Business Day (Johannesburg)

4 May 2009

Africa: A Key Economic Bridge Between Africa And Europe

opinion

Johannesburg — AN EVER-strengthening Tunisian economy is helping the country become a key business hub for the North African region. In parallel with long-established trans-Mediterranean economic linkages with the EU, it is becoming a key economic bridge between North Africa and Europe in a broader Mediterranean context.

Meaningful trade across the Sahara from sub-Saharan African countries could see Tunisia also becoming Africa's alternative economic gateway to the Mediterranean region.

The new situation echoes days gone by, when the Carthaginians were a major trading power that challenged and almost conquered Rome. Carthage -- the modern city of Tunis -- was also a major import-export gateway for the trans-Saharan trade routes, with Timbuktu and other then bustling African business centres. Close proximity to Italy facilitated ivory, gold and other riches from Africa being quickly transported into the heart of Europe.

The new Tunisian economic growth and its strategic targeting have been driven by strong government initiative and leadership, but it has been in collaboration with an energetic local business sector supported by a strong middle class. A key emphasis has been capacity building to take advantage of opportunities.

Tunisia has used its relationship with the EU to drive its economy, and 1995 saw the first of the MEDA (Mediterranean Economic Development Association) countries sign an association agreement to dismantle tariffs, a process that by last year had resulted in 0% customs tariff on EU industrial imports to Tunisia. By 2010 it will have become a member of a free trade zone with the EU as provided for in the 1995 association agreement.

Tunisia is an active proponent of regional initiatives in North Africa and the Mediterranean for economic development in parallel with strengthened regional peace and security. This often overlaps with EU relations in such contexts as the MEDA cooperation process, the Neighbourhood Programme, and the recent Mediterranean Union concept.

In support of a diversified integrated regional economy Tunisia has placed special emphasis on the Agidir Process, aiming for a full customs union with such countries as Egypt and Morocco, which would allow members cumulation of rules of origin and preferential access to the EU market. Cumulation allows more than one country to jointly comply with the applicable rules of origin of a product. Last year Tunisia and Morocco launched an inter-linking maritime transport route with improved multi-modal cost-cutting systems. The 2007-2013 Regional Transport Action Plan, approved during a recent Euro-Med meeting, aims to establish an integrated Euro-Mediterranean transport system with Tunis a key hub.

Tunisia has no large oil or gas resources like its neighbours, and apart from relatively limited agricultural production has largely relied on skilled human resources, in conjunction with geo-strategic factors, as key economic supports. The services sector is increasingly important, while Tunisia has one of the most sophisticated tourism industries in the Mediterranean and an increasingly important movie-making industry.

Tunisia recently identified four industrial sectors as new priorities and these are fast becoming platforms for further diversified growth, with each already exporting goods worth more than € 1bn, largely into the EU. The four sectors are aeronautical and automotive components; TIC/off-shoring; textile, leather and shoes; and agro-food.

In recent years Tunisia has focused on short-orders in fashion and other sectors geared for EU retail networks, and the successes achieved have now spread to the automobile and electrical engineering sectors. The confidence of investing companies in the reliability and skills of the Tunisian economy was especially demonstrated last year, when Airbus established its first plant outside the EU for the production of components in Tunisia.

New investments have targeted the upgrade of Tunisian infrastructure and financial services in support of the vision of a growing economic hub. One of the most dramatic of such projects is the Dubai-driven construction of a new port and related urban area on the outskirts of Tunis that will be something like a small Dubai. On the financial front the fact that the African Development Bank has chosen Tunis as its current location helps underwrite its reputation for stability and economic leadership.

The actions involved in growing the Tunisian economy are of some relevance for South African business and deserve attention as much as the results that are materialising. This is not only because North Africa is a growing economic competitor on many fronts, but because much can be adapted to local circumstances.

Dr John Maré is an adviser on international public affairs and diplomacy for multinational companies, governments and international organisations. He is a senior adviser in the AEAC consultancy network focusing on EU/African business issues.

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