How Tunisia is using public-private partnerships to create new opportunities

Public-private partnerships (PPPs) are a critical feature of strategic infrastructure planning worldwide, allowing countries to use private capital to support new projects.

In this article, we use Enabling Better Infrastructure (EBI) guidance to show how Tunisia is boosting development by factoring PPPs into national infrastructure planning.

Illustrating the impact of these partnerships demonstrates their value for meeting long-term infrastructure needs and creates evidence for learning and sharing across countries.

The Tunisian context

Over the last t30 years, Tunisia has made significant investments in infrastructure to provide basic services. This has helped create jobs and reduce social gaps.

As a result, poverty rates in both urban and rural areas have declined significantly. Between 2000 and 2015, the national poverty rate fell from 25% to 15%.

While infrastructure investment has improved lives throughout Tunisia, its relative quality has decreased due to its management by state-owned enterprises (SOEs).

While SOEs can drive economic growth, their presence in Tunisia doesn’t align with international best practice.

Many of these enterprises are characterised by “weak transparency, accounting, reporting, budgeting, ownership, executive boards, and efficiency” (EBRD, 2017).

They also lack external oversight. No clear links have been found between funding and performance, showing signs of corruption.

State-owned enterprises: a reflection of autocracy

The issues with Tunisia’s state-owned enterprises are rooted in its autocratic history.

Before the Arab Spring, Ben Ali’s government tightly restricted political parties and free expression. The defining component of his regime was corruption.

Following the uprisings, Tunisia enjoyed a period of change. A democratic government was established alongside fair and regular elections. Female representation in government also rose.

In 2020, Tunisia had the highest rate of female parliamentary members in the world.

In recent years, however, political corruption has resurfaced at the hands of current president, Kais Saied.

In April 2022, Saied seized control of the electoral commission and dissolved the Supreme Judicial Council, demonstrating the regime’s aim to assert full control of Tunisia.

Driving change through public-private partnerships

While the government’s use of state-owned enterprises has limited Tunisia’s infrastructure development, its move towards creating an enabling environment for public-private partnerships has reignited hope for change.

In 2018, a public-private partnerships conference discussed projects that PPPs could help to implement.

The aim was to boost national and foreign private investment in infrastructure to accelerate growth and ease the burden on public finances.

International experts, senior government officials and key figures from the investment, advisory and financial sectors came together to share their knowledge.

Showing the impact of public-private partnerships

Earlier this year, the Suez group joined forces with Tunisia’s state-owned Onas office to improve water infrastructure in a southern region serving almost a million people.

“This 10-year concession contract, worth a total of 200 million euros, will be financed by the World Bank for the rehabilitation and extension of the infrastructures and by the Tunisian state for their operation and maintenance” (Africa News, 2023).

This public-private partnership indicates a step in the right direction toward sustainable development.

It has huge potential to enhance lives in Tunisia’s poorest region and could make the country a “reference in terms of sanitation management on the African continent” (Africa News, 2023).

Reflection

The Tunisian government’s use of state-owned enterprises to dominate the infrastructure sector shows that SOEs don’t always lead to economic growth and better infrastructure.

Rather, their prevalence has resulted in economic downturn.

To optimise infrastructure development, Tunisia needs to reassess the function of state-owned enterprises. This will play a key role in strengthening its enabling environment.

Meanwhile, public-private partnerships show where outside stakeholders can help ensure steady improvements in infrastructure by setting new projects in motion through private financing.

In future, Tunisia needs to work towards improving its infrastructure governance. It needs to focus on the contributions of all stakeholders across government, the private sector, and the public sector.

This is the key to unlocking sustainable development.