Tunisia

Last updated: January 24, 2020

The Tunisian Republic lies on the southern shore of the Mediterranean between Algeria in the west and Libya in the east. The country with its 11.5 million inhabitants 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. A lively democratic process has since got underway. In autumn the constitutional lawyer Kais Saied was elected as the new president. No party emerged as the clear winner in the parliamentary elections in autumn 2019; the formation of a coalition government continues. Elyes Fakhfakh, born in 1972, was named Prime Minister-designate in January 2020.

The EU is Tunisia’s main trading partner. An association agreement with the EU has existed since 1998. In 2016, negotiations began for deeper cooperation within the framework of a free trade area (DCFTA) for the liberalization of services and agricultural goods. The Tunisian government would also like to revive the Union of the Arab Maghreb (UMA) as a regional organization and thus the economic integration in North Africa. Germany primarily exports electrical engineering, motor vehicles and motor vehicle parts, machines and textiles to Tunisia and ranks fourth among the main supplier countries.

Tunisia has a modern economic structure based on a market economy as well as important locational advantages that are valued by foreign investors: a high degree of industrialization, a well-developed infrastructure, proximity to Europe and a qualified workforce, whose relatively high productivity and tax advantages for export companies (“Offshore sector “). The service sector generates the largest share of GDP (approx. 63.5% with 51.7% of all employed persons).

Tunisia is a country that is relatively poor in raw materials, but it is the fifth largest olive oil producer in the world. The use of renewable energies – especially wind and solar energy – still plays a subordinate role. Their share in electricity production is just under three 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 in improving labor market-oriented training and further education.

Tunisia has carved out a good position for itself in the region by promoting the private sector and integrating it into the global economy. The investment climate is basically good. In particular, it has made it easier to set up businesses and improved the tax system. By concentrating on specific industries and continuing to improve infrastructure and networking, private investments are to be promoted in all regions, including those outside the economically strong coastal region.