Policy Research Reports
Accelerating the Progress of Tunisia Towards the Sustainable Development Goals
No.
PRR 53
Publisher
ERF
Date
December, 2024
Summary
Tunisia is at a critical juncture as it navigates a complex landscape characterized by economic, social, and environmental challenges. This report provides a comprehensive examination of Tunisia’s economic development trajectory, focusing on the country’s progress toward the Sustainable Development Goals (SDGs), the factors influencing its economic performance, and the policy recommendations needed to accelerate progress.
Tunisia’s economic growth has faced significant headwinds since the 2011 revolution. While the country experienced periods of robust growth in the early 2000s, with GDP growth peaking at over 6% annually, the post-revolution period has been characterized by a slow and uneven economic recovery. The growth rate fell to an average of 1.17% between 2011 and 2023, reflecting a combination of political instability, fiscal challenges, and structural weaknesses. Despite a modest rebound in 2021, when GDP growth reached 4.6%, the economy contracted to a meager 0.4% in 2023 due to external shocks and domestic constraints, such as the severe drought in 2023, which led to an 11% decline in agricultural production. In addition, ongoing fiscal consolidation efforts and financial pressures have further dampened the country’s economic outlook.
The report shows that Tunisia’s slow economic recovery has been exacerbated by persistent challenges such as political instability, insufficient structural reforms, and climate-related disruptions. The inability to address these challenges has hindered investor confidence and undermined policy implementation, further exacerbating socioeconomic disparities. The agricultural sector, which remains a vital component of the economy, continues to suffer from water scarcity and volatile production, highlighting the country’s vulnerability to climate change. As agriculture employs a significant proportion of the workforce and contributes to the national diet, declining production in the sector threatens food security and rural livelihoods.
Despite these difficulties, Tunisia has made notable progress in several key areas of sustainable development. Tunisia’s commitment to achieving the 2030 Agenda is reflected in its strategic adoption of the SDGs, with a particular focus on priorities such as quality education, clean water and sanitation, decent work and economic growth, reducing inequalities, and combating climate change. Tunisia ranks second in the Arab world and has made significant improvements in areas such as responsible consumption, climate action, and access to education. Initiatives to expand access to health care, empower women, and promote clean energy have contributed to this progress, although significant gaps remain in achieving broader economic inclusion and resilience.
The industrial sector has proven to be a cornerstone of Tunisia’s economy, contributing 23.3% to GDP and employing about 34% of the labor force. Export-oriented sectors, particularly textiles, chemicals and manufacturing, have shown resilience despite global challenges. However, some traditional sectors such as leather, footwear, and wood-related industries have experienced declines. The services sector, on the other hand, has emerged as a dominant force in the economy, accounting for 60.3% of GDP and playing a pivotal role in employment and value addition. Advances in the ICT sector, combined with the recovery of tourism, reflect a diversified economic base. In 2023, Tunisia welcomed 8.8 million tourists, generating revenues of TND 6.7 billion, signaling a recovery in the tourism sector that surpassed pre-pandemic levels.
Tunisia’s macroeconomic policies, while focused on recovery, face numerous challenges. The fiscal deficit remains a critical concern, with public debt projected to reach 83.7% of GDP by 2024. The country’s reliance on external financing and domestic borrowing underscores the urgency of comprehensive fiscal reforms to ensure sustainability and debt management. Similarly, the external sector has witnessed growing imbalances, driven by a widening trade deficit and declining foreign exchange reserves. Government efforts to curb imports and reduce foreign exchange outflows have led to shortages of essential goods, highlighting the need for strategic interventions to improve trade competitiveness and resilience.
The report examines the key drivers of economic development, highlighting the importance of education, health, institutional development, and infrastructure. Tunisia’s progress in education and health is evident, but persistent challenges such as gender disparities, regional inequalities, and an over-reliance on low-value services hinder further progress. Infrastructure development, particularly digital and transport networks, remains critical to improving connectivity and fostering economic growth. The analysis also identifies climate change and environmental risks as major threats to sustainable development. Investments in renewable energy, efficient irrigation systems, and climate-resilient infrastructure are essential to mitigate these risks and safeguard Tunisia’s development gains.
The report concludes with policy recommendations aimed at strengthening Tunisia’s path to sustainable development. Key among these recommendations is the need for comprehensive structural reforms to enhance competitiveness, stimulate job creation and promote social inclusion. The adoption of a “just transition” approach, with a focus on environmental sustainability and social equity, is crucial to address deep-seated inequalities and build resilience to external shocks. In addition, strategic investments in human capital, infrastructure and technological innovation will be essential to promote inclusive growth and achieve the SDGs. This comprehensive approach is critical to unlocking Tunisia’s potential and achieving long-term prosperity.
Research Fellows
Adel Ben Youssef
Professor of Economics, University Côte d'Azur