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Tunisia

Last updated: February 23, 2023
The Republic of Tunisia is located on the southern shore of the Mediterranean Sea between Algeria to the west and Libya to the east. With its 11.9 million inhabitants, the country is not quite half the size of Germany. The capital Tunis – on the site of ancient Carthage – is located in the north of the country directly on the sea.
In December 2010, Tunisia was the starting point for the political upheavals that continued in many other Arab countries. In the meantime, a vibrant democratic process has taken hold.  With the adoption of a new constitution in 2014 and the subsequent holding of parliamentary and presidential elections, political change in Tunisia made steady progress. Since the summer of 2021, the country has faced a constitutional crisis; a referendum on the constitution was held in late July 2022. Of less than one-third of those who participated in the election, 94.6 percent voted in favor of amending the constitution. This is considered controversial and grants the president further powers in appointing judges and dissolving parliament. President Kais Saied appointed Najla Bouden as prime minister for the first time in October 2021.
The EU is Tunisia’s most important trading partner. An association agreement with the EU has been in place since 1998, and negotiations began in 2016 for deeper cooperation under a free trade area (DCFTA) to liberalize services and agricultural goods. The Tunisian government also wants to revive the Arab Maghreb Union (UMA) as a regional organization and thus economic integration in North Africa. In addition, Tunisia is also part of the Agadir Agreement with Morocco, Egypt and Jordan, which allows partner countries to eliminate all trade tariffs among themselves and harmonize rules on product standards and tariffs. In addition, Tunisia is also a partner in the EU’s Neighborhood Policy, which promotes market economy principles and sustainable development.
Germany exports mainly electrical engineering, chemical products, textiles and machinery to Tunisia and ranks fourth among the main supplier countries. Tunisia ranks first in North Africa in the Global Innovation Index 2020, the Talent Competitiveness Index 2020 and the Global Entrepreneurship Index 2020.
Tunisia has a modern market economy and important locational advantages that are appreciated by foreign investors: a high level of industrialization, a well-developed infrastructure, proximity to Europe and a skilled workforce with relatively high productivity, as well as tax advantages for export companies (offshore sector). The service sector generates the largest share of GDP (about 63.5 % with 54.78 % of the total labor force).
Tunisia is a relatively resource-poor country, but it is the fifth largest olive oil producer in the world. The use of renewable energies such as wind and solar power still plays a minor role. Their share of electricity production is six percent. A medium-term energy strategy aims for a share of 30 percent by 2030. The greatest challenge lies in promoting employment for the relatively young population and improving labor market-oriented education and training.
Tunisia has established a good position in the region by promoting the private sector and integrating into the global economy. The investment climate is fundamentally good. In particular, business start-ups have been made easier and the tax system has been improved. By concentrating on certain industries and further improving infrastructure and networking, private investment should be encouraged in all regions, even outside the economically strong coastal region.
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