Tunisia aims to turn investment pledges into jobs and growth

Tunisia received nearly $15 billion in pledges of investment and financial support at an international conference aimed at energising its fragile economy, officials have said.

The task now is to work to transform the promises into jobs and growth, they said.

The conference was organised as Tunisia seeks to shore up its finances and reverse a decline in foreign investment since the country’s 2011 Arab Spring uprising.

By the end of the two-day event, agreements for investments totalling $6.5 billion had been signed and more than $8 billion in promises of financial support had been made, Prime Minister Youssef Chahed told reporters.

“This conference has brought back confidence in Tunisia’s democracy and allows for a strong economic recovery,” he said. “Tunisia is on course and now the work begins to make this financing a reality.”

Tunisia has been lauded as the sole success story of the Arab Spring uprisings, winning praise for the democratic transition launched when former leader Zine El-Abidine Ben Ali was toppled five years ago.

Gross domestic product (GDP) is $43 billion, according to the World Bank, and the 2017 fiscal deficit is projected to be 5.4 percent of GDP. Before the conference, Tunisia had been expecting to seek nearly $3 billion in foreign loans next year.

Economic progress has been hampered by labour unrest, militant attacks, red tape and corruption. Growth is weak and unemployment high, especially among young people.

At least 500 foreign companies left after 2011, and new foreign investment fell to 2 billion dinars ($885 million) in 2015 from 3.5 billion dinars in 2010.

The government is now facing resistance from unions as it tries to pass austerity measures demanded by foreign creditors.

It recently passed a new investment law designed to reduce bureaucracy, taxes on profits and restrictions on transferring funds out of the country.

Officials say they have been lining up private and public sector deals for investment in infrastructure, renewable energy, new technology and tourism.

Industry Minister Zied Ladhari told Reuters that new deals included investment by U.S. firm General Electric in a health care project, and a vehicle assembly plant planned by French automaker Peugeot.

Qatar’s Mejda Group signed a deal on Wednesday to develop a $220 million tourism complex, including a luxury hotel and a shopping centre, just outside Tunis. The project is expected to create 1,500 jobs, with work to start in December, a senior Tunisian official said.

The Tunisia 2020 conference produced major pledges including aid and loans from Qatar, the European Investment Bank, the Arab Fund for Economic and Social Development, and the African Development Bank.

The fresh financial support should ease pressure from looming debt payments, $3 billion of which had been due next year. But analysts say it could also add to longer term debt and the challenge remains securing long-term private sector investment and creating viable economic projects that foster growth.

The president of Tunisia’s parliament, Mohamed Ennaceur, said the chamber would seek to monitor “the transformation of the announcement of financial pledges into investment to create jobs and revive the economy”.

 Africa.tvcnews- Reuters

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