Tunisian state-owned enterprises are in dire straits, facing a perfect debt storm, mismanagement, the coronavirus pandemic and a decade of political instability that could push some into bankruptcy, experts say.
Ten years after a revolution that toppled the nepotist regime of Zine El Abidine Ben Ali, the sweeping reforms that economists believe are necessary to clean up the state’s finances have yet to materialize.
The situation has pushed many of the cash-strapped North African nation’s 110 state-owned companies to the brink.
“Today we are not talking about reforms but about rescue plans,” Transport Minister Moez Chakchouk told reporters last week.
Economist Hakim Ben Hammouda urged the government to “declare a state of economic emergency”.
Among the state-owned companies that are geared towards sustaining life are the national carrier Tunisair and a phosphate giant which is one of the main Tunisian employers.
Overstaffing has left the two with enticing payrolls.
Tunisair now operates a fleet of 26 aircraft, of which only seven are operational, but employs some 7,600 people.
On top of that, the coronavirus pandemic reduced the annual number of passengers by more than two-thirds last year, with revenue down 70% from 2019.
The firm is now indebted to 955 million dinars (348 million dollars) and is struggling to pay its creditors.
Last month, a Tunisian court temporarily froze its bank accounts for unpaid bills owed to a Franco-Turkish operator.
The airline has been considering laying off staff for years to reduce its payroll.
But the proposal met with strong opposition from the powerful Tunisian union UGTT, which pledged to prevent any attempt to privatize the airline.
In February, CEO Olfa Hamdi was sacked after just two months on the job, after leaking documents related to the UGTT.
In a Facebook post on Monday, the young engineer accused the union of blocking essential reforms.
– Phosphate flow –
The airline isn’t the only public company struggling with a bloated payroll.
The Gafsa Phosphate Company, established in colonial times to exploit one of Tunisia’s scarce natural resources, has seen production shut down several times as protesters in the marginalized Gafsa region demanded jobs and investment local.
Tunisia in 2010 ranked fifth in the world as a producer of minerals, an ingredient in artificial fertilizers and once a key source of state revenue. Today he arrives at number 12.
Last year, phosphate production hit one of its lowest annual figures in a decade, at just over three million tonnes, according to former trade minister Mohsen Hassen.
Tunisia was even forced to import phosphate from neighboring Algeria.
Since the fall of the Ben Ali regime, successive governments have created thousands of menial jobs in the public sector.
Hassen said this at the Gafsa Phosphate Company had a “snowball effect”.
However, even before the revolution, “the government tried to buy social peace by hiring people in these companies, which exacerbated their problems,” according to Ben Hammouda.
– “New social pact” necessary –
In a decade of democracy, Tunisia has experienced repeated political crises and nine governments, leaving it devoid of any long-term economic strategy.
As a result, the aggregate debt of state-owned enterprises has reached around 40% of GDP, according to the International Monetary Fund.
It has undermined the state’s finances as a whole: Last week, Moody’s downgraded Tunisia’s sovereign debt rating, citing, among other things, “exceptional guarantees to state-owned enterprises at over 15% of GDP in 2020 “.
On Tuesday, IMF official Chris Geiregat demanded tighter controls on transfers to “poorly managed public enterprises”.
During a virtual press conference, he called for “a reform strategy that assesses the role of public enterprises in the economy, centralizes their control, strengthens their corporate governance and improves the transparency of their finances”.
The former Minister of Commerce Hassen had another prescription to get out of the crisis: “A new social pact which defines the strategic and economic orientation of the State and its role in the preservation of these institutions.
ayj / cnp / by / lg