A few months after the outbreak of the Russo-Ukrainian conflict, the Tunisians, pacifists and fundamentally opposed to wars, had nevertheless expected to benefit from the global movement of industrial relocations that everyone agreed would take place in its wake, particularly in the textile-clothing and automotive components sectors.
In May 2022, senior officials from the Ministry of Industry even told the TAP news agency that “we have identified existing sites and industrial buildings to directly accommodate relocated companies”, adding that “in the automotive components sector, 2 relocation requests have been administratively completed, while 5 others are being examined”.
Without being meagre, however, foreign direct investment in Tunisia in 2022 fell short of these highly optimistic forecasts.
In line with a recent UNCTAD report, foreign direct investment (FDI) in Tunisia will have reached 713 million dollars (around 2,200.67 million dinars) in 2022, compared to 660 million dollars (around 2,037.09 million dinars) in 2021, an increase of 8%, Director General of the Agency for the Promotion of Industry and Innovation, Omar Bouzaouda, told a local radio station on July 12, 2023.
In 2019, before the COVID-19 pandemic, FDI in Tunisia had reached 845 million dollars (around 2,608.09 million dinars).
In fact, with a few exceptions, this “lack of interest” has affected the whole of Africa.
According to the UNCTAD report, foreign direct investment (FDI) flows to Africa have fallen to $45 billion in 2022, compared to $80 billion in 2021. This represents only 3.5% of global FDI.
As one analyst noted, this modest record contrasts sharply with the political concern and interest in Africa at the highest levels of the major powers.
With $15 billion, North Africa attracted the most FDI flows to the continent in 2022, a 58% increase on 2021. However, Egypt took the lion’s share with $11 billion.
Comparative advantages
A number of experts, while advocating FDI, have mentioned other more fruitful and safer formulas, including the co-development formula, once a slogan and watchword for bilateral and multilateral partnership with Europe and the industrialized West in general.
Tunisia, in particular, has what it takes to make such formulas a success.
Tunisia’s European partners frankly recognize its many comparative advantages in this field.
The Association Agreement signed in 1995 between Tunisia and the European Union was inspired by the idea of Co-development, which the French partners have revived through the Tunisian-French Industrial Co-development Forum.
The second edition of this Tunisian-French Industrial Co-Development Forum was held on June 13, 2023, in Tunis, with the participation of 150 Tunisian industrialists and a dozen French companies.
As a connoisseur and without the slightest complacency, Michel Bauza, Director of Business France at the French Embassy in Tunis, which organized the event, was full of praise for Tunisian industry and Tunisian industrialists.
Tunisian industry, which accounts for around a quarter of GDP, is now highly developed and has been strongly oriented towards Europe for many years in a process of near-sharing,” he said.
In France, industry represents only around 10% of GDP, compared with 23% of GDP in Tunisia.
Today,” added Michel Bauza, “this near-sharing is growing stronger with the increase in demand in Europe for a local partner, so Tunisian manufacturers are in a position to meet this challenge, hence the need to continue upgrading the skills of Tunisian industry”.
For his part, Omar Bouzouada, Director General of the Agency for the Promotion of Industry and Innovation (APII), pointed out that French companies’ investment intentions in the first five months of 2023 have almost doubled compared to the same period in 2022, adding that this increase testifies to confidence in Tunisia’s business climate and the good health of its industrial sector.
The country remains attractive, in particular with the reforms undertaken in investment governance and the business climate, in addition to the new wave of measures to be adopted, he added.
