Tunisia

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

Tunisia

Tunisia is transitioning to a democratic political system, and is increasingly attracting our clients. Tunisia will be an economic outperformer in the North Africa region over the coming years, and foreign direct investment will return to the country as political stability improves. The country’s economy is well diversified, with its hugely important agricultural sector, strong manufacturing industries and a well-developed tourism sector.

We ensure our clients make sound investment decisions in Tunisia, using our risk-assessed total analysis model. Our teams keep our clients informed of the latest market moves and political developments as part of our 'top-down' and 'bottom-up' perspective. Our expert views are supported by our interactive data and forecasting. We also provide in-depth analysis on four of Tunisia’s most important industries. Our analysts will make sure you are on top in Tunisia.

Country Risk

Tunisia Country Risk

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Core Views

  • Tunisia's new unity government, which will be formed in August, will benefit from a large parliamentary majority and support from the country's main labour unions. Nonetheless, it will still confront daunting socio-economic and political challenges. Popular pressures and opposition from vested interests will continue to slow the pace of reform, particularly in the run-up to local elections scheduled for the end of the year.

  • All three growth drivers of the Tunisian economy - consumption, investment and exports - will remain mired with problems, including the lingering effects of last year's terrorist attacks on the tourism sector, the unresolved weaknesses of the banking system, and low public investment. We project only a tepid recovery this year, with real growth of 1.7% compared to an estimated 0.7% for 2015.

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Tunisia Operational Risk Coverage (9)

Tunisia Operational Risk

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BMI View: Tunisia's logistics network is adequate and able to meet current demand. The country has relatively strong road connections, an open trade environment and a functional (if inconsistent) utilities supply. However, investors may be tempted to opt for other countries in the region, such as Israel, the UAE or Bahrain, which offer smoother supply chains. The country's overall score of 58.3 out of 100 in the BMI Logistics Risk Index is above the global average; yet Tunisia ranks poorly from a regional perspective at 10th out of 19 states in the Middle East and North Africa (MENA), between Egypt and Kuwait.

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...

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...

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 school...

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...

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...

Tunisia Industry Coverage (7)

Autos

Tunisia Autos

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BMI View: The combination of a slowing domestic economy and increased 'parallel market' sales lead us to retain a cautious stance on the Tunisian new vehicle sales market in 2016. We are targeting just 3.5% growth for the sector, with commercial vehicles set to outperform passenger cars.

Passenger Car and Light Commercial Vehicle Sales
(2013-2019)
e/f = BMI estimate/forecast. Source: National Institute Of Statistics, BMI
...

Food & Drink

Tunisia Food & Drink

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BMI View: Tunisia's consumer outlook will remain affected by concerns over insecurity - undermining consumer confidence - and the weak economic outlook. Nonetheless, the consumer sector will remain a bright spot in the economy, which will drive growth in the food and drink sector. The development of formal retail - driven by rising income and the entry of foreign players - will increase access to packaged food.

Headline Industry Data

  • Total food consumption (local currency) growth in 2015: +10.0%; compound annual growth rate (CAGR) to 2019: +9.8%.

  • Alcoholic drinks value sales (local currency) growth in 2015: +8.3%; CAGR to 2019: +8.4%.

  • Soft drinks volume sales (litres) growth in 2015: +2.4%; CAGR to 2019: +3.0%.

  • MGR value sales...

Insurance

Tunisia Insurance

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BMI View : We see significant potential in North Africa for insurers. However, continued economic constraints will hamper the full development of the sector over the short term, particularly the non-life segment. That being said, strong government impetus in much of the region to augment health insurance density will boost penetration over the medium term. However, we continue to expect life insurance will underperform in comparison to non-life insurance, owing to the disinclination among much of the population to purchase life insurance policies when household budgets are tight....

Tunisia Insurance

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BMI View: Tunisia's insurance market, though on the small side, is experiencing positive growth with premiums rising rapidly from a low base. Rising employment and income rates will support growth in both the life and non-life sectors over the forecast period through to 2020, though we do note that domestic and regional security concerns could deter investors and derail economic growth prospects.

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Headline Insurance Forecasts (Tunisia 2013-2020)
2013 2014e 2015e

Oil & Gas

Tunisia Oil & Gas

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BMI View: Tunisia's investor-friendly government and stable business environment bodes well for foreign investors. However, the country's oil reserves are depleting and recent exploration efforts have only resulted in relatively small discoveries. We believe that a lack of new significant discoveries will continue pushing Tunisia's oil production volumes lower across our forecast period to 2025.

Headline Forecasts (Tunisia 2014-2020)
2014 2015 ...

Telecommunications

Tunisia Telecommunications

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BMI View: BMI has not made any forecast revisions in the latest Q3 2016 report update and we continue to maintain our view that the Moroccan mobile market is in a state of flux, between a mobile segment seeking profitability and a fixed segment looking for higher competition. The rollout of advanced data services and 3G has not resulted in significantly increased profits for operators at present. Furthermore, the recent decline in Q116 suggests that inactive accounts are being shed as the penetration rate begins to rise. On the other hand, the fixed market continues to be dominated by Maroc Telecom, with the lack of progression in unbundling hindering growth, competition and the development of the market.

Robust Growth: 3G Subscribers (000)
2013-2016
...

Tunisia Telecommunications

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BMI View : The North African telecoms sector continues evolving from comprising primarily of voice-centric markets towards markets driven by data consumption. Mobile broadband is increasingly becoming one of the core drivers and offers the greatest future growth opportunities. 3G services have been successfully launched in Algeria and Tunisia, and the 4G services licensing and deployment is now underway in both markets. However, demand for these services still depends on the macroeconomic situation: higher purchasing power helps with the...

Latest Tunisia Articles

  • The formation of a new unity government in Tunisia, expected in August, wil...

  • Tunisia's crucial tourism sector will continue to suffer from elevated dome...

  • An unsettled political and economic environment in the wake of the Brexit v...

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