Tunisia must use government funds effectively to bounce back from Covid-19

Globaldata Travel and Tourism 16 April 2020 (Last Updated April 16th, 2020 14:36)

Tunisia must use government funds effectively to bounce back from Covid-19

Tunisia officials said that the tourism sector could lose $1.4bn and approximately 400,000 jobs due to Covid-19. The nation is reliant on tourism for economic success and the sector is a major employer and contributes 8% to GDP. Seeking government help was an appropriate action to take to combat the huge economic loss.

Tunisia’s finance minister said that the country’s economy will decrease up to 4.3%, the steepest drop since its announced independence in 1956. This emphasises the impact of Covid-19 in Tunisia. Although a $745m loan from the International Monetary Fund (IMF) may counteract the economic loss somewhat, it will be likely that further funding will have to take place down the line as industries within the sector scale back summer plans, reducing tourism levels in Tunisia in the next few months.

Tunisia has seen fluctuations in international arrivals due to the terror attack in 2015. However, the country has reached a steady increase and was forecast to see 9.1 million tourists in 2020, according to GlobalData.

A budgeting plan has not been released, but the majority of the loan must be used for bailouts within the tourism sector. This is so businesses can survive and continue to be a major economic contributor post-Covid-19. If tourism companies do not survive the pandemic, then the recovery period will be drastically longer.

The loan must fund promotional activity, including promoting domestic tourism. This would be beneficial for Tunisia as the country sees more international tourists than domestic. In 2019, the country saw 6.8 million domestic tourists compared to 8.7 million of international tourists, according to GlobalData. However, international tourism will take longer to recover after the pandemic, which means domestic tourism holds great potential for Tunisia.

Tunisia has approximately 780 confirmed cases and 35 deaths. Compared to other countries, these figures are low. Tunisia has implemented various strategies to combat the virus, such as implementing a strict lockdown and has deployed robot police to patrol public areas and question Tunisians on why they are outside.

Health officials said that there is uncertainty regarding when the peak of Covid-19 will be reached, showing the country may be a long way off from seeing the end of the pandemic. Using the fund for short-term objectives could prove to be ineffective but a necessary evil. The country will likely have to seek future loans due to the unclear timeframe for when the pandemic will be over.