Interview: Samir Majou
What efforts are necessary to stimulate growth for private enterprises in the country?
MAJOUL: Tunisia needs to turn its focus to support private sector enterprises instead of public ones. Currently, the large public sector is a burden on the finances of the country. The government has at least one company in every sector of the economy, and many of these are unprofitable. They cost significant sums of money to operate. Furthermore, when public companies make a profit, the money goes towards the budget instead of being directly invested in the country. Meanwhile, we have a private sector that has assumed its role of creating wealth. Restructuring state-owned companies, operating them efficiently and introducing private sector competition should be the top priority.
Furthermore, improving the competitiveness of industrial firms is essential to economic development. Tunisia has a range of industrial segments, from agro-industry to textiles and automotive. These are export-oriented for the most part, so the exports process needs to be streamlined to bolster their growth and economic contribution. Logistics and transport should be updated and expedited to avoid difficulties at the port.
Beyond efficiency, port costs are incredibly high and need to be lowered to increase the international competitiveness of industrial firms. Additionally, many have the potential to expand their operations to new markets and internationalise. The local economy is small, and firms could look to expand their business into African markets. However, to become competitive on a regional or global scale, the central bank must facilitate taking money out of the country. Such an international focus would increase profits in the long term.
What is necessary to improve investment?
MAJOUL: Our main goal is for Tunisia to become a paradise for investors. Investment and increased financial resources for the country result in economic growth and increased job creation. It also boosts competitiveness among companies throughout the economy. Since Tunisia does not have the natural resources of neighbouring Algeria and Libya, it has historically diversified its economy and built up capacities in tourism, industry and agriculture, to name a few.
Although there are opportunities for investment in various sectors, legislation needs to be attractive to foreign investors as well. The new investment code was an important step in the right direction: since Tunisia was in the midst of a delicate post-revolutionary period, we had to reassure existing investors and encourage new investors to come to the country. Beyond the code, Tunisia needs to simplify administrative processes to have an environment that is favourable to investment. The current bureaucracy prevents economic development. The digitalisation of processes will alleviate administrative inconveniences and increase transparency. Lastly, taxation needs to be further revised to be more attractive to investors.
How can entrepreneurship be encouraged and what are the main challenges in this regard?
MAJOUL: As a result of the significant investment in education over the 20th century, Tunisia has built up its human resources to a highly qualified workforce. However, the culture is to look for a job instead of starting a new business. A shift in mentality should start at the education level, if not earlier. Tunisia should devise programmes to prepare our citizens, especially youth, to become entrepreneurs. There must also be an environment conducive to company creation, from financing to support and guidance. It is difficult to obtain bank credit for start-ups, and when they do obtain financing, there is a lack of structures to help these businesses grow. Therefore, the government should encourage the creation of institutions that have experts on start-ups who can advise entrepreneurs on their business plans and scaling up. Encouraging entrepreneurship will help alleviate unemployment, particularly among the youth.
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