Tunisia’s Outlook UK-Tunisia Trade and Investment Forum 2018

1. Tunisia’s OutlookUK-Tunisia Trade and Investment Forum 2018 • Dr Bassem Kamar • Lead Economist, Southern and Eastern Mediterranean Region, EBRD OFFICIAL USE

2. The Jasmin Revolution National Anthem of Tunisia If the people will to liveDestiny must surelyrespond إذا الشّعبُ يَوْمَاً أرَادَ الْحَيَـاةَ فــلا بــدّ أن يســتجيب القــدرْ OFFICIAL USE

3. Bulgaria OFFICIAL USE

4. Romania OFFICIAL USE

5. Hungary OFFICIAL USE

6. Venezuela OFFICIAL USE

7. Indonesia OFFICIAL USE

8. Tunisia OFFICIAL USE

9. Growth is expected to increase gradually • Latest data – Real GDP growth accelerated to 2.7% and could reach 4% • High level of confidence in the country and in the economy • Increasing investment • Exports to and growth in Europe • Tourism– levels last seen in 2010 • Strong recovery in mining, industries, and construction • Agriculture - thanks to an exceptional harvest

10. Key reforms (supported by IMF) • Fiscal Consolidation: • Measures to improve tax collection, • Reducing wage bill • Energy subsidy reforms • Social safety nets: Targeting the needy and the most vulnerable • One-stop shop for investors andNew investment code, competition law, and a PPP law, • Highly qualified technocrats, rich democratic debate OFFICIAL USE

11. Challenges • Inflation 7.8% • Current Account Deficit 10.7% • Exogenous shock of high oil price • Skills mismatch • Logistics and infrastructure OFFICIAL USE

12. Challenges  Opportunities • Inflation 7.8%  Moving to Inflation Targeting • Current Account Deficit 10.7%  Exchange rate flexibility and liberalisation of capital movement • Exogenous shock from high oil price  Green Energy (private sector participation) • Skills mismatch  Need for proper mapping, fiscal incentives, and training (private sector participation) • Logistics and infrastructure Need for coherent policies and simplification of administrative and regulatory obstacles (Public Private Partnership) OFFICIAL USE

13. EBRD investments in Tunisia Since 2012: • Technical Assistance to 680 local SMEs • Women in Business • Financing to 41 projects • €731 million in net cumulative investment • 69% private sector share of cumulative investment • 54% green share OFFICIAL USE

14. EBRD Regional Engagement: Two thirds of EBRD cumulative investment and support to SMEs is done outside Greater Tunis • ONAS: Depollution of the Bizerte Lake (EUR 20m) Bizerte Ariana Manouba • Sanlucar: Financing of a raspberry farm (EUR 4m) Ben Arous Jendouba Beja Nabeul Zaghouan Le Kef • STEG: Reinforcement and strengthening of the national electrical transmission grid in the North East of Tunisia (EUR 46.5m) Siliana Sousse Kairouan Monastir Mahdia Kasserine • IFFCO: Production development, supply and bottling of olive oil (EUR 8.5m) Sidi Bouzid Sfax • Dräxlmaier: Production capacity expansion (EUR 6.2m) Gafsa • SNCFT: Railway Network Upgrade and Purchase of Electric Multiple Units ("EMUs") (EUR 160 m) Tozeur Gabes Kebili Mednine • Borges: Production development (EUR 15m) • Sovena: Production development, supply and bottling of olive oil (EUR 5m) Tataouine ASB’sImpact • Serinus: Development of oil and gas field (EUR 46.2m) 1- 4 Projects 6- 19 Projects • Financial Institutions: over 1/3 of EBRD credit lines to banks, leasing and microfinance institutions directed outside Greater Tunis (EUR 80m) 20- 49 Projects 50- 100 Projects 101+ Projects OFFICIAL USE

15. How does this translate in investments? • In September 2018, the EBRD co-organised with the Tunisian authorities and the IFC a PPP conference • 1,200 Tunisian and internationaldelegates • 33 projects presented across the ports, water sanitation, desalination, road, railways, tourism, power, solid waste, and urban transport sectors • A combined €5.4 billion OFFICIAL USE

16. To sum it up Democratic Transition Necessary reforms Regain in confidence Positive outlook OFFICIAL USE

17. Thank you KamarB@EBRD.com • Dr Bassem Kamar • Lead Economist, Southern and Eastern Mediterranean Region, EBRD OFFICIAL USE