In his office decorated with vintage posters of Tunisia and a giant map of Africa, Ombeline Bernard Manusset Allant, vice-president of the Africa branch at the French company Vocalcom, is confident. “We must succeed in further highlighting Tunisia as a destination for investment. The country has many cards to play, whether with the relaunch of the Libyan market or as a strategic hub for trade with the rest of the continent ”, she assures.
The visit carried out on June 2 and 3, in Tunis, by Jean Castex aimed precisely to show Paris’s support for a struggling Tunisian economy in a fragmented local political context. The French Prime Minister, who took part in the third edition (after those of 2017 and 2019) of the Franco-Tunisian “High Council for Cooperation” (HCC), pledged to “Support the reforms initiated by the Tunisian authorities which aim to increase its attractiveness and improve the business climate. “
Established for fourteen years in Tunisia, Vocalcom, which has around forty employees, specializes in digital solutions for business customer services. From Tunis, Ombeline Bernard Manusset Allant also manages the other Vocalcom offices located in Africa. The company, already familiar with digital and teleworking, has suffered less than others from restrictions linked to the Covid-19 pandemic. But, admits the manager, the entire private sector in Tunisia “Had to be resilient” in the face of a continuing deterioration in the country’s political and economic situation.
Start-ups and relocations
While Tunisia is waiting for economic support from the French side and is negotiating bitterly with the International Monetary Fund (IMF) for a new loan, the private sector “Continues to function despite everything”, according to Badreddine Ouali, CEO of Vermeg, a Tunisian company specializing in software solutions. Many business leaders like him plead in favor of a revival based on the country’s strengths: its digital skills and its geographical position, strategic for the relocation of French companies in the pharmaceutical, medical, textile or even automobile.
The Covid-19 pandemic has indeed redefined production chains and Europe is reviewing its dependence on certain suppliers – such as China – who have shown their limits in times of crisis. “Thanks to its proximity to France, Tunisia can really be the right place for the relocation of certain French companies, underlines a French diplomatic source. For example, we have had clients from certain textile companies who come back after leaving Tunisia six years ago. “ Tunisia is home to 1,500 French companies, employing nearly 150,000 people. Although French direct investments have fallen with the health crisis, they represent nearly 30% of foreign direct investments.
Another important focus of the visit of the French ministerial delegation: digital. Tunisians rely on this sector, which offers a pool of engineers available in Tunisia when they are not attracted abroad. Nearly 23,000 graduate each year, but with skills that are not always adapted to market demands. Nearly 10,000 engineers have left the country since 2011 for more attractive salaries in Europe. Business leaders like Badreddine Ouali plead for better bilateral cooperation between the two countries in order to exploit these “Digital talents” in Tunisia itself.
The start-up ecosystem that has developed in the country over the past five years also makes it possible to promote innovation. “And many initiatives by young people that we did not see before”, insists Walid Rouis, managing director of two Tunisian subsidiaries of the French group Actia, specializing in electronics serving the management of systems in the automotive, telecommunications and energy fields. “Today, we ourselves integrate entrepreneurs who are at the concept stage in our business incubation, to allow them to go as far as developing their prototypes while benefiting from the expertise and feedback from ‘business experience’, adds Walid Rouis.
The adoption by Parliament in 2018 of the Start-up Act, a law allowing a relaxation of administrative procedures for start-ups and granting them financial advantages, was a first step towards this new ecosystem. “There is really something to attract investments and French subsidiaries, especially in terms of cyber security and artificial intelligence where Tunisian engineers are very innovative”, adds the French diplomatic source.
The question of debt
This repositioning of Tunisia remains however dependent on certain legislative and economic reforms which are slow to be adopted since the revolution of 2010-2011. “The tax pressure on companies often changes with the different finance laws”, regret Hichem Elloumi, vice-president of UTICA, the Tunisian employers’ union, who met with representatives of the French Medef on Thursday. “ Bureaucracy also remains a brake “, adds Mr. Elloumi, who also deplores “The congestion of the port of Radès, a weak point for export logistics”.
These handicaps complicate a macroeconomic picture marked by a drift in financial indicators. With a public debt that has reached 102% of GDP, Tunisia is discussing with the IMF the terms of a new loan of 4 billion dollars (3.3 billion euros) when it must start repaying debts of nearly $ 1 billion as of this summer. The head of government, Hichem Mechichi, has increased the number of trips between Libya and Qatar in recent days to obtain promises of immediate financial support. Tunisians expect around 800,000 euros from Libya and 1.6 billion euros from the Qatari side.
“ The country is really under pressure, because even if he manages to negotiate an IMF loan, the funds would not arrive in time to repay the summer maturities ”, explains Elyes Jouini, professor of economics at Paris Dauphine-PSL University. Mr. Jouini believes that the visit of Jean Castex can help, insofar as Tunisia needs credible support, like France, to support it in its negotiations with the IMF. “But that may not be enough, because the IMF is waiting for a real timetable with reform commitments and not just declarations of intention”, he adds.
For some economic operators, including Aziz Mebarek, co-founder of AfricInvest, an investment fund, the challenge of financing the budget (whose essential components are the wage bill, debt service and compensation) “Significantly reduces the room for maneuver relating to the investment budget”. “The possibilities of rebounding the Tunisian economy are thus reduced”, he notes. Mr. Mebarek especially expects support from Tunisia’s partners, especially Europe and France, to support donors“Option of a restructuring of the external debt in order to better smooth the repayment terms of the years to come and without calling into question the solvency of Tunisia”.
Mr. Castex’s visit should have more than symbolic significance for the Tunisian economy. “The two countries have never needed each other so much, with this period of Covid-19, but it remains to be seen whether Tunisia will seize this opportunity”, Badreddine Ouali believes. The businessman laments ” improvisation “ and the “Lack of preparation” on the side of the Tunisian state during this kind of visit, “Where we do not necessarily distinguish clear proposals”.