A bill concerning financial transactions with foreign countries and the Foreign Exchange Code is being prepared, according to Sihem Nemsia Boughdiri, Minister of Finance. A text whose objectives will be “the gradual restoration of the balance of public finances, the improvement of the yield and procedures of the exchange rate regime, as well as that of the investment and business climate”.
The Tunisian government hopes that the relaxation of foreign exchange regulations will help to raise the level of exports and national savings and will increase the level of foreign exchange reserves.
“This reform will make it possible to adapt to the technological evolution in financial transactions within the framework of the global digital economy and the digitization of financial transactions with foreign countries, which will give positive signals to Tunisian and foreign investors”, Finance Minister Sihem Nemsia Boughdiri recently explained.
Liberalization of current operations
According to the minister, the revision of the legislative framework governing the activity of manual exchange will push illegal exchange operators towards the official circuits and will strengthen the national systems of payment and electronic transfer. This reform will emphasize the liberalization of current operations, foreign investment operations in Tunisia and investments by Tunisians abroad.
The bill, relating to financial transactions with foreign countries and the Foreign Exchange Code, was the focus of a workshop attended by the Minister of Finance, Sihem Nemsia Boughdiri, the Minister of Economy and Planning, Samir Saïed, Governor of the Central Bank of Tunisia, Marouane Abassi, President of Utica, Samir Majoul, as well as representatives of the private sector, start-ups and professional organisations.
The bill aims to “revise the regulations for changes in the context of the implementation of the economic recovery program and the reforms announced by the government with the aim of gradually restoring the balance of public finances, improving the performance of the exchange rate regime, to simplify its procedures and to strengthen its role in improving the investment and business climate”.
This project also aims to improve the level of exports and national savings and increase the level of foreign exchange reserves.
A reform that facilitates the work of economic actors
Indeed, this reform of the bill, concerning financial transactions with foreign countries and the Foreign Exchange Code, has been demanded for years by investors, exporting companies, service providers abroad, startuppers. This insistence has paid off since the reform of the exchange rate policy will soon be initiated. This reform will to face the current difficulties and facilitate the work of the various economic actors whether in Tunisia or abroad.
According to observers, the relaxation of foreign exchange regulations is therefore inevitable, especially since it is a major asset for the revitalization of a moribund economy.
According to Marouane Abassi, Governor of the Central Bank of Tunisia, this reform program will strengthen financial transactions in Tunisia and with the outside world and will improve the investment and business climate. It should be noted that these reforms would not have seen the light of day without the insistence of the International Monetary Fund (IMF).
Since last December, the Minister of Finance had announced, on a television set, that a “draft text amending the foreign exchange regulations in Tunisia has been drawn up by the competent services of the department and will be submitted for consultation, from the first week of January 2023, to the parties concerned, including the Central Bank of Tunisia and the Banking and Financial Council”.
The shortcomings to overcome
Since this announcement, which did not reveal the details of this reform and according to semi-official reports, “the relaxation of foreign exchange regulations in Tunisia is a new generation of major reform on the financing and attractiveness of investments” . According to these same sources, it is a matter of ensuring “Tunisia’s compliance with the international pre-requisites in terms of the implementation of a relaxation of the foreign exchange regulations, with a view to a gradual lifting of the exchange control”.
During his participation in the business days in Sousse, Marouane Abassi gave more details: “The BCT is finalizing the document relating to the revision of the Foreign Exchange Code in Tunisia”. On the occasion of a panel on “budgetary sovereignty and security of payments”, Abassi declared that “the Foreign Exchange Code will facilitate the work of the investor, whether Tunisian or foreign. It includes procedures related to the granting of authorizations and the opening of a current account, as well as other points, such as the length of stay of the investor and the exchange of currencies”.
For several years already, Faiza Feki, director general of foreign exchange operations at the BCT, had indicated that the Central Bank of Tunisia will present to the government its project for the relaxation of foreign exchange regulations in Tunisia. This project is mainly aimed at simplifying currency transfer procedures for non-residents and streamlining procedures relating to the internationalization of resident companies, she said.
She also indicated that the BCT has drawn up, jointly with the Aptbef and the IACE, a strategic report encompassing all the proposals relating to the reform of foreign exchange regulations in Tunisia. The objective of this reform is to ensure the attractiveness of investments as well as the promotion of international trade, by boosting Tunisian exports and also by raising the level of foreign currency reserves.
Compared to the current regulations, the reform of the exchange regulations proposed, at the time of the late Slim Chaker (Minister of Finance in the government of Habib Essid from February 2015 to August 2016), the increase of the ceiling of investment, allowing a resident company to go out on the foreign market, while setting certain conditions relating to the duration of the establishment of the company in Tunisia (5 years minimum), to its financial situation in terms of keeping financial statements which must be certified by an accountant and its tax situation.
According to finance specialists, the Exchange Code in force is blamed for “the fluidity of movements of funds and transfers, especially for investors”. Some consider that this law today prevents local operators from easily acquiring traffic on international platforms to publicize their online sales sites. Also, the annual ceiling of the international technology card “CTI” used by companies to carry out this type of transaction remains derisory (100,000 Tunisian dinars).
