HomeFeatured NewsRestrictions on competition continue to erode Tunisia's economy

Restrictions on competition continue to erode Tunisia’s economy

While waiting for the Tunisian courts to determine the exact legal status of the irregularities recently reported in the granting of loans by the BNA Bank, which is also a state-owned bank, several analysts believe that they reveal the system of rent-seeking economies that has undermined the Tunisian economy in the past and continues to wreak havoc.

A loan of around 24 million dinars was in fact granted in 2023 to a single individual without any guarantees and without a thorough examination of the file, alongside other huge loans granted to shell companies or to people who have nothing to do with small farmers.

From time to time, on social media, especially FB, commentators, quoting very well informed and introduced sources, draw up lists of public and private Tunisian banks and the groups that control them, while in the last five or six years there has been an increasing number of press articles and analyses by Tunisian and foreign specialists on the transformation of the Tunisian economy into a cash economy marked by “very serious restrictions on fair competition”.

Just a few days ago, the Malcolm H. Kerr Carnegie Middle East Centre wrote in a report that “drawing a line under the negative results recorded by the Tunisian economy over the last decade requires greater confidence in businesses without exception, an effective fight against the cash economy, and support for efforts to create businesses”.

Dubious denial

The authors of the report point out that between 2012 and 2022, private investment in Tunisia fell by 10% of GDP, at a time when “Tunisia, with its broad industrial base, has real development opportunities” that deserve to be strongly supported by its European and Western partners through direct investment.”

A few months ago, in its report entitled “Economic Reforms to Navigate out of the Crisis”, the World Bank warned that “one of the main problems facing the Tunisian economy is the restrictions on competition that produce an environment in which companies cannot achieve growth based on productivity or the quality of services”.

As analysts have noted, in order to compete, you have to be productive and offer quality products, whereas in the absence of competition, anything goes.

However, representatives of Tunisian business leaders and businessmen within certain representative structures, such as the Tunisian Confederation of Industry, Trade and Handicrafts (UTICA) or the Arab Institute of Business Managers (IACE), have not ceased to display a radiant opinion of the functioning of the Tunisian economy, denying absolutely “the restrictions on competition”, through the rent system.

This is an absolutely dubious denial if we refer to the definition of rents given by the Malcolm H. Kerr Carnegie Middle East Centre, namely “the creation, protection and exploitation of privileges, favors or business opportunities sheltered from competition and economic efficiency”.

 The danger of rents compared with corruption or misappropriation of public funds is that they are “legal”, as the Malcolm H. Kerr Carnegie Middle East Centre points out.


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