Tunisia's ICT sector strengthens offerings and status as an outsourcing centre

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Cultural and geographic proximity to European markets and a qualified workforce have helped Tunisia secure its position as a preferred location for competitive IT services. As a result, the country has developed a solid offshoring cluster, which has helped create employment opportunities. Extending this performance into other segments of the sector, however, has been one the industry’s main challenges. Although the speed of development has been limited by instabilities faced by the country in recent years, government initiatives and increased commitments by institutional and private stakeholders are opening the door for sector expansion.

Sector Benefits

The IT and communications sector accounts for between 7% and 10% of Tunisia’s GDP. In particular, the sector represents an annual turnover of roughly TD6bn (€2.3bn), according to local media. A critical element has been strong growth in terms of ICT usage. Tunisia’s mobile phone penetration rate was 126% as of November 2017 (see Telecoms overview) and between 2010 and 2016 the number of internet connections has increased exponentially, from just over 600,000 to 7.8m. Equally important is the rise of internet connections through mobile phones, which expanded from 1.5m to 7.5m between 2012 and December 2017, according to the National Telecommunications Agency (Instance Nationale des Télécommunications, INT).

Internet accessibility has also played a significant role, according to a report prepared by BDRC Continental, a research consultancy in the UK, and published by the international press. As of October 2017 Tunisia laid claim to the second-cheapest broadband internet access in Africa, at an average $19.69 per month.

The sector is also set to benefit from recent international support. In November 2017 the authorities secured a €71.56m loan from the African Development Bank, with the funds earmarked for the modernisation of the IT sector and to support continued implementation efforts of the Tunisie Digitale 2020 programme.


While the proliferation of internet connections and access to cheaper hardware equipment has been pushing usage habits upwards, establishing the right regulatory incentives for IT entrepreneurs to establish new companies has proven to be more challenging. However, there are encouraging signs as the start-up environment develops.

Esprit, a private higher-education institution, runs an incubator programme to support tech entrepreneurs, with a focus on the transportation and health sectors. In 2017 leading regional incubator Flat6labs opened an office in the country. One of the Tunisia’s biggest banking institutions, Banque Biat, established its own incubator, BiatLabs, to support start-ups, which is notable as access to financing and the administrative difficulties related to establishing new firms continue to be key obstacles for the expansion of IT entrepreneurship. However, these IT start-ups are leading the way in dealing with challenges in key sectors. iFarming, a Tunisian start-up, created Phyt’Eau, a smartphone application that allows farmers to oversee irrigation of their crops remotely, reducing water expenditure and improving crop yields. Datavora, another local start-up, secured TD1m (€384,000) in seed funding, and uses data collection and analyses to compare prices and marketing of products on e-commerce platforms across the world in real time.

To facilitate this kind of entrepreneurship, sector stakeholders are pushing for a set of regulatory incentives to be put in place. The Start-up Act, a proposed set of laws, aims to ease administrative procedures, easing access to finance in a bid to transform the country into a regional start-up centre. Approved by the Council of Ministers in December 2017, it is expected to be presented to the Parliament during 2018.

Offshoring Services

Proximity to European markets, a modern telecommunications infrastructure and a competent pool of human resources’ have helped Tunisia to become a burgeoning IT outsourcing destination. The segment has the ability to provide competitive IT services for French-speaking customers and the Italian market. In 2015 there were over 220 call centres with a total workforce of 17,500, while the IT outsourcing sector accounted for 34,000 jobs in over 300 companies, according to 2017 figures provided by the government. “After 2011 a lot of offshoring operators went through a period of doubt. They stopped investment, but realising that it was a shame not to take advantage of the Tunisia location, they re-started their investments here, because of our excellent price-to-quality relationship,” Imed Ayadi, CEO of local IT firm Addixo, told OBG. “Although politically it is complicated here, people have learned to live with the situation,” he added. However, Tunisia’s IT offshoring sector has been affected by growing regional competition. Morocco has proved to be a fierce competitor, both in attracting business to its domestic outsourcing centres, and in the expansion of its providers across sub-Saharan Africa, where they have been able to cut costs while servicing French-speaking markets. Despite this competition, it is thought that the IT segment can provide more employment. “The offshoring sector could employ up to 100,000 people, but we are still developing our strategy. Additional regional development could come from the IT services expansion, with Tunis, Sousse and Sfax becoming key areas for IT offshoring development and attracting human resources from surrounding regions,” Ayadi added. Maintaining a qualified workforce is a priority. According to the Ministry of Technology, Communication and the Digital Economy, Tunisia has 50,000 trained professionals, with 13,000 coming out of university annually. To feed the sector’s expansion, the government programme, Smart Tunisia, was established in 2014 with an allocation of €500m to create 50,000 new jobs over a five-year period.


Moving public administration services to digital platforms is also a key priority. Implementing measures to digitalise Tunisia’s administration, – thereby improving information sharing and speed ing up procedures – is viewed as the best way to improve taxation practices, with estimates that such a digital administration could add as much as TD62bn (€23.8bn) in revenue collection over a period of 10 to 15 years.


In the past, the IT sector’s potential to foster employment and ease regional integration across the country has been overlooked. But with strained state finances and demands for employment often erupting in localised social discontent, it is becoming more apparent that the IT sector must be leveraged for economic development. Improvements in security are likely to continue to attract foreign direct investment. However, the country’s IT sector can only compete internationally on high-value segments with the right regulatory incentives in place. Parliamentary approval of the Start-up Act and a reduction of punitive taxes on IT consumption would give the sector a necessary boost.

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