The synthetic Business Climate Perception Indicator (IPCA) has reached, for the first time, a level below the threshold of 50 (48.6), in 2020, which is synonymous with “less satisfaction with the business climate,” according to the 21st annual survey on the business climate and competitiveness of companies, conducted by the Tunisian Institute of Competitiveness and Quantitative Studies (ITCEQ).
This indicator was 59.5 in 2019, knowing that the closer the IPCA is to 100, the more favorable the business climate is considered.
The main constraints impacting the business climate are the political climate, corruption, the social climate, bank financing, market practices and the macroeconomic and legal framework.
This survey, which covers the first half of 2021, was conducted on a sample of 1,726 companies for the business climate, and 1,350 companies for competitive strategies.
The indicator of the political climate, whose level showed the greatest decline to 30.1, was the main cause of the deterioration of the perception of the business climate in 2020. Thus, 70% of companies consider the political climate to be a major constraint and its instability is a reason why almost one third of companies have not invested in 2020.
Other areas such as corruption, social climate, market practices, administrative procedures and bank financing also contributed to this decline, with levels ranging from 52.3 to 34.1.
With regard to corruption, 69% of companies perceive corruption as a major constraint and only 6% find that the phenomenon of corruption has diminished in 2020, compared to 2019. There are several reasons for the rise of this phenomenon, some of which are the responsibility of businesses and others are the responsibility of the public administration.
For the companies surveyed, the digitalization of administrative services is the main way to fight corruption.
On the coronavirus pandemic, the majority of companies declare that they have been negatively impacted by COVID-19. Thus, most of their activity indicators have decreased in terms of production/activity (-70%) and turnover (-72%), as well as in terms of exports (-71%) and market share (-61%).
The health crisis has also negatively impacted investment. Therefore, more than 80% of companies have not made any investment in 2020 and nearly one third of which explain it by the COVID-19. More than two thirds of companies report having to suspend their activity in 2020 for reasons directly (mandatory containment) or indirectly related to COVID-19.
Only 30% report having benefited from COVID-19 support measures. These measures are mainly financial support (COVID-19 credit) and social measures (compensation for employees and deferral of CNSS contributions).
For those who have not benefited, 30% pointed to the complexity of the procedures, a quarter did not need them and 18% had their applications rejected.
Regarding companies’ resilience to the pandemic, there are companies that have resorted to the reorganization of work by opting for reduced hours (29%), shift work (21%) and, for the first time, for teleworking (14%).
In this context marked by the pandemic, more than half of the companies have encountered supply problems. To deal with these risks, 57% recommended diversifying supply sources. Other more costly strategies (overstocking) are recommended by 37% of companies.
On the issue of strengthening their competitive position and among several proposed actions, those that are deemed priority by companies are employee training followed by innovation and digital transformation.
For exporters, more than half (52%) think that the prospecting of new markets would be the strategy to adopt to promote their exports.
After the gloomy results of 2020 compared to 2019, business leaders show a clear optimism about the future evolution of their activity indicators in 2021.
The lack of visibility that has marked the future expectations of business leaders revealed in recent years’ surveys has improved according to the results of the 2020 survey. Today, so many companies have experienced extreme situations (pandemic, flooding for some, cyberattack for others) that they can see more clearly and anticipate increases, decreases and stagnation.
The same is true for employment and investment expectations, where the uncertainty that marked the last few surveys has turned into a certain optimism, particularly in the medium and long term.
