According to a report published in early 2025 by the United Nations Conference on Trade and Development (UNCTAD) ‘Investment Policy Review of Tunisia’, the rate of investment (public and private) in Tunisia fell to around 16% of GDP during the period 2020-2024, compared with 19.3% in 2016.
Statistical data in the report showed that the average annual foreign direct investment (FDI) inflow fell from 974 million dollars between 2014 and 2018 to 728 million dollars between 2019 and 2023.
This places Tunisia at the bottom of the list of comparable countries, including Egypt, with an average FDI flow exceeding 8.2 billion dollars, and Morocco, with an FDI flow of around 1.7 billion dollars.
UNCTAD attributes this situation to the tightening of access conditions for companies due to the challenging economic climate and the pressure on the domestic market to finance debt.
The report also highlights that Tunisia is experiencing financial imbalances, including budget and trade deficits, rising public debt and the depreciation of the dinar.
This is leading the authorities to control foreign currency inflows and outflows, as well as borrow from the domestic banking system.
The report notes that this ‘crowds out credit to the private sector and slows business investment’, adding that the budget deficit ‘limits public financing of infrastructure projects’.
Consequently, ‘foreign direct investment inflows have stagnated in recent years and private investment remains low in Tunisia’, impacting gross domestic product growth, which remains below potential and leads to a rise in the unemployment rate.
Foreign direct investment (FDI) inhibited by a sprawling bureaucracy
The report also highlights administrative complexity as a problem, as it hinders the attraction of investors. It also notes that only around 10% of the diaspora launch investment projects. ‘There are restrictions on a number of activities which do not always align with the country’s development objectives or the desired type of economic activity.
In addition, the conditions imposed by the foreign exchange code complicate the operations of resident companies, both offshore and onshore.’
UNCTAD has identified 62 bilateral investment treaties (BITs), of which only 39 are currently in force.
The majority of these agreements were concluded in the 1990s and early 2000s. According to the report, reviewing Tunisia’s investment policy and defining solutions to strengthen sources of financing, including local investment and investment from the diaspora, is essential in order to improve the country’s competitiveness, reduce its vulnerability to external shocks, and expand its foreign market.
The report proposes several solutions, including inviting banks to simplify procedures for accessing credit, strengthening and promoting specific mechanisms to support SMEs and startups during their growth phases, and developing mechanisms for women, young people, and people with disabilities.
Other recommendations include setting up innovation budgets and encouraging partnerships between the government, private sector and universities, as well as developing guarantee funds to secure loans, particularly for priority sectors, and encouraging competition between banks to reduce their margins on granted loans.
UNCTAD also proposes the creation of investment funds for priority sectors, to which the diaspora could contribute, as well as the broadening of sources of financing for project structuring by encouraging PPPs.
UNCTAD’s Investment Policy Reviews aim to help countries improve their investment policies to achieve the Sustainable Development Goals (SDGs).
The ‘Investment Policy Review of Tunisia’ report was commissioned by the Ministry of Economy and Planning, the Permanent Mission of Tunisia to the United Nations Office at Geneva, and the specialised agencies in Switzerland.
