Reuters) – Tunisia’s dinar currency has fallen to record lows versus the euro and the U.S. dollar this week as weaker exports, lower investment and a plunge in tourism revenues have eroded the country’s foreign reserves.

The dinar traded at 2.47 against the euro and 2.13 against the dollar on Wednesday and on Thursday was at 2.43 versus the euro and 2.16 against the dollar, according to central bank figures.

The government was expected to announce new measures on Monday aimed at stabilizing the currency. The North African state’s tourism industry has been shattered by two major Islamist militant attacks on foreign visitors last year.

“The record drop in the value of the dinar is caused by lower exports and a lack of investment that have lowered foreign exchange reserves,” central bank director Chedli Ayari told reporters in parliament on Wednesday.

He said the central bank would not interfere to halt the slide in the dinar because “the level of reserves is still average… and reflects the reality of the Tunisian economy.”

Exports fell 2.6 percent during the first five months of the year while foreign direct investment dropped 5 percent to $268 million in the same period compared to a year earlier, according to government statistics.

Tourism, which comprises 8 percent of GDP and is a key source of foreign revenue, has been struggling.

Islamic State gunmen attacked the Tunis Bardo museum and a Sousse beach hotel packed with tourists within a 3-month period last year, prompting many tour operators to suspend visits to the North African country.

Tunisia’s government is currently trying to push through reforms and some austerity measures to curb its deficit, among the measures demanded by international lenders such as the International Monetary Fund and the World Bank.

Government spokesman Khaled Chaouket said officials would next week announce measures meant to arrest the fall of the dinar including commerce ministry initiatives. Some analysts expect these to include restrictions on luxury imports.

The weakened dinar may boost smaller local exporters by making their products cheaper abroad, but could also make debt service payments tighter and widen the deficit if the government does not act, said local financial risk expert Mourad Hattab.

“The dinar has never been at these levels against the dollar and the euro,” he said. “But there is a tendency for the financial authorities not to interfere because it is part of the reforms the IMF is demanding.”


(Reporting by Tarek Amara; Writing by Patrick Markey; Editing by Mark Heinrich)

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Why Tunisia Believes Exports May Ignite Recovery

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Due to political instability and terrorism, Tunisia has been struggling economically. Could exports be the solution?

Tunisia’s economy had been in a fragile condition for many years. Still reeling from the global financial crisis, the Arab Spring uprisings left Tunisia and many other North African economies stagnant as a result of the regional instability. The problem was further compounded by risk adverse foreign investors, who came to view countries in the region as unattractive prospects.

Then came the terrible terrorist incidents of 2015. The attacks were designed to undermine the Tunisian economy, and they were successful in doing so. The portents were dire for a country in which tourism accounted for 14.9% of GDP in 2014, whilst employing approximately 12% of the working population.

Exports as the answer

A full-on financial crisis was fortuitously averted by the slump in global oil prices, combined with a good year for Tunisian exports of olive oil. Olive oil production on the European continent was hampered by a historically poor harvest in 2015. Yet Tunisia enjoyed record harvests, which enabled the beleaguered nation to quadruple its export revenues of olive oil from US$ 250 million in 2014 to in excess of US$ 1 billion in 2015. These factors have helped Tunisia narrowly avoid the fiscal brink; additionally they have illuminated a potential escape route from the economic wilderness.

The boom of last year’s olive oil season has set events into motion, as Tunisia can ill afford to let such a success become a one-off. Fortunately the EU has realized this, and in an effort to assist Tunisia they doubled the country’s olive oil export quota back in September 2015. If high production can be maintained, Tunisia can become a perennial player in this area. However, in a microcosm that reflects the overall Tunisian economy, Tunisian olive oil products are exported in their most basic and least valuable form. Value and jobs can be added by exporting refined, branded bottles as opposed to the current situation: exporting raw olive oil that is refined and branded by Spanish or Italian firms.

Transitioning to the exportation of more diversified and sophisticated products is something that would benefit other sectors within Tunisia. As an example Tunisia currently exports crude oil. However efforts are being made to finance and build the necessary facilities that will allow for the exportation of refined oil products. As with olive oil, this will create jobs and generate more revenue from the countries resources.

What needs to be done

At a recent conference to discuss the promotion of Tunisian exports, the President of the Tunisian Confederation of Industry Trade and Handicrafts, Wided Bouchamaoui, highlighted the value that an increased focus on exportation would bring to the economy: “Tunisia could raise the value of its annual exports to 100 billion dinars in the next decade.”

However, if such targets are to be achieved, continued oversight will be needed. Due to government intervention, the Tunisian dinar has been overvalued for many years, subsequently hampering exportation as Tunisian goods have been comparatively expensive. In an attempt to remedy the situation the Tunisian Central Bank has allowed the Dinar to depreciate in a controlled fashion. Despite this, the currency is still overvalued by as much as 15% according to some analysts. Further controlled depreciation is an ugly necessity, should Tunisia want its goods priced properly on the international market. This would serve as the catalyst to stimulate Tunisian exports and help reduce the trade deficit (US$ 6.6 billion).

The painful fallout from this policy is that for ordinary citizens their savings have lost value and their buying power has been reduced. The government finds itself in a precarious, high stakes situation: risk social unrest by allowing the currency to slide further, or hamstring the export-led recovery by giving in to public pressure.

Additionally, Tunisia has a major problem with illegal cross border imports and exports, a legacy from the Zine El Abidine Ben Ali regime. These activities undermine the country’s legitimate export enterprises, discourage foreign investors and deprive the state of taxable revenues. Whilst the current government has taken some steps to eradicate these practices, more must be done to legitimize all cross border trade.

If managed correctly, the export industry can be used as a major weapon in the Tunisian economic recovery. The benefits are numerous: exports can generate much needed revenue for the nation, tackle high unemployment, rebalance the trade deficit, generate new industries and encourage long-absent foreign investment in the country.

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Carlyle sets up $500 mln Europe, N.Africa energy vehicle

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LONDON (Reuters) – Carlyle Group on Monday announced an investment in Tunisia-focused oil and gas explorer Mazarine Energy which will also receive $500 million to make bolt-on acquisitions in Europe and North Africa.

The deal is the first investment in over a year for Carlyle International Energy Partners, the private equity firm’s overseas oil and gas investment fund, which has more than $2.5 billion at its disposal, CIEP head Marcel van Poecke said.

The size of the investment in Mazarine was not disclosed.

Private equity funds including Carlyle, Riverstone and CVC Partners have built up significant firepower in recent years to invest in the oil and gas sector which has struggled following the collapse in oil prices since mid-2014.

“I think we will see more deals this year. Very slowly the M&A (merger and acquisition) space is starting to pick up,” van Poecke told Reuters.

Mazarine will seek investments in “low cost, low-risk opportunities” in onshore exploration and production assets, Chairman and founder Edward van Kersbergen told Reuters.

The company will focus on onshore fields in Romania, where CIEP acquired assets in March 2015 from Sterling Resources, as well as North Africa.

“We want resources that we can develop in a relatively short space of time at a low technical cost,” van Kersbergen said.

In Tunisia, Mazarine expects to start production of 1,500 to 2,000 barrels per day next year, according to van Kersbergen.

CIEP has in recent years created two companies to invest in assets in the North Sea and the Indian subcontinent.

Neptune, the North Sea vehicle set up by CIEP and CVC Partners a year ago which is headed by former Centrica boss Sam Laidlaw, was expected to make an investment over the next 12 months, van Poecke said.



(Reporting by Ron Bousso; editing by Jason Neely and David Evans)

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Tunisia’s central bank holds key rate unchanged at 4.25%

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TUNIS (Reuters) – Tunisia’s central bank kept its key interest rate unchanged at 4.25 percent, the spokesman of bank said on Friday.

The bank last cut its main interest rate in October, from 4.75 percent, in a bid to boost economic growth as inflation fell. Inflation was 4.9 percent in 2015, down from 5.5 percent in 2014.


(Reporting By Tarek Amara; editing by Patrick Markey)


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A great season for Tunisia’s olive oil

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tunisia olive oil

The EU has granted Tunisia a 2 year tax break on the import of olive oil; now it is down to the country to make it a top seller.

Producers of olives and olive oil since Roman times, Tunisia has stuck to a tried and tested method of harvesting this ancient fruit. Due to relatively cheap labor still on offer in the country, the olives benefit from being gathered using a technique of gentle sweeping with small rakes by a mostly female workforce.

Said to help retain the flavor of the olives and cause less damage to the trees, handpicking prevails over the commonly adopted method of machine harvesting in Europe. In order to distinguish themselves on the global market, maintaining the best flavor from their olives and being able to confidently ensure a pure product is paramount. “We can say that our bottled oil is 100% Tunisian and that counts for a lot in specialty shops. This is something Italy cannot always guarantee,” said Lemia Thabet, Executive Director of the Tunisian Technical Packaging Centre.

New lease on life for ancestral industry

Tunisia is the biggest producer of olive oil outside of Europe, yet for such a prolific producer the northernmost country in Africa has up until now remained decidedly in the shadows of its European counterparts. It has settled instead for selling off large quantities of oil to rival countries such as Spain, the biggest producer in Europe, and to Italy, commonly thought of as the home of olive oil. The wholesale olive oil is then mixed with the local kind, by way of improving on what will become the big brands we are all familiar with. In this way the “liquid gold” Tunisia produces is generating far less money than if they had the means to bottle, package and label the product on their own.

Tunisian olive oilOn 10th March, 2016, the European Parliament agreed upon an initiative to allow the country to export tax-free olive oil for two years, limited to 35,000 tons per year. The reason for the tax break is in part due to the particularly bountiful spell that Tunisia has been experiencing compared with the rest of the world. Records released by the Tunisian Ministry of Industry, Mines and Energy showed that for the 2014-2015 season, Tunisia exported more than any other country worldwide. In a record-breaking harvest, overseas sales reached 299,300 tons, which equates to a massive 10 percent of the global olive oil consumption. This earned the country, which has a 3,000-year history of olive-farming, a respectable $976 million. “Our record harvest has coincided with a shortfall in international production,” said Abdellatif Ghedira, the head of the government’s National Oil Office. “This year we are the world’s second-largest producer.”

Olive oil economy

Accounting for over 10 percent of Tunisia’s exports and providing a livelihood for hundreds of thousands of people, it is unquestionable that the olive oil trade is of major importance to the country, coming second to tourism. However, after the devastating effects of 2015’s Bardo Museum terrorist attacks and the Sousse beach massacre, what once was the nation’s linchpin, generating 15 percent of the country’s GDP in 2014, is now a sector worryingly in decline.

Bereft of some one million foreign visitors last year, the economy is in crisis and the security of the nation as well, as the somber climate has given rise to expanding terrorism. Recognizing the terrible blows Tunisia has been dealt over the past year and the promise the country had shown for real democratic change, the EU stepped in. A declaration of political support is the primary reason for implementing the measures, in hopes that it will allow the Tunisian economy enough time to recover. “Exceptional times call for exceptional measures. The proposal is a strong signal of EU solidarity with Tunisia,” said High Representative of the European Union, Federica Mogherini, adding, “Tunisia can count on the EU’s support in such a difficult time.”

Promoting the future

The tax break may come as a temporary relief but other obstacles still lie in the paths of the country’s producers. To truly make a success of this opportunity they first need to contend with a market that is very much geared towards promoting Spanish and Italian olive oil as superior. Also for the most profit to be made the entire production process would have to take place on home turf. “We buy almost all our bottles and stoppers from Italy and that pushes up the price, we should be making our own,” said expert Mounir Ouhrani of Slama Huiles.

While there may be some hurdles along the way, Tunisia can rest assured on the product they have to offer. A country that is covered with 1.7 million hectares of olive trees, almost 20 percent of the olive tree orchards worldwide, they are no small fry. The uniqueness of the olive oil they produce is remarked upon internationally; a particularly rich flavor that due to its high fat content is able to withstand high temperatures while still maintaining its notable nuttiness. Pair this with the traditional way in which the olives are harvested and you have two solid reasons why the North African country could make a successful breakthrough onto the global olive oil market. Given the chance and an audience who are willing to look beyond the norm, olive oil could soon be Tunisia’s number one industry.

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IMF says in advanced talks with Tunisia over $2.8 bil credit

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TUNIS (Reuters) – The International Monetary Fund and Tunisia are in the advanced stages of talks over a $2.8 billion credit over four years to help support the country’s economic reform programme, an IMF delegation said on Thursday.

A visiting IMF delegation said at the end of its mission that it would now focus on fine-tuning reform priorities and financing needs for this year.International lenders have been demanding Tunisia cut public spending, reduce deficits and introduce reforms that help create sustainable jobs and growth.

“Moving ahead with economic reform is crucial as the Tunisian economy confronts several significant challenges. Economic growth is held back by investors’ wait-and-see attitude and regional uncertainties,” the IMF said in a statement.

Five years after overthrowing autocrat Zine El Abidine Ben Ali and sweeping in democratic change, Tunisians are still struggling with an economy unable to deliver the jobs and reforms their revolution promised.

Three major militant attacks last year, including two on foreign visitors, have battered the tourism industry, while a week of rioting earlier this year has worried Western partners looking to help the North African state.


(Reporting by Tarek Amara; writing by Patrick Markey; Editing by Toby Chopra)

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Tunisia seeks to improve appeal to foreign investors

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A proposed investment code offers incentives to investment as the country aims to double investment to $2.5 billion by 2020.

Tunisian government officials hope to speed up implementation of a code that the North African nation hopes will make it more attractive to desperately needed foreign investment.

As its economy struggles in the aftermath of the 2011 revolution, Tunisia hopes to double foreign investment to $2.5 billion by 2020.

The Tunisian cabinet recommended hastening adoption of an investment code in February following protests a month earlier over high unemployment that included clashes with police in several towns and the capital of Tunis.

The protests were a grim reminder to the government that poor economic conditions, including high unemployment, prompted demonstrations that ended the 23-year presidency of Zine El Abidine Ben Ali during the 2011 revolution in Tunisia.

Incentives, smooth path for investment

The proposed investment code, which must be approved by the Tunisian parliament, is designed to clear administrative obstacles by creating an agency to smooth the way for companies to invest within the country, according to Yassine Brahim, Tunisian minister of development, investment and international cooperation.

The code will include financial incentives for investors, especially companies that intend to export from Tunisia and those that invest in poorer interior sections of the country.

It also will give international investors more flexibility to transfer funds out of the country, Brahim said.

Tax exemptions offered

Yassine Brahim

Yassine Brahim, Tunisian minister of development, investment and international cooperation.

Tunisia already offers significant incentives to potential investors, including a 10-year tax exemption, and, in some locations, state subsidies. The government also created industrial zones and promised significant investments in improving roads and other infrastructure.

The investment is sorely needed as the country struggles with an overall unemployment rate of 15 percent and a rate of 32 percent among college graduates. The country’s economy in 2015 grew by less than 0.3 percent.

Tunisia is generally seen as the one success story from Arab Spring, which also saw violent revolts in nearby Egypt and Libya.

However, Tunisia has struggled to form a government and improve its economy.

Civil unrest returns amid high unemployment

In January, economic conditions and regional inequalities prompted the worst civil unrest in the country since the 2011 revolution.

Protest that began in Kasserine in the central part of the country spread to several other towns and to Tunis, where shops were looted and burned. Frustrations ran highest in marginalized rural areas and in poor urban districts of the capital.

Tunisia also lost about a third of its tourism revenues in 2015 after two Islamic State attacks killed 59 foreign tourists.

Government proposes bond issue

In February, the government announced that it was preparing a bond issue of up to one billion euros to cover a budget deficit stemming from losses from January’s unrest.

Violence and unrest has kept investors away. An estimated 300 investors have left the country since 2011.

For example, one Bahraini official recently told Tunisian President Béji Caied Essebsi that Bahraini business leaders are interested in investing in the country and a delegation would visit from Bahrain.

However, Khaled Abderrahmen Al Moyed, president of the Bahraini Chamber of Industry and Commerce, also said the business leaders would require “sufficient guarantees” of success to launch projects in Tunisia.

Location, workforce are positives

The primary investment sectors in Tunisia are textiles, energy, computer science, corporate services and energy. The largest sources of investment are France, Austria, Canada and the United Kingdom.

An analysis by Santander Bank cited positives about investing in Tunisia, including its strategic location on the Mediterranean, proximity to major European capitals, a well developed social system, qualified workforce, competitive salary levels, and the increasing diversification of it economy. The main negative, Santander said, is a cumbersome Tunisian bureaucracy.

Brahim, the investment minister said Tunisia hopes to attract $1.4 billion in investment this year, an increase of 12 percent from $1.25 billion invested in 2015, with a goal of $2.5 billion by 2020.

That compares with investment of $2.2 billion in 2010, the year before the revolution.

Joblessness sparks unrest, support for IS

Despite Tunisia’s difficulties, foreign investment has been increasing in recent years.

In 2015, investment increased by 21 percent compared to 2014, which saw a 19 percent increase over 2014.

That growth hasn’t translated into enough jobs.

The economic conditions are believed to be driving many Tunisians into the ranks of Islamic State and other militant groups. An estimated 3,000 Tunisians are fighting in militant Islamic groups in Iraq, Syria and Libya.

Aymen Abderrahman, 28, a Tunis-based activist, said that “frustration and total despair” drove the January protests.

The unemployed who are living in the same conditions as before 2011 “are seeing a spark to bring back to life the revolutionary past,” he said.

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