
Foreign Direct Investment
In the context of social and political turmoil, FDI flows to Tunisia remain below their potential. According to UNCTAD's World Investment Report 2022, FDI inflows to Tunisia were relatively stable in 2021, when they totalled USD 660 million, from 652 million one year earlier. The stock of FDIs reached USD 33.4 billion, almost 72% of the country’s GDP. According to the latest data by the Tunisian Investment Office, in 2022 FDI inflows to the country recorded a year-on-year increase of 18.4% to reach an amount of TND 2.214 billion. The manufacturing sector as a whole attracted most of the investments (58.7%). Of these, the electronics sector alone accounted for 48.3%, ahead of the mechanical, metal and metallurgical (14.8%) and plastics processing industries (10.4%). The rest of the inflows were divided among the energy sector (22.2%), services (18.7%), and agriculture (0.4%). In terms of countries, France was by far the main investor (more than one-third of total flows), ahead of Qatar, Italy, and Germany. The regional distribution confirms a great disparity among regions: more than 53% of FDI is concentrated in the Greater Tunis regions (mainly the governorate of Tunis) and in the Northeast region (29.5%).
The key assets of Tunisia are its proximity to Europe, sub-Saharan Africa and the Middle East, free trade agreements with the EU and much of Africa and an educated workforce. In recent years, the Tunisian government had carried out necessary structural reforms to improve Tunisia's business climate, including an improved bankruptcy law, an investment code and an initial 'negative list' and a law allowing for public-private partnerships. The government adopted laws allowing to start a business more easily (more services are available via the one-stop shop, and fees decreased); registering property is now faster and more transparent and paying taxes is easier (implementation of a risk-based tax audit system). Nevertheless, there are still huge bureaucratic barriers to investment. State-owned enterprises are a major player in the Tunisian economy and several sectors remain closed to foreign investment. The informal sector, estimated at between 40% and 60% of the overall economy, is still a concern since legal businesses are forced to compete with smuggled goods. Moreover, the country is facing high political and social instability, unemployment, inflation, and rising levels of public debt. Tunisia ranks at 107th spot out of 177 countries in the 2022 Index of Economic Freedom and 70th out of 180 in the Corruption Perceptions Index.
Foreign Direct Investment | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | 845 | 652 | 660 |
FDI Stock (million USD) | 31,605 | 35,006 | 33,440 |
Number of Greenfield Investments* | 31 | 10 | 8 |
Value of Greenfield Investments (million USD) | 2,519 | 474 | 268 |
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Tunisia | Middle East & North Africa | United States | Germany |
Index of Transaction Transparency* | 6.0 | 6.4 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 7.0 | 4.8 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 5.0 | 4.7 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
