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In conjunction with KPMG, this chapter explores the taxation system and Tunisia’s efforts to build an investor-friendly environment. It also contains an interview with Moncef Boussannouga Zammouri, Managing Partner, KPMG.

With a growing demand for services from both nationals and foreigners, the health sector remains a crucial pillar of Tunisia’s economy. The country’s low health care costs are a key competitive advantage, attracting patients from Africa and Europe. However, many challenges need to be addressed before the sector can realise its full potential. To this end, the raft of investments is expected to improve the quality and provision of care. As enrolment rates decline due to social and demographic changes, the education sector must shift its focus to raising the standard of teaching, ensuring young people remain in education and improving student performance. The demographic transition may also help to ease graduate unemployment rates, acting as a catalyst for changes to education policy. This will prove essential to matching graduate qualifications to the needs of the job market. This chapter contains interviews with Sara Masmoudi, President, National Chamber of Pharmaceutical Industries; and Houbeb Ajmi, Regional CEO, Honoris Group.

Despite major economic headwinds in 2018, Tunisia’s construction sector looks to be on the upswing. Over the past few years increasing global oil prices coupled with the depreciation of the Tunisian dinar have seen demand for projects decrease and the cost of materials rise. Additionally, upcoming parliamentary and presidential elections in late 2019 are likely to temporarily stoke uncertainty. However, through a number of infrastructure tenders, the state is helping to underpin industry demand. Driven by a growing middle class, rising urbanisation and some of the most attractive prices in the Mediterranean region, Tunisia’s real estate sector offers some of the best potential in North Africa. However, other long-standing structural challenges also continue to weigh on the market. These include administrative and infrastructural blockages, tightening liquidity, political uncertainty and increasing land scarcity. As such, investors will need to look beyond the short term for returns. Jamel Ksibi, President, National Federation of Construction and Public Works Entrepreneurs.

Given Tunisia’s location in the centre of North Africa and its proximity to Europe, the country’s transport sector plays a vital role in its economy, and improving the efficiency of the transport network will continue to present new opportunities. The country’s well-connected port and air infrastructure have historically formed the basis of its competitiveness in global markets as well as its ability to leverage labour cost advantages. At home, government-directed, trans¬port-focused construction projects account for a large chunk of public spending as part of a drive to mitigate regional disparities, encourage urban mobility and increase international connectivity. Growing its internal and regional trade links with its African neighbours and trading partners across the Mediterranean will build momentum, and, in the long term, the transport sector will be poised to deliver significant opportunities for future growth. This chapter contains an interview with Sana Skhiri, President, Tunisian National Federation of Airfreight Forwarders.

Efforts to overhaul the country’s hydrocarbons regulations, however, have been stymied by political instability, while the development of energy projects has been slowed by social unrest across the country. A revised hydrocarbons code has yet to be passed by Parliament and the question of whether to tap into non-traditional oil and gas reservoirs has increasingly become a key issue of debate. Despite the challenges, progress in diversifying the energy mix has seen the state issue a host of international tenders aimed at attracting contractors into a new renewable energy programme. This is expected to help the country achieve its goal of having renewable sources account for 30% of the energy mix by 2030. This chapter contains interviews with Slim Feriani, Minister of Industry and Small and Medium-Sized Enterprises; and Moncef Harrabi, CEO, Tunisian Company for Electricity and Gas.

As advancements in irrigation and mechanisation are boosting efficiency and profitability, considerable improvements in infrastructure are still required, as is the organisation of farms and supply chains to ensure long-term development. Boosting competitiveness so that producers and exporters are able to take advantage of the opportunities provided by the Deep and Comprehensive Free Trade Area is particularly important. The government has a vital role to play in achieving these objectives in terms of investing in infrastructure and logistics, pro¬viding a robust legal framework and improving access to financing to stimulate further private investment. This chapter contains an interview with Abdellatif Ghedira, Executive Director, International Olive Council; and Mohsen Boujbel, General Manager, VACPA Boudjebel.