Recent activity in a variety of sectors across Tunisia suggests the country is making good progress towards consolidating its economic growth, seven years after the revolution and two years after the country’s deadliest terrorist attack, according to Oxford Business Group’s (OBG) inaugural ‘OBG Business Barometer’, which surveyed more than 100 CEOs in Tunisia.

The Islamic State attack in mid-2015 heavily damaged Tunisia’s international image and the tourism sector on which its economy strongly relied. However, the report found tourist numbers have grown by more than 20% in the past year, not least due to the end of the UK’s travel ban in mid-2017.


Visitors from Tunisia’s traditional source markets have returned, alongside a new wave of arrivals from China – whose citizens no longer require a visa – and Russia, says the OBG report. Significantly, in December 2017 luxury hotel chain Ritz-Carlton, a subsidiary of US-based Marriott International, announced plans to invest $129.8m in a new hotel in Tunisia, according to greenfield investment monitor fDi Markets.

The agriculture sector is another key driver of the economy and the Tunisian government aims to boost olive oil production, the report says. The key export crop is in the midst of a promising season, with output expected to grow by 160%.

Tunisia is also aiming to become a regional technological leader within its industrial sector. The November 2017 Tunisia Investment Forum showcased the progress being made in implementing new technologies in automotives, mechatronics, agri-business and pharmaceuticals.

Most importantly, the OBG report reported that CEOs in Tunisia were relatively optimistic, with 77% having either positive or very positive expectations of local business conditions in the next 12 months. Roughly half of them forecast 2-3% gross domestic product (GDP) growth over the same period. Although muted, Tunisia’s GDP growth has witnessed gains, growing from 1% between 2015-16 to 2.3% in 2017, according to International Monetary Fund estimates.

FDI regrowth  

FDI into Tunisia is also increasing, more specifically, by 12.8% in 2017 in terms of capital, according to the country’s Foreign Investment Promotion Agency (FIPA). Tunisia’s manufacturing sector provided the lion’s share of foreign investments at 46%.

“The good performance of the industrial sector is essentially attributable to the performance of certain sectors such as electronics industries, electrical fibres and more specifically the automotive and aerospace components,” says Hatem Soussi, FIPA director of supervision and monitoring of foreign companies.

Tunisia’s inbound greenfield FDI also expanded in 2017, garnering $732m of investment and, therefore, increasing by 250% since 2016 and 190% compared to 2015, according to fDi Markets. Most of 2017’s greenfield FDI went into renewable energy after Belgium-based WindVision began construction on four wind farms and China’s Sinoma Energy Conservation, which specialises in waste heat power generation, opened a new branch.

Tunisia’s greenfield FDI took a significant hit after the 2015 terrorist attacks, but investor confidence is clearly improving and returning to its 2011-14 yearly average of $1.08bn.

Political factors

Nonetheless, increased instability in neighbouring countries is a continuing concern for the Tunisian economy in the short to medium term, according to most of the Tunisian CEOs interviewed by OBG. Sustained stability in Libya, one of Tunisia’s main trading partners, would ultimately translate into numerous economic benefits for Tunisia. Meanwhile, difficulties experienced by other nations in the Middle East and North Africa, such as Egypt and Turkey, could benefit Tunisia in terms of tourism.

As much as 70% of OBG’s respondents deemed the Tunisian government’s Strategic Development Plan 2016-20 as inadequate to reinvigorate the economy, having yet to see the launch of any projects from the plan, says the report. The CEOs also said the country is most in need of leadership, and research and development skills, to make further progress.