The World Bank in Tunisia

The Tunisian government is prioritizing mitigating the impacts of climate change, in particular the energy transition and the water question, alongside with fostering human development and achieving a stronger, more sustainable economy.

Tunisia's economic performance slowed down after 2011, which was exacerbated by the COVID-19 pandemic in 2020. Gross domestic product (GDP) growth thus fell to 1.7 percent on average between 2011 and 2019, down from 3.5 percent between 2000 and 2011. The sharp drop in productivity growth can be attributed to overly stringent economic regulations, a decrease in trade orientation, and limited investment and innovation.

The COVID-19 pandemic, the war in Ukraine, and the recent intensification of the drought have exacerbated socio-economic vulnerabilities, slowing down economic growth. Tunisia's gross domestic product (GDP) declined by 1.5 percent in real terms between 2019 and 2023. The slow recovery has been hindered by the severe drought that hit Tunisia in 2023, resulting in zero economic growth in real terms, compared to a growth rate of 2.4 percent in 2022.The increased tourism receipts and remittances from Tunisians living abroad, as well as lower trade deficit moderated the current account deficit in 2023, easing external financing pressure.

Inflation has moderated since February 2023 (10.4 percent) to 6.7 percent in August 2024 due to lower global prices and weak domestic demand. Yet, inflation is still higher than in previous years, particularly for food (8.5 percent), as the drought and the reduction in imports have reduced the supply in domestic food markets.

Last Updated: Sep 20, 2024

The Country Partnership Framework (CPF) for Tunisia for FY2023–2027 lays out the World Bank's strategy in the country since June 2023. This CPF aligns with Tunisia's 2023-25 National Development Plan development priorities and the "Note d'Orientation Tunisie 2035" vision. Informed by the Systematic Country Diagnostic (SCD) and the Country Climate and Development Report (CCDR), the CPF aims to transition Tunisia to faster and more inclusive growth through three high-level outcomes:

1. Creating quality jobs in the private sector.
2. Strengthening human capital.
3. Enhancing climate resilience and reducing carbon emissions.

The World Bank in Tunisia is supporting the Government in advancing these priorities through multiple programs, with an immediate focus on energy transition, water management, and human capital. Furthermore, the CPF aims to integrate two cross-cutting themes —gender and social accountability, participation, and trust— across programs. In addition to lending, the CPF lays out an ambitious agenda for advisory work and technical assistance.

The CCDR, launched in November 2023 in the run-up to COP28, provides a wide range of measures to tackle substantial climate challenges, encompassing water scarcity, rising sea levels, floods, and reliance on fossil fuel imports. The CCDR, aligned with national climate transition strategies, aims to mitigate climate impact while fostering economic recovery and employment opportunities by providing actionable recommendations for adaptation and decarbonization.

Last Updated: Sep 20, 2024

The World Bank primarily supports Tunisia's plans to promote renewable energies, strengthen human capital and social resilience, and enhance water management.

Current projects include:

• Tunisia-Italy Electricity Integration and Renewable Energy Ecosystem: The World Bank has provided $268 million in financing to support the Tunisia-Italy interconnector (ELMED) project that will link energy grids between Tunisia and Europe and support renewable energy trade essential to Tunisia's sustainable development and climate change strategy. The landmark project strengthens the World Bank's longstanding partnership with the Tunisian government in the energy sector while positioning the country as a regional hub for renewable energy by connecting Tunisia's power grid to the much more extensive European network through a 600-megawatt undersea cable. The ELMED project is also supported by the Government of Italy, the European Union, the European Bank for Reconstruction and Development, the European Investment Bank, and the German Development Bank (KfW). Additional funding includes $25 million of concessional financing from the Green Climate Fund mobilized through the Sustainable Renewables Risk Mitigation Initiative.
• The Irrigated Agriculture Intensification Project (also known as Projet d'Intensification de l'Agriculture Irriguée en Tunisie, PIAIT) aims to enhance the reliability and efficiency of the irrigation and drainage services in public irrigation schemes in the North of Tunisia. The project addresses challenges commonly observed in public irrigation schemes, such as low added value, limited cost recovery for water services, and insufficient operation and maintenance, which result in lower service levels. The project operates on three key fronts: (i) improving service quality through rehabilitation of infrastructure, (ii) ensuring Operation and Maintenance cost recovery through a strengthened institutional framework, and (iii) supporting the farmers in improving agricultural value addition through improved productivity and market access. The project is improving services over 24,000 ha to benefit 2,600 farmers.
• The Tertiary Education for Employability Project (also known as Projet de modernisation de l’Enseignement Supérieur en soutien à l’Employabilité des diplômés - PromESsE), has made substantial progress towards improving tertiary education student employability and strengthening higher education management. With two main components—employability enhancement and management strengthening—the project has benefited over 17,000 students through certifications, new degree courses, and career and certification centers. It has also established quality committees, achieved international accreditations for four medical faculties and engineering schools, and supported improving Tunisian universities in global rankings. Key achievements include creating over 40 industry-linked degree programs, implementing over 60 graduate tracer studies, and launching performance-based funding for five public universities.
• The Strengthening Foundations for Learning Project (PREFAT) aims to improve public and primary school learning conditions and increase access to public preschool education. PREFAT aligns with national education strategies supporting preschool universalization and equitable access to quality education. To date, PREFAT has supported access to pre-primary and primary education in Tunisia by constructing and equipping 72 preschool classrooms and rehabilitating 64 primary schools in 31 districts, benefitting over 8,000 students. The project supports teacher professional development, with at least 20,000 teachers, 2,000 school directors, 800 pedagogical assistants, and 600 inspectors benefitting from professional development programs, including specific modules focused on pedagogy and teaching practices and fundamental modules such as Mathematics, Science, and Languages. The project has implemented learning assessments to identify knowledge gaps and improve instruction and learning, including the first Early Grade Reading Assessment (EGRA) in 2021 and the Early Grade Mathematics Assessment (EGMA) in 2024.
• The World Bank is supporting Tunisia's social protection system through the AMEN Social Program, which, as of December 2023, has reached over 333,000 vulnerable households (more than 10% of the population) with monthly cash transfers and more than 620,000 low-income households with free and subsidized healthcare services. Of the households receiving Permanent Cash Transfers, 54% are headed by women. During the COVID-19 pandemic, the program efficiently distributed emergency cash transfers to approximately 900,000 households. Leveraging this adaptive social registry and strong delivery system, the AMEN program expanded its coverage recently to include family allowances for children under six years old, benefiting almost 150,000 children. The project has prioritized digital transformation, with 44.4% of cash transfers now digitalized and over 76% of women beneficiaries receiving payments digitally.
• The Emergency Food Security Response Project has helped the country cope with the impact of four consecutive years of drought by streamlining wheat imports for human consumption and supporting small-scale producers by providing barley for milk production and climate-resistant seeds for wheat producers. An earlier parent program had helped to mitigate the effects of the war in Ukraine on food security and assist the country in overcoming financial market access difficulties and rising global prices. The project quickly enabled Tunisia to purchase 160,000 tons of soft wheat and 61,500 tons of barley.
• Since 2020, the World Bank has invested over US$120 million in Tunisia's health sector, marking its first major engagement in the country's healthcare. This partnership, initiated in response to the COVID-19 crisis, enabled the rapid mobilization of essential personal protective equipment (PPE) for frontline workers and the efficient distribution of medical oxygen to 118 public medical centers, significantly enhancing the capacity of intensive care units and emergency departments. The collaboration also facilitated the procurement and deployment of over six million vaccine doses, contributing to administering approximately 13.2 million doses and strengthening national immunity. The World Bank supported the development of the eVax digital system for vaccine appointments and certificates. As the pandemic subsided, the focus shifted to fortifying the healthcare system's resilience against future shocks, including investments in clinical, emergency, and surgical care, and expanding infrastructure for chronic disease management and pandemic preparedness.
• The Tunisia Innovative Startups and SMEs Project supports the government's Startup Tunisia program by targeting startups and innovative SMEs with high growth potential and enhancing the entrepreneurship financing ecosystem. This includes developing venture capital funds, incubators, accelerators, and co-working spaces. The project aims to mobilize additional investments from private sector funds for innovative startups and through direct co-investments in innovative SMEs alongside private sector partners. So far, the Anava fund of funds, established by the project, has invested $30 million in four subsidiary funds, raising $67 million. Eleven startup investments have been made through these funds, with plans to accelerate investments over the coming year. The $17 million InnovaTech co-investment fund for innovative SMEs has made seven investments, using about 25% of its available funds. Combined, these two components have mobilized an additional $37 million in private financing.

Last Updated: Sep 20, 2024