Tunis investment conference draws $15 billion in pledges
Tunis - Tunisian officials expressed satisfaction over the investment conference at which their country received about $15 billion in aid, loans and pledges in support for its fledgling democracy from a wide array of countries.
“Tunisia 2020 international investment conference enabled Tunisia to mobilise 34 billion dinars ($15 billion),” Tunisian Prime Minister Youssef Chahed said November 30th at a news conference at the end of the international gathering.
“Fifteen billion dinars came in the form of signed accords and the other 19 billion as financial pledges,” he said.
The conference was the culmination of Tunisian government efforts to position the country as a destination for investment after more than five years of instability since the ousting of President Zine el-Abidine Ben Ali.
The achievements of Tunisia 2020 could not conceal the challenges ahead for the North African country, however.
The backing of many Arab and European countries and international institutions puts the onus on Tunisia’s political and economic players to speed up reforms and turn the pledges into opportunities for remote regions and jobs for impatient young people.
Tunisia offered investors more than 80 projects worth about $30 billion in 20 sectors.
Some of the potential investors are waiting to see how the government intends to cut its bloated bureaucracy and whether it can successfully deal with the agitation of combative trade unions.
Also, the Tunis conference mirrored the shift of the United States after the triumph of Donald Trump in the presidential race.
The outgoing Obama administration had been a cheerleader for Tunisia’s transition towards a multiparty democracy and had offered various forms of backing as Tunisia faced an economic slump and cross-border security threats.
The United States did not, however, announce any new assistance at the conference and the US official representation was below the expected level compared to Arab and European countries that pledged tangible forms of support to Tunisia.
“Some American firms planned to attend the conference but they cancelled their participation. I suspect it is because of the presidential vote outcome there,” said Mourad Fradi, the chief organiser of the conference.
Still, 4,500 participants from 70 countries, mainly European and Arab, took part in the conference, Chahed said.
Qatari Emir Sheikh Tamim bin Hamad al-Thani promised $1.25 billion in financial backing. He said the money would “support the Tunisian economy and strengthen its process of development” but he gave no details about the form of the proposed assistance.
Tunisia is negotiating with Qatar the extension of a deadline for the repayment of $500 million, which ends at the end of December, officials at the Finance Ministry said.
French Prime Minister Manuel Valls said the French Development Agency planned to invest at least $265 million a year in Tunisia.
“We will also implement operations to convert Tunisian debt into development projects,” he said.
He hailed Tunisia’s “exemplary transition” following the overthrow of Ben Ali in 2011 and said France had “a duty and a responsibility” to help the North African country.
The European Investment Bank granted Tunisia $2.65 billion through 2020. The African Development Bank lent Tunisia $1.59 billion over five years. The Kuwait-based Arab Fund for Economic and Social Development’s head Abdlatif Al- Hamad pledged $1.5 billion in soft loans to finance various projects.
The Saudi Development Fund pledged $848.6 million, including a grant of $106 million. Kuwait pledged $500 million in soft loans and Turkey, which is facing its own economic crisis, announced it had earmarked $100 million to finance exports to Tunisia.
“It is important now to turn these resources into projects to benefit the marginalised regions and unemployed young people,” Chahed said.
The Tunisian government is focusing on economic recovery and the need to overcome stagnation.
“Tunisia cannot continue on that path with no genuine growth,” Investment and Cooperation Minister Fadhel Abdelkefi told the gathering.
“Tunisia is facing today exceptional circumstances and it needs exceptional support from its partners and from international financial bodies in a form and in a volume that go beyond traditional frameworks,” Tunisian President Beji Caid Essebsi said at the conference.
The expectations of Tunisians, mainly in remote areas, added pressure on the government to find resources to spend on public services and infrastructure, health care and education.
More than 85% of Tunisia’s annual budget goes to fixed items such as public wages, public services and food subsidies, leaving little to invest in new projects.
Despite the abundance of planned projects and financing pledges during the conference, Tunisia faces daunting economic challenges, including clearing obstacles, such as red tape and issues related to land ownership, facing investors.
“We need to improve our capacity of absorbing investment. We have some problems, which explain the limited level of use of resources in investment,” said Hakim Ben Hammouda, a former Finance minister.