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)
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.
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.
On 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.”
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.”
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.
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)
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.
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.
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.
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.
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.
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.
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.
TUNIS (Reuters) – The IMF began talks with Tunisia on Thursday over a new credit programme, tied to measures to strengthen its economy and finances and likely to be worth at least $1.7 billion over four years, a central bank official told Reuters.
Tunisia’s economy has struggled since the 2011 uprising against autocrat Zine El-Abidine Ben Ali that sparked the Arab Spring revolutions across North Africa. Two attacks last year by Islamist militants hurt its tourism industry.
Protests to demand work last month turned violent, underscoring the fragility of the economic growth that Tunisia needs to underpin its democratic transition.
Amine Mati, the head of the IMF delegation in Tunisia, met the Central Bank Governor Chedli Ayari to discuss the details of the credit programme on Thursday.
“The programme will be in accordance with new economic reforms in Tunisia this year and during the three next years,” an central bank official told Reuters after the meeting.
Mati will also meet the prime minister’s adviser in charge of economic reforms.
Tunisia is about to get a loan of 500 million euros ($550 million) from the European Union to support the economy, and former colonial ruler France last month pledged 1 billion euros in aid over five years.
The new IMF programme will follow on from a two-year deal totalling about $1.74 billion that was agreed in 2013 and extended last year by seven months to buy time for Tunisia to put banking and fiscal reforms in place.
Under the programme, Tunisia also agreed to keep its budget deficit under control and make the foreign exchange market more flexible.
(Reporting by Tarek Amara; Editing by Ruth Pitchford)
TUNIS (Reuters) – The European Union said on Friday it was ready to lend Tunisia 500 million euros in 2016-2017 to cope with its economic difficulties, weeks after violent protests erupted in the North Africa country to demand jobs.
Tunisia has been hailed as the success story of the 2011 Arab Spring revolts for its transition to democracy, but economic development and reforms have failed to keep pace with the political changes since the fall of autocrat Zine El-Abidine Ben Ali.
(Reporting by Tarek Amara; editing by Patrick Markey and Kevin Liffey)
At a time when many would have shied away from such a hard-hit economic sector, Salma Elloumi Rekik, business woman and politician, boldly stepped into the role of Tunisia’s Minister of Tourism.
Little over a month after taking the reins from her predecessor Amel Karboul, on February 6th, 2015, the already fragile economy was knocked by Bardo terrorist attacks and again in the July Sousse beach massacre. Tourism has increasingly become the nation’s linchpin, generating 15 percent of the country’s GDP last year. It has been down to Rekik to provide solutions to get the vital tourism trade back on track.
On June 29th, 2015, Salma Elloumi announced the many government measures that were to be put in place to essentially give those in tourism a financial lift. Among them: loan repayments were postponed for the years 2015 and 2016, VAT reduced from 12 percent to 8 percent and overdue fines cancelled.
“The ministry has focused its actions on the change in the promotional policy, especially after the attacks of Bardo and Sousse,” said the Minister.
In an endeavor to broaden Tunisia’s appeal to holiday makers from African countries, Iran, China and Russia, Rekik worked hard to have security in the country strengthened and to increase air traffic, devoting a budget of 12.5 million of Tunisian dinars (over 6 million US dollars) for this purpose.
Born in Tunis on June 5th, 1956, Rekik was influenced and immersed in business from an early age. Growing up surrounded by her family’s wiring company; she continued her education after leaving Omran High School at the Institute of Management in Tunis (ISG) until the age of 22. As well as possessing a business mind, the young Rekik became multi-lingual, speaking and reading in Arabic, French and English.
On leaving university she began working for the family business which her father, Taoufik Elloumi, created in 1985. Societé Cofat Med -SCM specializes in the design and manufacture of electrical wiring for motor vehicles and utilities and is still going strong.
“SCM started with less than 20 employees; now it is one of the most popular companies in Tunisia,” the 59 year old said of her father’s enterprise.
In the early 1990’s, Rekik expanded her professional outlook after the former president Zine el-Abidine Ben Ali launched a campaign to modernize agriculture. Taking this as a cue, she branched out into a new sector, industrial agriculture.
She began with Stifen, the food processing company her father founded in 1994. In time she was made CEO and the prosperous company became part of the expanding Elloumi group. Her appetite for responsibility led her to become the CEO of SCM and she went on to drive both companies to great success. Stifen now exports globally and lists Kellogg’s, Danone and Nestle amongst its clients.
The mother of three, not content with just one profession, she embarked on her political career after the 2011 Jasmine revolution in Tunisia. Spurred into action by the changes her country was experiencing, she co-founded the secularist political party Nidaa Tounes and became a member in the party’s executive bureau.
“Engaging in politics is a duty as a citizen,” she said, and she paid her duty well, following her party to victory against the Islamist Ennahda party in the October 26th, 2014 elections, only the second truly legitimate election to be held in Tunisia since 2011.
Their time in power was not smooth, including a coalition government with their Islamist rivals in February 2015. Further difficulties beset the party when Rekik, along with 30 other Nidaa Tounes deputies, resigned Sunday, November 8th, 2015. The mass resignation came in response to members becoming increasingly fractious about the conduct and intentions of some of the party’s fellows.
For now, Rekik has a big enough task ahead in her work as Tourist Minister. Without doubt she has proven herself many times over in her varied chosen fields of work, and has shown and continues to display strong and prudent leadership skills, which have been sought after globally.
Versatile, intelligent and brave, Rekik’s work has been publically recognized and gained her two commendations by the Tunisian Republic for her service to the nation. She still found time to participate throughout her career in leadership, management, and crisis management training programs in the United States and Europe.
Her work as Minister of Tourism seeks to bring hope to the Tunisian people and highlight the rich array of positives her nation has to offer the rest of the world. Speaking on December 2nd, 2015, she announced the upcoming release of a film about the 2015 Nobel Peace Prize, which was awarded to the Tunisian National Dialogue Quartet, an encouraging sign and a pivotal moment for Salma Elloumi Rekik’s beloved country.
TUNIS (Reuters) – Inflation rose to 4.6 percent in October after remaining steady for the past three months at 4.2 percent, official figures showed on Thursday.
The food and drink price index rose 5.6 percent in October from a year earlier, the state statistics institute said.
Tunisia’s central bank said last week it had cut its main interest rate to 4.25 percent from 4.75 percent to boost economic growth, as inflation rates fell.
Inflation dropped to 4.4 percent in the first 10 months of this year, compared with 5.5 percent last year.
The bank does not target a particular inflation rate but says the highest that should be tolerated is 5 percent.
(Reporting by Tarek Amara; Editing by Tom Heneghan, Reuters)
TUNIS (Reuters) – Tunisia’s economic growth is seen at 2.5 percent for next year versus an expected growth of 0.5 percent in 2015 when two militant attacks have damaged its tourism industry, Finance Minister Slim Chaker said on Friday.
Chaker told reporters the country’s deficit was expected to narrow to 3.9 percent next year compared with an estimated 4.4 percent of gross domestic product this year.
TUNIS (Reuters) – The World Bank has approved a $500 million loan for Tunisia to help finance economic reforms and face the consequences of two big militant attacks targeting its tourism industry.
The bank said on Friday the operation would aid restructuring of state banks and administration as a way to help economic growth.
The North African state has mostly completed its democratic transition since the 2011 uprising that ousted Zine El Abidine Ben Ali. But international lenders want to see more economic reforms to help reduce the deficit and high public spending.
