The Agency for the Promotion of Industry and Innovation in Tunisia has confirmed that investment plans in the Tunisian industrial sector declined by 35 percent during the first quarter of this year.
Investments in the services sector also recorded a 50 percent drop compared to the same period last year.
These negative results occurred despite efforts by the High Investment Council and the Tunisian Investment Authority (TIA) to come up with the first financial incentives and grants for large investment projects worth more than 15 million Tunisian dinars (about six million dollars).
The results also appeared after the adoption of the new investment law in April 1, 2017.
The Tunisian institutions in the investment and business climate are seeking to review the requirements for improving the investment climate in Tunisia, implementing urgent reforms, setting swiftly the necessary infrastructure for the completion of projects in industrial areas, easing administrative procedures and reducing red tape.
"The new laws on the creation of an investment climate have not contributed as needed to attracting foreign and domestic investments," said Tunisian Economic and Financial Expert Saad Boumakhla, in this regard.
He expected the TIA to deliver a report to the prime minister this month on the essential proposals to improve the business climate in Tunisia and promote investments.
Notably, the finance law for the current year included a set of measures that relied mainly on incentives, financial grants and tax exemptions, which had limited outcomes in the past.
According to a number of economic and finance experts, these measures do not encourage investment and are considered an extra burden on the state treasury.
Data provided by the Ministry of Development, Investment and International Cooperation highlighted that the total cost of fiscal and financial incentives provided for Tunisian institutions during the period between 2007 and 2014 was estimated at more than 11 billion Tunisian dinars, an annual average of about 1.4 billion dinars, 23 percent in the form of financial incentives and 77 percent as tax incentives.
This represents about 5.5 percent of the total state budget and more than two percent of gross domestic product.
