Tunisia: The reform of the exchange rate code is nothing but a deception for the naive.

Economic actors qualify the revision of the Exchange Code adopted by the government as a “showcase” intended to reassure Tunisia’s international partners.

Presented as a “legislative revolution” and a “historical change” by the Tunisian government, the revision of the Exchange Code approved by the Council of Ministers on March 14 leaves economic actors puzzled. Among the changes made are the recognition of transactions in crypto-assets and the liberalization of certain foreign currency payments. However, major capital flows remain subject to circulars from the Central Bank of Tunisia and require prior authorizations.

Since the dinar is not convertible, it is extremely difficult for an individual residing in Tunisia without a foreign currency bank account to purchase goods abroad or simply pay for a product on an international online shopping site. Not to mention that the local currency has lost 60% of its value in ten years.

When traveling abroad, Tunisians have access to a tourist allowance. However, it is limited to 6,000 dinars (1,775 euros) per year per person, significantly restricting travel. Even for business trips and students, the amounts are regulated. Transfers, purchases, or online service payments in foreign currencies are also subject to a series of prior authorizations from the Central Bank, as well as various restrictions and administrative obstacles.

Ahmed Hermassi, a 38-year-old freelancer specializing in audiovisual creation and communication, has been struggling with these legal constraints for ten years. Without a legal status for independent workers, he cannot buy an online application, necessary software for creative work, or sponsor his product on social networks. Like purchases, receiving payments must also be justified to the Central Bank. Even for a few cents.

Parallel Digital Economy

“The Central Bank can allow us to send and receive foreign currency. The problem is that, for each transfer, you have to wait, queue up, justify… It is neither competitive nor profitable,” says Ahmed Hermassi, who founded the Uprod’i network with other professionals in the sector to try to evolve the regulations.

Even today, having a PayPal account or any other platform that would facilitate certain transactions is impossible through legal channels. While the government bill provides for the possibility to “open payment accounts with foreign institutions and platforms for payment, exchange, and e-commerce,” it is specified that these accounts must be used “mainly to receive payment for exports made,” and then repatriated.

To break free from these constraints, a parallel digital economy, in addition to the traditional black market, has developed on social networks in Tunisia. In public Facebook groups dedicated to independent workers, requests such as “Who can sell me 1,000 euros? Give me your rate” flourish, amidst job offers or services, with rates often higher than the official rate set by the Central Bank.

It is difficult to measure the extent of the sums circulating through these unofficial channels. But Ahmed Hermassi warns of the risks faced by those trying to acquire foreign currency in this way: not only can they fall victim to scams, but they also risk being prosecuted for money laundering. Exchange offenses are punishable by two years in prison and a fine – down from five years before the reform.

Low Investment Level

Beyond the revision of these legislative provisions, the amendments made by the government do not satisfy the various economic actors pushing for a change in exchange regulations. In its assessment of the proposed provisions, the Arab Institute of Business Leaders (IACE) regrets that “no guarantees are given for issues mainly related to the slowness of procedures, waiting times, and setting of limits” which are still governed by circulars and implementing decrees.

“These are just showcase laws, laws that will be adopted solely to improve our image abroad, to tell our international partners that we are moving up,” says Louai Chebbi, economist and president of Alert, an association fighting against rentier economy in Tunisia.

According to him, the liberalization or convertibility of the dinar would be premature given the low level of investment and the weak Tunisian currency. “If we open up to free circulation in this context, there is a risk of significant transfers to safer economies,” he warns, raising the threat of a sharp devaluation of the local currency. For him, a real currency liberalization is conditioned on restoring confidence in Tunisia’s economic and political situation.

Source: Le Monde