Monday, October 14, 2019

AfricanManager

2788 POSTS 0 COMMENTS

by -
0 96

Taoufik Rajhi, the “Mr. Great reforms” of the Youssef Chahed’s government is also one of the main negotiators of Tunisia with the IMF, which he now knows all the mysteries and strings.

Since these reforms are directly linked to the very structure of the state budget, this minister speaks of it easily. He had started in an office at the Kasbah, he finished [Editor’s note: We’ll see in 2020!] In a building in the “Zone Urbaine Nord” in Tunis.

He is giving to AfricanManager his opinion on the draft State budget o for 2020. That budget was prepared by an outgoing government for a government that could take office after the adoption of the draft budget by the new ARP which could itself understand nothing, for the vast majority of its members are newcomers.

That budget, moreover, would be somehow imposed on the team of the next Prime Minister, with which he must do, even if it could not match his own program or that of his political party.

Do you consider feasible the draft State budget 2020?

The first reflection to be made is whether there are squeezable expenditures in this budget, which the next government could save to reduce the need for funding, especially foreign one. This is the fundamental question. The answer is that you have four sections of expenditure, essential in the budget.

The first is that of wages and salaries of state agents. It is a rigid item that eats a little more than 19 billion TND. It is a huge volume compared to actual expenses, excluding compensation and debt service. They are approximately 35 billion TND, which represent some 50% of the expenditure section.

Commitments have also been signed for further increases, and there is no reason to deny these commitments.

The other budget section is that of compensation. However, there is currently no serious reform to reduce compensation.

There are two ways to do it. The first is through adjustment in the prices of hydrocarbons, energy and prices of raw materials or transport. There is no policy in this sense today. The second is through direct transfer policies, reducing waste and fraud and diversion by parties that do not need compensation. We have the strategies and the programs and the action plans to do it. But nothing has been started yet.

The third section, equally rigid, is that of repayment of debt, interest and principal. And as far as I know, there is no possibility today, of wanting to deny the country’s debt, and it would be dangerous for Tunisia to do so.

It then remains the title II section, that of investment, and it is just as rigid. This is especially true since this kind of expenditure has been stagnating since the Revolution, between 5.5 and 6 billion dinars, even though the rate of execution of these investment expenditures has increased over the past three years. Normally, and considering the evolution of inflation since 2012, we should allocate it 10 billion TND. The section, as it is now, is equally incompressible, as it involves projects in progress, payments in progress, and 20 or 30% consisting of new projects.

The difficulty, therefore, in this draft budget 2020, is that there is no compressible section, because it amounts to a choice of society, wage policy, compensation policy, and the rest, the result of a history of choice of financing of budget deficit by budget support and external indebtedness made since the Revolution.

Is the budget deficit of 3% feasible?

For any purpose, there is always a risk of exceeding it. The art is how to juggle revenue and expenses to get there. The risk therefore exists. In particular, it is linked to the evolution of the exchange rate, an exogenous element that is not controlled, and which has a direct negative impact on the repayment of the debt, the budget deficit and the amount of compensation.

There is also the risk of the oil barrel price which Tunisia does not control either. We certainly tried to set up a system of Hedging which certainly succeeded, but partially because of the “hedged” amount that was low.

There is also the risk of the social peace process in the country, which remains linked to the negotiations for wage increases that have become systematic in Tunisia.

It should be remembered that the payroll was at 6.3 billion TND in 2010 and currently exceeds 19 billion TND, multiplying by 300% in 8 years.

Do you think that the 2020 budget can be achieved, as it is, without the foreign financial aid and the donors who have been financing Tunisia since 2016? In other words, can another government do better without the IMF and its Followers?

All the Tunisian post-revolution governments wanted to fight external indebtedness and have all put this in their respective agendas. No government has accepted an increase in external debt.

There are actually two ways to get there. Either have the courage to make cuts, which can only be painful, in some budget sections and therefore move towards a policy of austerity, so to at least remain at the same level of 2019 in terms of budget of the State.

To do this, we must not touch investment, which is a growth engine, and which is already at its lowest. Or, continue in the same budget logic, adopted since 2012, juggle and deal with all the difficulties and find funding where we can.

But it is not in the internal market that we will find it. It does not have the capacity, for sums beyond 1 Billion or 3 Billion TND. Beyond that, you have to go and get the money elsewhere.

Donors first, because with very favorable conditions around 2% and with deadlines that can extend to over 20 and even 40 years.

It will then be necessary to reduce as much as possible access to the international financial market, which has become very expensive.

All this remains impossible, unachievable, without the agreement with the IMF and its green light, meaning that the country is doing the necessary reforms, clean up its budget, and deal with the deficit of its balance of payments.

It is only on these conditions that the lenders will give money and you will ensure both the sustainability of your debt and your repayment capacity.

Is it possible for any future Tunisian government to indefinitely stop negotiations with the IMF and to do without it?

Let us recall, first, that Tunisia is under IMF program, until April 2020. To ask the suspension of this program would mean to cut the external finances to Tunisia, all the finances, because the IMF is in a way the country’s rating agency with donors. It would also put the funding of the budget at serious risk.

Do you consider possible another economic and financial policy in Tunisia, and in the current situation? Is there another choice, other than austerity in this case?

What I am saying is that we are now facing irreducible sections, born of economic and social policies, themselves determined by the economic, political and social conditions. If you change these policies and find a way to compress some of these sections, you may no longer need external financing.

To compress is also to find internal balances, which reduce expenses, which preserve the social peace for the preservation of which Tunisia has paid the high price.

It should be remembered that last year Tunisia suffered two general strikes, after which the government finally gave in on wage increases to preserve this social peace.

Right now, what is most needed, I sincerely believe, is moving toward reforms that save money. Otherwise, I do not see any other solution.

The outcome of the elections, with the emergence of another political regime, a new president and a new head of government carrying another socio-economic project, can it change something?

Whatever the outcome of two elections, presidential and legislative, populist, left-wing, conservative, right-wing or otherwise, we will not be able to save the budget otherwise than by negotiation with international bodies.

Otherwise, it is pure political and electoral propaganda. The economic reality is different. And I think everyone will eventually accept that reality and try to negotiate, with the IMF as well as with the World Bank or other donors.

by -
0 29

Noureddine Salmi, Minister of Infrastructure, Housing and Territorial Development said that many major projects (rehabilitation of infrastructure, highways, social housing) are being implemented in several regions of the country.

In an interview with AfricanManager, he assured that efforts are ongoing to combat the phenomenon of unpermitted construction.

Interview:

What is the progress rate of the various projects, and what are the other projects planned by your department?

We are at an advanced stage on some projects. For example, at the Gabès-Ras Jedir highway project, work is still going on and this project will start operating in June 2020.

Regarding the Tunis-Jelma highway, work is also underway. Moreover, studies have been conducted for other highways such as the Tunis-Kef highway and Jendouba-Algerian borders.

The government has failed to end the anarchic construction that now accounts for 37%?

It is true that the phenomenon of anarchic construction has increased in the different governorates, but we are working hard and we are preparing decisions likely to eradicate unpermitted construction. Indeed, a bill has been drafted and will be presented during the Conference of Arab Housing Ministers o be organized from next year and this in collaboration with the Arab League.

I would like to point out that for a year now, the Code of Local Authorities has not taken any measures aimed at combating this phenomenon, so in collaboration with the Prime Ministry and the Administrative Court and the Ministry of the Infrastructure, Housing and Spatial Planning, 77 decisions will be issued for the rehabilitation of the territory.

Is the list of allocation of social housing units to beneficiaries ready?

In the context of the specific social housing program, many homes will be given to their beneficiaries. We are in the process of developing the final list of people involved in these dwellings.

I would like to say that the Ministry of Infrastructure, Housing and Spatial Planning is not concerned by the preparation of this list because it is prepared at the regional level by a committee chaired by the governors , based on a series of criteria respecting Tunisian law.

In this context, I call on all governors to accelerate efforts to finalize that list. The number of applicants for social housing has reached 200,000 cases.

What can you tell us about the Memorandum of Understanding that was signed between the Ministry of Infrastructure and a Korean company?

This is a memorandum of understanding on the implementation of a digitization project of the land heritage and will be launched from the year 2020.

Estimated at a total cost of $ 60 million, the project aims to launch a digital and smart system for the management of land information, given the importance of this project in the development process.

It is also about putting technology at the service of modern urban planning in order to concretize infrastructure projects in Tunisia and to prepare the ground for the creation of smart cities.

    by -
    0 29

    The trade balance deficit stood at 14,848.1 million dinars (MD) in the 1st nine months of 2019 against 14,183.2 MD in the same period of 2018, according to the cyclical review of the National Institute of Statistics (INS) on foreign trade at current prices (September 2019).

    The coverage rate edged up 1.5 points compared with the first nine months of 2018, i.e. 69% against 67.5%.

    Not counting energy, the trade balance deficit is 9201.2MD. The energy balance deficit stands at 5646.9 MD (38% of the total deficit) against 4683.7 MD during the same period in 2018.

    Imports of energy products rose by 24.3% under the effect of the increase in purchases of natural gas (2934.3 MD against 1768.6MD).

    Overall exports grew 12% compared to +19.8% in the same period of 2018, according to the INS External Trade Note at current prices (September 2019). They reached 33,008.4 MD against 29,481.7 MD during the first nine months of the previous year.

    Imports rose by 9.6% against +21% during the same period of 2018: imports reached 47,856.5 MD against 43,664.8 MD during the first nine months of the year 2018.

    Trade by regime shows an increase in exports under the offshore regime of 13.6% against + 16.9% during the same period of 2018.

    Under the offshore regime, imports increased by 10.9% against + 23.2% during the same period of 2018.

    Under the general regime, exports are up 7.6% against + 28.4% during the same period of 2018.

    Imports increased by 9% against + 20% during the same period of 2018.

    The sectors affected by the rise in exports are energy 35.1%, mining, phosphates and derivatives 27.1%, mechanical and electrical industries 15.9%, textiles and clothing and leather 8.3% and other manufacturing industries by 19.1%.

    The trade balance witnessed a surplus, mainly with France by 3058.4 MD, Libya 982.1 MD and Morocco 319.1 MD.

    It witnessed a deficit of 14,848.1 MD following the deficit recorded with certain countries, such as China (-4,440.2 MD), Algeria (-2,432.8 MD), Italy (-2,082.3 MD), Turkey (-1,808.9 MD) and Russia (-1,103.6 MD).

      by -
      0 35

      State-owned company “Les Ciments de Bizerte” has increased its losses in the first half of the current year, penalized by a growth in the cost of sales faster than income

      The cement company posted a net loss of 15.7 million dinars at the end of the first half, compared to a deficit of 12.7 million a year earlier, up 3 million dinars.

      The company ended 2018 with a net loss of 32.9 million dinars.

      In the first six months of the year, Les Ciments de Bizerte achieved a turnover of 41.9 million dinars, against 39.9 million a year earlier, up 5%.

      On the other hand, the cost of sales went from 35.9 million dinars to 41.3 million between June 2018 and June 2019, posting an increase of 15%.

      Therefore, the gross margin fell by 84% to 608 thousand dinars, against 3.9 million dinars in the first half of last year.

      Taking into account 9.8 million dinars from other operating expenses and 4.5 million administrative expenses, the operating profit of the cement producer shows a deficit of 12.1 million dinars against -5.7 million a year earlier.

        by -
        0 41

        Tourist receipts reached more than 4.4 billion dinars until September 30, 2019, posting a 43.3% increase, compared to the same period of 2018, according to statistics released by the Ministry of Tourism and Handicrafts on Wednesday.

        In foreign currency, the increase in tourism receipts is less important. Tourism revenues amounted to €1.3 billion, up 31.6% and $1.5 billion, up 23.6%.

        Tourist arrivals amounted to 7.2 million visitors (+ 14.8%), until September 30, 2019, including more than 2.3 million European tourists.

        Some 3.5 million Maghreb tourists visited Tunisia during this period, including 2 million Algerians, 1.4 million Libyans and 66,000 other Maghrebis.

        Next are Tunisians living abroad (1.1 million tourists), Chinese (22.1 thousand tourists) and other nationalities (143 thousand tourists).

        Overall overnight stays reached 24 million in the first 9 months of 2019, up 12%.

          by -
          0 31

          Tunisia held on to the 87th spot in the World Economic Forum’s Global Competitiveness Report 2019 with an improved score of 56. 4 up from 55.6 in 2018 (+0.8), it was announced at a press conference Wednesday in Tunis.

          Tunisia is ranked 9th in the MENA region (Middle East and North Africa) by the report which maps the competitiveness landscape of 141 economies through 103 indicators organized into 12 themes, including infrastructure, education, macroeconomic stability .

          Tunisia is ranked 73rd in the pillar of institutions, 85th in infrastructure, 83rd in ICT adoption, 124th in macroeconomic stability, 49th in the pillar of health and 84th in education and skills.

          It also took the 92nd spot in the product market and is ranked 133rd in the labor market, 94th in the financial system, 71st in the market size, 74th in business dynamism and 92nd in innovation capacity.

          The findings of the report are “a source of concern,” said Executive Director of the Arab Institute of Business Managers (French: IACE) Majdi Hassen.

          Improvement was seen in 29 out of 103 key indicators. The country poorly performed on 60 indicators and showed stagnation in 9 others.

            by -
            0 48

            “Carthage Cement’s Board of Directors will propose a capital increase of 223,774,733 TND, which will bring the capital to 395,909,146 TND”, said Adel Grar, CEO of Al Karama Holding, stating that this proposal will be discussed at the Extraordinary General Assembly due on Friday, October 11.

            Grar said the issue price of the share will be 1.200 TND (1 D nominal and 0.200 D share premium).

            “This capital increase is part of the financial restructuring plan, concluded in agreement with the BCT, to ensure the rescue of the company, through, among other things, a better return on the cement plant and a control of its debts”, he said.

            In fact, this plan provides for a global arrangement with the banks to lighten the outstanding amount of the company, through the partial repayment of bank debts and rescheduling of debts (360 MD) over 12 years including 2 years of grace.

            In parallel with the implementation of this restructuring plan, the process of selling the company, which failed, at the end of 2018, for lack of serious offers, will be relaunched again in November 2019.

            Tenders for this sale will be launched during the first quarter of 2020.

            Tunisia held on to the 87th spot in the World Economic Forum’s Global Competitiveness Report 2019 with an improved score of 56. 4 up from 55.6 in 2018 (+0.8), it was announced at a press conference Wednesday in Tunis.

              by -
              0 35

              The company Euro-cycles opens the ball of quarterly publications of the activity indicators of listed companies.

              The bike manufacturer announces having achieved a turnover up 27% to 69.2 million dinars, at the end of last September

              The volume of production, meanwhile, increased by 10% compared to the third quarter of last year to reach 271,759 bicycles, against 247,082 units as of September 30, 2018.

              The Turnover in the 3rd quarter of 2019 showed a 52% increase in figures and 20% in volume compared to the 3rd quarter of the year 2018.

              On September 30, 2019, the investments by Euro-Cycles were of the order of 776,340 dinars.

              In addition, the company’s bank commitments amounted to 26.3 million dinars as of September 30, 2019, posting an increase of 21% compared to September 30, 2019.

                by -
                0 39

                The Export Promotion Centre (CEPEX), member of the ‘Think Africa’ export platform, said Wednesday it is organizing a market prospecting mission to Nairobi, Kenya from October 13 to 21.

                CEPEX is visiting Kenya as part of a project called “Promotion of employment-intensive export activities in new markets in Africa” (French: PEMA) launched by the German Agency for International Cooperation (GIZ).

                The mission focuses on building up a network between Think Africa members, institutional investors and business communities in Kenya and CEPEX’s office in Nairobi. The ultimate goal is to pave the way for a Roadshow in Tunisia on business opportunities between the two countries.

                According to CEPEX, the PEMA project seeks to ease access to new export markets in Africa by consolidating the offer of public-private export promotion networks.

                Kenya, which is the 100th destination of Tunisia’s goods with an export share of 0.01% by end August 2019 and the country’s 86th supplier, has a GDP of 78 billion dollars (€63 billion).

                Created in 2017, “Think Africa” Platform aims to show Tunisia’s businesses the market opportunities available to them in sub-Saharan Africa. It brings together the CEPEX, chambers of commerce, business associations and specialized consulting firms, along with the Ministry of Trade and the Ministry of Foreign Affairs.

                  by -
                  0 44

                  Radisson Hotel Group has announced the signing of the Radisson Hotel Tunis.

                  It will be the first Radisson branded hotel in the city of Tunis and the Group’s fourth hotel in the country, it added.

                  The new-build hotel will feature 117 rooms, comprising standard rooms and suites.

                  The meetings and events facilities will consist of five meeting rooms and a conference space of 358sqm.

                  The new Radisson Hotel Tunis, scheduled to open in Q1 2023, will be located in Tunis North, said the Group.

                  Social Networks

                  INTERVIEW

                  0 29
                  Noureddine Salmi, Minister of Infrastructure, Housing and Territorial Development said that many major projects (rehabilitation of infrastructure, highways, social housing) are being implemented in...

                  AFRICA

                  0 733
                  African Health Ministers have pledged to implement key strategies for ending cholera outbreaks in the African region by 2030. Forty-seven African countries adopted the Regional...