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Tunisia’s energy balance shifted from surplus to deficit in 2000, and the country has since remained a net importer of energy. With domestic production falling and demand rising, Tunisia is looking to diversify its energy mix through renewables, higher imports and by promoting energy efficiency through a gradual scaling back of subsidies. Overall, attempts to promote efficiency and alternative energies have moved slowly in Tunisia, in part due to the post-revolution uncertainty of recent years, a reflection of the a high degree of state intervention in the energy sector. Despite challenges, Tunisia’s efforts to establish a more efficient, diversified energy portfolio could move forward in 2016. The split, in January 2016, of Tunisia’s Ministry of Industry, Energy and Mines, and the subsequent formation of the Ministry of Energy, could serve to refocus attention, previously shared with industry and mining, back on the energy sector. It is also true that if the new ministry is able to deliver a more cohesive sector strategy, as called for by industry players, this could help reduce the country’s reliance on imports and allow it to tap into the underutilized potential of its hydrocarbons and renewable resources.

The instability generated by Tunisia’s 2011 revolution resulted in the delayed roll out of important infrastructural projects and needed maintenance of existing infrastructure. Although Tunisia’s utility infrastructure (water, electricity and gas) ranks strongly by regional standards, its transport-related infrastructure – historically one of the country’s important comparative advantages, with high levels of productivity and reliable performance – has deteriorated in recent years. From 2010 to 2014, the country dropped 49 places on the World Bank’s Logistics Performance Index, falling from 61st to 110th. To reverse the decline of recent years, and in turn improve maintenance, capacity and efficiency, the country is rolling out several initiatives to boost connectivity, in collaboration with external donors and private sector partners. Among the new projects mooted are a new Africa-focused freight carrier, highway upgrades and a pending open skies agreement – all of which, if executed in a timely fashion, should help Tunisia begin to move up the rankings. Policy changes and increasing the private sector’s role through partnerships will serve to encourage further investment. This chapter contains an interview with Sami Battikh, CEO, Office of Merchant Marine and Ports (OMMP).

Although insurance penetration levels in Tunisia are low by international standards, overall premiums are growing steadily and the life segment is expanding rapidly, as are new niches such as takaful (Islamic insurance) and micro-insurance. The industry regulator is also working on a number of reforms to bolster sector development, including changes in the rules on pricing mandatory third-party liability vehicle insurance, which is among the largest product lines sold in the country but is also loss-making. While the life market has been growing quickly in recent years, low overall penetration rates present insurance firms with wide-ranging opportunities. As the market expands, reforms should help to boost profitability from vehicle insurance, allowing firms to invest in less developed areas of the industry. This chapter contains an interview with Lassâad Zarrouk, CEO, STAR Assurances.

Tunisia has an active stock market that has seen a large number of equity listings in recent years. Furthermore, there are regular government and corporate bond issues, though the secondary market is relatively shallow and bond trading activity is minimal. Both markets, and particularly the corporate bond segment, are dominated by the financial sector. Following strong growth in 2014, the country’s all share index, Tunindex, had a good first half of 2015 but lost all of the period’s gains following a terrorist attack in June that dented economic confidence. Industry players are hopeful that the market will perform better in 2016, and the Tunindex’s strong growth prior to the attack, as well its good start to 2016, suggests that such hopes may well be fulfilled, provided the security environment fully establishes. This chapter contains an interview with Bilel Sahnoun, CEO, Tunis Stock Exchange; and a viewpoint from Fadhel Abdelkefi, General Manager, Tunisie Valeurs.

The Tunisian financial services industry, of which banking is by far the largest component, accounted for 3.7% of the country’s GDP in 2014. Sector activity rose by 3.8% in 2014 and a further 3.3% during the first nine months of 2015 compared to the same period a year earlier. The sector’s trajectory is largely positive, with lending and leasing activity growing rapidly in recent years, but the stability and profitability of the sector has been negatively affected by poor performance at several large state-owned banks as well as by market fragmentation. However, year 2015 saw several of these institutions recapitalised alongside changes made to their management structures. The recapitalisation of key public banks is set to return the sector to comparative health as well as help to address the wider issue of tight liquidity in the market. While it is uncertain if management changes at the banks can ensure they do not again start to build up poor loan books, the improvement of the democratic environment should reduce pressures for politically-connected lending that occurred in the past. This should in turn help to bolster financial sector stability, as should plans to raise prudential ratios under the new banking law, which will also help to support continued rapid growth in emerging niches including Islamic banking and leasing. This chapter contains interviews with Chedly Ayari, Governor, Central Bank of Tunisia (CBT); and Ahmed Rjiba, CEO, Banque de l’Habitat.

One of the most developed and diversified economies in the region, Tunisia has for years attracted praise for relatively prudent management. However, the country has suffered from reduced growth following the 2011 revolution, which in turn has exacerbated a number of structural problems. A pair of terrorist incidents in 2015 further complicated the situation, dampening the performance of the tourism sector – a key employer – but hopes are high that 2016 will see a recovery in growth. Furthermore, the government – with strong support from international donors – is pursuing a wide-ranging series of reforms aimed at streamlining the economy and boosting foreign investment in order to put the country on a strong and sustainable long-term development path. Providing that the government can maintain stability and continue to push through and implement its reform agenda, on which the IMF says the medium-term economic outlook depends, factors such as the country’s well-educated workforce and proximity to Europe should help to attract more investment and boost long-term growth levels. This chapter contains interviews with Slim Chaker, Minister of Finance; Yassine Brahim, Minister of Development, Investment and International Cooperation; Wided Bouchamaoui, President, Union Tunisienne de l’Industrie, du Commerce et de l’Artisanat (UTICA); and a viewpoint from Adnène Zghidi, Managing Partner, BDO Tunisia.