Ghazi Meziou, Associate Lawyer, Meziou Knani & Khlif: Viewpoint

Viewpoint: Ghazi Meziou

The early stages of the democratic transition of power – the first in the Arab world after the Arab Spring, which took root in Tunisia – were difficult, and Tunisia went through great political challenges. Adoption of a new constitution in 2014 by a very large majority, confirmed Tunisia’s attachment to equality between men and women. This has led to an impressive mobilisation of civil society. The main trade union, the main employers’ organisation, the Tunisian Lawyers’ Council and Tunisian Human Rights League exerted gentle, but constant, pressure on the political class and promoted a peaceful end to the crisis. The central role of these non-governmental organisations in the transition has been recognised by the international community and earned them the 2015 Nobel Peace Prize.

Under the new constitution, parliamentary and presidential elections were held in 2014. The ruling coalition, led by the main Islamist party, Ennahda, was defeated and democratically acknowledged its defeat. The outgoing president lost and acknowledged this, as well. Nida Tounes, which won a majority in the legislative elections, set up a broad coalition, including Ennahda, giving it a strong majority in parliament.

Aware of the need to revive the economy and encourage investment, Tunisia has taken various operational and legislative measures to improve security conditions. Finally, the authorities have undertaken legislative projects to facilitate and simplify investment in Tunisia. A number of important laws have been promulgated: a new investment law that entered in April 2017; a law on public-private partnerships, which recast competition and price legislation; a new banking law; and a new law relating to collective proceedings, among others. Although growth has not yet materialised and economic and social difficulties remain, notably due to unemployment among university graduates, the business climate is improving, Tunisian investment is resuming and foreign investors are showing more interest in the country. An international investment conference was organised in November 2016, generating billions of dollars of foreign investment pledges, some of which is in the process of being realised. The security climate is also improving and tourism is recovering slowly.

However, much remains to be done, and it is crucial for the country to pursue its legislative reforms, with a view to freeing investment, particularly foreign investment. From our point of view, rethinking Tunisian legislation on foreign exchange is vital. While foreign investors already may already transfer their dividends and the proceeds from the sale of their investment, Tunisian companies, including those owned by foreigners and working in the local market, remain subject to constraints. Moreover, the government’s monetary policy aimed at promoting exports has led to a rampant depreciation of the Tunisian dinar in relation to the dollar and the euro. While it is understandable that the government is using this option in the current context, the inconvertibility of the Tunisian dinar has made it difficult for investors and Tunisian firms to find reasonably priced financial products that allow them to hedge against foreign exchange risk, both in Tunisia and on the international market. It would undoubtedly be beneficial for the Tunisian government to play this role and offer cheaper dinar-hedging instruments that would provide investors with more predictability.

At the same time, we hope for rapid changes in agricultural investment legislation to allow foreign investors to own agricultural land, or at least to take over land for an extended period. Indeed, while it is now possible for companies that are majority-owned by foreigners to secure leases on agricultural land, the conclusion of long-term leases with a duration of more than 20 years is incompatible with legislation prohibiting long leases, which does not precisely define the maximum duration allowed. This law, now fallen into virtual obsolescence, prevents the implementation of long-term and reassuring solutions for investors.