Tunisia is one of the most economically developed countries in Africa, with steady economic growth over a long period of time, but with relatively modest natural resources. The growth is based on political stability and a relatively high level of education, as well as an expanded infrastructure and a complex business sector with a significant industrial base. Liberalization of the economy after an economic crisis in the early 1980s contributed to financial stability and growth, which in turn made the country more attractive to foreign investment.
The crisis came, among other things, as a result of excessive dependence on oil revenues, aid and money transfers from Tunisians abroad. Liberalization, including privatization and deregulation, led to renewed growth, but also to increased unemployment and poverty. Proximity to European markets and trade agreements with the EU has also contributed to growth, as has the focus on tourism, which has contributed to increased employment and currency income. High unemployment, especially among young people, is a major political, social and economic challenge. Tunisia has relatively modest natural resources, and oil deposits are far less than in neighboring Algeria and Libya. From being the country’s main source of income, exports of oil from the mid-1980s declined; bypassed by textiles and agricultural products. Recovery increased in the 1990s, but domestic consumption has also increased, with limited export surplus. The deposits of calcium phosphate are significant, and Tunisia is the world’s fourth largest producer of the mineral.
Tunisia has a considerable degree of industrial travel, but a lack of raw materials and power, as well as a small national market, are an obstacle to economic development. The textile industry has a central position, also for export. The country has a viable agriculture and a large service industry, where tourism plays an important role. Production of dates, fruits and olives is important for the country’s exports.
Agriculture, forestry and fishing
Tunisia has partly good natural conditions for agriculture, and the agricultural sector is important for the country’s economy, both for employment and export earnings. In 2002, the sector accounted for approx. 12% of GNI and employed approx. 22% of the working population. Around two-thirds of the country’s land is suitable for agriculture; well a third is cultivated, other areas are used for animal husbandry. The former French colonial properties from the colonial period were nationalized, and in the 1960s an attempt was made to transform them into cooperatives. This failed, and agriculture was partly run on large, modern and partly on small, traditionally run farms.
Particularly wheat, barley, olives, citrus fruits, figs, dates, tomatoes and grapes are grown. Wine and grains are the most important products in the fertile valleys and plains of the north. In northeast Tunisia with the Cap Bon Peninsula, citrus fruits and vegetables are grown, and along the east coast olive oil is grown; dates are grown in the oases in the south. The crops vary widely, depending on the rainfall; only a small proportion of the animal area is irrigated artificially. A larger water development program was initiated in the 1980s, with the construction of several ponds for irrigation and flood control. The groundwater reserves are already heavily exploited, with fear of continued water shortages. Several agricultural products are exported, especially to the EU. Of particular importance is olive oil, of which Tunisia is the world’s fourth largest producer; olive oil accounts for about 50% of agricultural exports, and approx. 5% of total exports.
Only around 4% of Tunisia is forested, but some forestry is used, essentially for fuel.
The fishing industry has been subject to increased efforts by the authorities, and an important export commodity. In particular, fishing has been conducted mainly on the east coast, but overfishing in the Gulf of Gabes has led to increased activity further north. The main fish species are sardines. The fishing industry is centered around Sfax.
Mining and energy
Tunisia has high deposits of calcium phosphate in the central parts of the country and is the world’s fourth largest producer. Until the 1980s, most of the extraction was exported without machining, after which local utilization was initiated, especially in the production of mineral fertilizers. Iron ore is extracted from two mines, the largest of which is at Jerissa; production has been declining since independence. Lead is mined in the north, zinc in the northwest.
Oil was found in the al-Bormah field, all the way south in the country, in 1964, and the second field, at Douleb further north, came into production in 1968, two more in 1972. Major offshore discoveries have also been made in the Gulf of Gabes; with higher prices, several smaller fields were later put into operation. A territorial discrepancy with Libya in the Gulf of Gabes was appended in 1982. In the 1970s and until the mid-1980s, oil became Tunisia’s major source of export revenue. In 2003, the country’s proven oil reserves were estimated at 500 million barrels; production reached a peak of 5.6 million tonnes in 1980. The country also has deposits of natural gas, estimated at approx. 100 000 m 3. Until 1995, production came essentially from the al-Bormah field; then also from offshore deposits. A gas pipeline from Algeria to Italy passes through Tunisia; a cable from Libya to Tunisia is planned. Tunisia was a member of OAPEC, 1982–86.
Tunisia’s production of electrical energy is essentially based on heat power plants that use natural gas as an energy source. Installed capacity in 2016 was 4.8 GW. An effort is now being made to supplement fossil energy with other energy sources such as solar and wind energy. In 2016, renewable energy contributed about 5 percent of power generation. The country is also in talks with Russia to build a nuclear power plant. The need to increase power generation is great. Between 1990 and 2016, the consumption of electrical energy increased by 4.5 percent per year.
Tunisia has a broadly composed industrial sector, which is largely based on the processing of the country’s minerals, especially phosphate and oil, and agricultural products. Heavy industry has been developed at Menzel-Bourguiba, with steel production, chemical industry in Tunis and Sfax – otherwise cellulose, sugar and other food industries, as well as a variety of consumer goods. Associated with the oil business is a refinery at Bizerte. Textile production is the most important part of the industry, accounting for over 40% of total exports, and employs over a quarter of a million workers. A lot of footwear and leather goods are also produced for export. From the 1980s, several large companies, among others. cement factories, privatized. Since the 1990s, considerable investments have been made in, among other things, metallurgical and mechanical industry, and it is focused on the development of the technology sector.
Tunisia has a deficit on the trade balance with foreign countries, which is partly covered by tourism revenues, partly by loans and subsidies, especially from the EU, and money transfers from Tunisians abroad. France is the largest aid provider. According to Countryaah, petroleum and petroleum products were the most important export goods until the mid-1980s, followed by textiles and clothing. Other export products are phosphate, olive oil, wine and fruit etc. The main trading market for both export and import is the EU, especially France, Germany and Italy. Tunisia signed a free trade agreement with the EU in 1995, and in 1998 signed a new, comprehensive trade agreement with the EU. Tunisia also participates in economic regional cooperation in Maghreb, through l’Union du Maghreb Arabe, established in 1989.
Transport and Communications
Tunisia has a relatively well-developed transport system, with widespread road networks and railways, from the colonial era, which has subsequently been modernized and upgraded. The road network consists of around 22 490 km of road, most of which with a fixed tire. The railway network is 2190 km and connects all the major cities in the northern part of the country. Main port cities are Tunis and on the east coast of Sousse, Sfax and Gabès. La Skhirra (at the Gulf of Gabes) is the shipping port for petroleum from Algeria. The most important of several international airports is Tunis-Carthage.