Tunisia
In-depth country-focused analysis on Tunisia's economic, political and operational risk environment, complemented by detailed sector insight

Our comprehensive assessment of Tunisia's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Tunisia, as well as the latest industry developments that could impact Tunisia's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Tunisia before your competitors.

Country Risk

Tunisia Country Risk

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Core Views

  • The National Constituent Assembly (NCA) - the country's legislature - adopted a new constitution in January 2014, the first since the ousting of former President Zine el-Abidine Ben Ali in January 2011. We are optimistic over the country's political trajectory even as threats to the political transition, particularly those posed from the presence of jihadist groups in the country, remain significant.

  • We see slow growth in Tunisia in 2014. Ongoing political instability is likely to limit direct investment and tourist arrivals. Growth will accelerate from 2015 onward, and an improvement in political stability will result in a return of FDI from H215.

Major Forecast Changes

  • We have revised downward our 2014 forecast for Tunisian real GDP growth to 2.3%, from 2.8% previously...

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Tunisia Operational Risk Coverage (9)

Tunisia Operational Risk

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Tunisia operates a relatively open economic environment and welcomes foreign investment in almost all sectors. Investors stand to benefit from the country's openness to trade and investment in terms of Foreign Direct Investment (FDI), access to financial markets and low levels of red tape. The principal drag on Tunisia's score is its fiscal and trade barriers. The country has low levels of government expenditure as a percentage of GDP and high levels of trade bureaucracy, such as tariff and non-tariff barriers. As a result, Tunisia scores well in our Trade and Investment Risk Index with a score of 54.9 out 100, which places the country seventh out of 18 states in the Middle East and North Africa (MENA) region, between Jordan and Saudi Arabia.

Tunisia welcomes FDI in almost all sectors of its economy, offers tax incentives to foreign investors, and operates a number of free trade zones, the largest of which is the Bizerte Harbor Free Trade...

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Tunisia Crime & Security

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Tunisia is generally a safe place for foreign business travellers, expatriate workers and tourists. However, the most significant security risk facing business operations is terrorism. The 2011 revolution has destabilised the country somewhat, resulting in politically and ideologically motivated attacks by some terrorist groups. While these are often not targeted at foreigners, there are some organisations that reject any form of Western influence and may be motivated to target areas popular with foreigners. Overall, Tunisia scores 40.9 out of 100 in the BMI Criminal and Security Risk Index, placing 10 th out of 18 states in the MENA region, between Israel and Morocco.

The country is taking significant steps to improve its counter-terrorism capability. This has included establishing a counter-terrorism agency that aims to monitor telecommunication and internet activity of suspected terrorists. The Tunisian...

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Tunisia Labour Market

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Overall, Tunisia places in the middle of the regional pack with regards to Labour Market risks in the Middle East and North Africa (MENA) region, despite low labour market participation, complex visa regulations and elevated labour tax posing the greatest risk to investors. While Tunisia scores favourably in terms of education, its literacy rate is still one of the lowest in the region, with high dropout rates preventing a number of Tunisians from gaining basic skills, such as numeracy. Overall, we give Tunisia a Labour Market Risk rating of 47 out of 100, placing it in 10th place out of 18 countries in the region.  

Relative to the region, Tunisia is hampered by a scarcity of labour.. This is due to a high rural population and low female participation in the workforce that drives down the size of the labour pool and limits the skills of those available. Furthermore, although Tunisia boasts second highest primary...

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Tunisia Logistics

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Tunisia's logistics network is adequate and able to meet current demand. The country has relatively strong road connections, an open trade environment, and functional (if inconsistent) utilities supply. However, investors may be tempted to opt for other countries in the region, such as Israel, UAE or Bahrain, which offer smoother supply chains. The country's overall score of 53.5 out of 100 in the BMI Logistics Risk Index is above the global average, yet ranks poorly from a regional perspective at 11th out of 18 states, between Kuwait and Lebanon.

Tunisia is overly-reliant on thermal energy sources such as oil and gas. This problem is compounded by Tunisia's dwindling supply of its own fuel resources and need to import, which is driving up the cost of electricity and fuel. While investment in renewable energy sources should help to drive down energy costs in the long term (beyond 2018), investors for the moment face...

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Tunisia Trade & Investment

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Tunisia operates a relatively open economic environment and welcomes foreign investment in almost all sectors. Investors stand to benefit from the country's openness to trade and investment in terms of Foreign Direct Investment (FDI), access to financial markets and low levels of red tape. The principal drag on Tunisia's score is its fiscal and trade barriers. The country has low levels of government expenditure as a percentage of GDP and high levels of trade bureaucracy, such as tariff and non-tariff barriers. As a result, Tunisia scores well in our Trade and Investment Risk Index with a score of 54.9 out 100, which places the country seventh out of 18 states in the Middle East and North Africa (MENA) region, between Jordan and Saudi Arabia.

Tunisia welcomes FDI in almost all sectors of its economy, offers tax incentives to foreign investors, and operates a number of free trade zones, the largest of which is the Bizerte Harbor Free Trade...

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Tunisia Industry Coverage (4)

Autos

Tunisia Autos

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No official H114 sales data had been released by the Tunisian authorities as this report was being compiled in late August 2014. To date, an April 2014 report on the African Manager website suggested that new vehicle sales in Tunisia totalled 9,909 units over Q114. More recently, leading local dealership Ennakl stated that it had sold 1,087 units during the month of May 2014, which it said represented 19% of the market. Using this as a base, we estimate that some 5,720 vehicles were sold in Tunisia over the month of May. Adding this figure to the 9,909 units sold over Q114 provides a total of 15,629 vehicles sold over the January-March and May period.

On current trends, this would therefore suggest some growing downside risks to BMI's current forecast of a 4.6% increase in new vehicle sales for the full year. Certainly, there is every indication that a downward revision to our forecasts may...

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Food & Drink

Tunisia Food & Drink

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BMI View:  We reaffirm our optimistic view on Tunisia's political transition, and expect a combination of renewed business and consumer confidence and low base effects will lead to growth of 3.9% in 2015. Assuming political stability ensues, we forecast Tunisian food consumption growth to accelerate from 4.7% in 2014 to 6.9% in 2016 and 2017.

Despite the signing of a new constitution in February 2014 , a high level of  p olitica l uncertainty continues to impact investment by both domestic and foreign companies. Assuming political stability ensues, we forecast Tunisian food consumption growth to...

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Insurance

Tunisia Insurance

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BMI View :   We believe life insurance penetration in the North African region will remain low due to the lack of affordability among households . Furthermore, we see an increasingly likelihood of consolidation among the regional markets in the coming years due to the large number of sub-scale insurers which lack capital. We also see an opportunity for the larger insurers to expand beyond their domestic shores into other African markets. 

Life penetration in all the four countries profiled in this report - Algeria, Morocco, Tunisia and Libya - is low and we expect it to remain so over the coming years due to the low levels of income of many households. However, Morocco is the only country where life insurance has become somewhat established as a conduit for organised savings. Even then, it is used by...

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Telecommunications

Tunisia Telecommunications

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BMI View : The strong demand for mobile data services in the North Africa n telecoms markets is driving investments in network upgrade and expansion, with operators in Algeria, albeit from a low base, and Morocco leading the way in capital expenditure ( capex ) spending in 2014. The uptake of 3G network services in this region, aided by the increasing availability of low-cost smartphones, will allow mobile operators diversify their revenue streams away from basic services amid increased regulatory and competitive pressure. Libya is still left out of this development trend, with insecurity and political stability delaying a much - needed liberalisation process in the telecoms sector and...

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