Economy and trade

Tunisia’s GDP per capita was in 2020 3,550 USD total GDP in purchasing power parity was about 149,190 billion USD (Wikipedia Economy of Tunisia). The OECD expects Tunisia’s GDP to expand with 3 – 3,75 % in 2021 and in 2022 (Source: OECD Economic Outlook, Volume 2021 Issue 1).

Key economic sectors are oil, phosphates, agri-food products, car parts manufacturing, and tourism. In recent years the contribution of the ICT sector to the country’s GDP has almost reached the same level as the tourism sector.

According to the Observatory of Economic Complexity (OEC), an online data visualization and distribution platform focused on the geography and dynamics of economic activities, Tunisia’s main exports in 2019 were Insulated Wires (1.99 billion USD), Non-Knit Men’s Suits (881 million USD), Crude Petroleum (653 million USD), Non-Knit Women’s Suits (517 million USD), and Pure Olive Oil (502 million USD).

The main export markets in the EU in 2019 were France (4.82 billion USD), Italy (2.74 billion USD), Germany (2.1 billion USD), Spain (686 million USD), and Libya (539 million USD). The export of computer services was in 2018 266 million USD, out of a total of services exports of 3.84 billion USD. (Source: OEC, https://oec.world/en/profile/country/tun)

Office space and infrastructure

Technology and business services companies can settle with options. After SmartTunisia there are 10 operational Technoparks, and 18 Cyberparks across the country, focusing on ICT services, incl. software development, other ICT services and call centers.
Most of these parks and centers apply a proven recipe of hosting not only private companies but also educators and research organizations. Further most of these facilities extend their services to fulfill a business accelerator function. All in all investors from the ICT sector have for the region very good options to open own delivery centers – not only in the capital Tunis, but also in other cities like Sousse and Sfax.
SmartTunisia states the average rental cost for Class-A offices in top locations is approximately 6.50 EUR per sqm per month.

Here a few of the Tech-parks by name and with some details:

Technopole de Borj-Cédria (TBC) with a strong focus on facilitating R&D in bio-technology, material science, renewable energies and water and environment. The park is housing several R&D centres, university faculties and industrial facilities.

Technopole El Ghazala is located in the North of Tunis and part of the Ariana Governorate, which has been experiencing a boom in urbanization. The park was founded in 1999 and has its focus on the ICT sector, welcoming It and software companies and also including training and scientific research activities, of which the presence of The Tunis Higher School of Communications and the Tunis Higher Institute of Technological Studies in Communications is evidence. (Source: https://fr.wikipedia.org/wiki/El_Ghazala)

Sousse Technopole is a tech-park in Sousse, located on the Mediterranean coast and is focused on housing companies and supporting activities in the fields of mechanics, electronics and computer science.

Technopole de Sfax is also specialized on hosting ICT sector companies, organizations and initiatives. The park offers of 3700 m² covered offices and landscaped of between 139 sqm and 369 sqm. It also offer 2000 sqm business incubator space and a technology resource center of the same size. (Source and more information: https://ictsfax.com/)

The country’s internet connectivity is ensued by sea and land cable providing a bandwidth of about 180Gb/s. (Source: Invest in Tunisia)

The ICT sector

According to Smart Tunisia, the Tunisian Tech sector accounts for about 7,5% of the country’s GDP. This gives an indication about the efforts that have been taken by the public and private sector to develop ICT capabilities and resources.

A strong focus on education and research and the integration of education and research in business environments, have certainly contributed to the favorable climate for ICT in Tunisia.

Currently there are about 80,000 Tunisians employed in about 1,800 ICT companies. Source: tap.info.tn, via GIZ Tunisia).

ICT exports

Tunisia’s ICT services export jumped from around USD 32.1 million USD in 2004 to 409.5 million USD in 2013. The last attainable data is from 2017 with an ICT services export of about 300.5 million USD (Source: Worldbank, International Monetary Fund, Balance of Payments Statistics Yearbook and data files).

This accounted for about 9.18% of all services exports in 2017 which was even higher than the percentage of ICT services exports of Hungary (8.19% of all services exports in 2017), an established shared services location in the center of Europe. It also tops another emerging location in the region – Morocco, which was 8.61 % of all services exports in 2017. (Source: Worldbank, International Monetary Fund, Balance of Payments Statistics Yearbook and data files)

With that Tunisia had achieved an above global average ICT services export rate, which was in 2017 about 7% of all services exports. To provide further perspective: Rwanda, which has a similar population had in the same year (2017) an ICT export rate of all services exports of only 2%. Looking at developed markets, Belgium, also with a similar population had in 2017 an export rate of ICT services (of all services) of 10.71%. (Source: Worldbank)

ICT sector development

The availability of investment and venture capital is a big factor for ICT sectors and digitally driven economies to growth. In The Venture Capital & Private Equity Country Attractiveness Index 2021 Edition, Tunisia ranks 63 out of 125 (Source: IESE Business School, University of Navarro, Spain).

The government has initiated in 2019 a “Start-up Tunisia” program, aiming at new businesses in the digital and innovative start-up sector. The program has been supported by the Worldbank with 2 projects that are supposed to ease the access to financing with a combined total of 175 million USD. (Source: Worldbank: https://www.worldbank.org/en/news/press-release/2019/06/14/tunisia-takes-a-step-closer-to-a-new-economy-and-digital-transformation)

In April 2017 the government passed a new investment law, that offers a number of benefits, incl.:

• Total freedom of foreign participation in the capital of offshore companies;

• Reduction in the number of authorizations and revision of specifications;

• Free access to land ownership for the realization of investment;

• Guarantees the investors in accordance with international standards on fair and equitable treatment and industrial and intellectual property

• Freedom to transfer funds (profits, dividends and assets) abroad;

• Possibility to recruit 30% of foreign executives during the first 3 years upon simple declaration and 10% of executives guaranteed thereafter in all cases.

(Source: Exportiamo Italy: https://www.exportiamo.it/aree-tematiche/13719/%e2%80%9ctunisia-digital-2020%e2%80%9d-why-invest-in-tunisia/)

There are 145 support organizations in the Start-up environment in Tunisia, including:

• 13 incubators and accelerators
• 45 Co-woring spaces
• 16 investors
• 5 Media
• 4 Major sector events
• 33 Enablers, incl. foreign sector and economic development and support organizations
• 25 Programs
and more (Source: SmartTunisia 2021)

Labour market

Around 3.5 million Tunisians are in employment, which is average in the region. According to the Danish Trade Union Development Agency’s “Tunisia Labour Market Profile” the country’s labor market suffers from a miss-match in the number of available jobs and a growing number of university graduates.

The country has a modern legislation, representing woman rights, however the participation is with 24%, compared to 69% men’s participation in the labor force low. On the other side Tunisia has a high rate of firms with woman ownership. (Source: World Bank, Tunisia Enterprise Survey, 2013) For the ICT sector this may change as we see a high rate of woman enrolled in ICT related studies of 61% (out of 40,000 students). (Source: Smart Tunisia)

Less relevant for the ICT sector, but important to understand the Tunisian labor market, is the high rate of informal employment, which produces an estimated 30-40% of the GDP of the country. This is caused by a weak job creation, which has pushed large parts of the employable workforce into own-employments and family working relations.

Labor cost

See our graphic and info on salaries in the Outsourcing Destination Guide Tunisia, which you can download for free at www.outsourcing-destinations.org

Education

Reforms of the education systems during the period of 2002 – 2016 have had positive effects and placed Tunisia among the countries with the highest investment in education in Northern Africa. In 2017/18 there were 300,000 students enrolled students in total. (Source: SmartTunisia)

However, looking at the low job creation situation in the country and the high informal employment rate, there is much to do for the government to exploit the full potential of the country’s youth.
The ICT sector contributes to that with 40,000 students and 9,000 graduates every year of which 61% are woman. Smart Tunisia counts 82 institutes that offer ICT education in 450 faculties. About 40% of the universities are specialized in ICT relevant education. These numbers point to a high dedication to transform the economy and it makes the country attractive for investments in ICT and BPO delivery centers.

Woman seem to be higher educated than men – 28% of woman participate advanced education, compare to than 15% males.

Gross enrolment in tertiary education for all faculties has been on the decline since 2011 decreased slightly among males to a point where it reached regional level in 2017. This trend has been similar among woman but with a more severe decline of 5% and fell below the regional level.

For the ICT education the number of graduates has been decreasing as well from about 12,000 graduates in 2014 to about 8,000 in 2019. This is still high and a similar number to Morocco, which population is 3 times higher. (Source: Germany Trade and Invest “Digitalwirtschaft wichtiger Hoffnungsträger für die Zukunft”)

Companies also have options for individual training programs, e.g. via the German Digital Skills Accelerator Africa Association, that provides employee trainings in various technical skills.

Conclusion

Tunisia has surely been taking right steps to make digital services an integer part of its economy.
The efforts on the education side for instance have had great results and in combination with the positive investment climate this should translate to more job opportunities in short and longterm too.
The ICT sector is well organized and while not without problems the government shows a great level of ambition to provide the right stimulous and make ICT a focal economic sector. With a contribution to the countries GDP of about 7,5%, ICT already plays an important role in Tunisia with a strong private sector contribution.

Many well-educated young tech talents are looking for jobs, which is an immense opportunity for foreign investors

Evaluating the information we have about the ICT sector and about the local companies we see no reason that clients from foreign markets such as France, Italy or Germany should not be interested in working with local companies or in investing in own service delivery centers in Tunisia.


You can read the full article in the Outsourcing Destination Guide Tunisia, which is available for free download at www.outsourcing-destinations.org


The author: Stephan Fricke is CEO of the independent Deutscher Outsourcing Verband (German Outsourcing Association) and of the German Process Automation Association. In this function, he works with leading organizations from buyer, provider, and consulting side and also with industry associations and government organizations, concentrating on improving market conditions for IT-services, BPO and global business services as well as for business process automation. He is a regular speaker and author on markets, their states and actors as well as the impact on economies. He is also Editor in Chief for the Outsourcing Journal focusing on shared knowledge from industry experts from Germany, Europe and other countries. He is advising companies on their strategies and activities on the German market, as well as economic support organizations on development and growth of local ICT sectors. You can connect with Stephan via LinkedIn.com.

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