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Thu, 21 Nov 2019 00:05 GMT

Tunisian Tourist Numbers up but Foreign Currency Reserves down

Business

Ahmed Nadhif

Tue, 28 Aug 2018 13:36 GMT

Tunisia seems to be heading towards a record tourism season after its ministry of tourism announced that the number of incoming tourists exceeded five million between January and August 2018. This will raise the total number of visitors during the current season by 17.5% compared to last year.

Tunisia’s tourism minister, Salma Al-Loumi, said that the sector has earned $784 million so far this year, with an increase of 23.8% compared to the same period last year. Al-Loumi pointed that tourism revenues could reach more than $1 billion by the end of the season. Tunisia’s ministry of tourism announced a growth in tourism activity revenues of 42% during the first seven months of 2018, compared with the same period in 2017.

The tourism sector is considered by Tunisia as one of the crucial sectors in the nation’s economy, in addition to exports of phosphate, dates and olives, as it is one of the most important sources of foreign currency in addition to Tunisian expat transactions from Europe and GCC countries. The Tunisian central bank expects an increase in its foreign currency reserves during the next few days due to currency earned by local tourist agencies and hotels, following an unprecedented decline in its overall foreign currency reserves.

Data published on August 2nd by Tunisia’s central bank revealed that the foreign currency reserve crashed to DT10.74 billion (Tunisian Dinars), which can only cover imports for 70 days, compared to DT101 billion in the same period last year.

Abdel Salam Al-Harshi, Tunisian expert in economic affairs, said that achieving new financial revenues from the tourism sector will be one factor in improving financial balance deficits in the country but it will not be the decisive factor. “Tourism revenues alone are not enough to cover the financial deficit suffered by the state,” said Al-Harshi. “It is mainly affected by massive foreign debt and many tourism establishment owners do not transfer incoming money from clients into the country, keeping it in off-shore accounts.” Al-Harshi explained that tourists do not do their bookings within Tunisia but with tourist agencies abroad and therefore the tourism season is exceptional in numbers but without equivalent financial revenues. “This is not a new problem. In recent years investors have refrained from transferring their money to the local market due to a rise in the economic threats index, while taking advantage of the state investment in the tourism sector to sell tourism to overseas visitors,” Al-Harshi explained.

Former Tunisian central bank governor, Al-Shathli Al-Ayari, revealed the information about poor foreign currency revenues when he posed a question in the Tunisian parliament in May about the comparatively poor tourism sector revenues despite the positive increases in visitor numbers in the last four months, literally asking “Where did the tourism money go?”, according to Al-Harshi.

On the other hand, Tunisian journalist Mohamed Baltayeb believes that the issue is not so much about the value of tourism sector revenues or the number of tourists visiting the country but more about a structural problem that the sector has been suffering from for years, namely, fierce competition from rising regional and global tourism destinations. “The state and the investors in the tourism sector did not seek to develop tourism and focus on cultural and artistic tourism instead of popular just tourism thus attracting more visitors from the European middle classes,” said Baltayeb, “This should not be dependent on quantity without achieving massive revenues just in order to measure the number of tourists.”

Baltayeb also pointed that Tourism in Tunisia, since its beginnings, has been locked into traditional forms and structures, while competing destinations in the Mediterranean, Morocco, Turkey and the UAE have achieved large-scale development in their tourism sectors.

Despite the positive indeces achieved by Tunisia this year in foreign trade and tourism it still suffers from deep problems in financial balances and foreign currency reserves. This is due to the country’s rising foreign debt and the economic crisis it has been going through since 2011, following the fall of former Tunisian president, Zain Al-Abiden bin Ali. Experts see that developing the structure of the Tunisian tourism industry by focusing on quality as well as quantity, will raise its financial revenues in the future. However, this remains dependent on the political and security stability of the country, which has suffered from terrorism since 2012 as well as successive changes in government in addition to the need for a wholesome long-term economic programme supported by the electorate and key political players.


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