The Context

The political context prevailing in the Republic of Tunisia post-revolution has been dominated by the preparation of a new constitution and the holding of legislative and presidential elections at the end of 2014, appointment of a Government in February 2015 and establishment of new institutions. The socio-political situation is fragile and made more so by preparations for the legislative and presidential elections scheduled for 2019.

Economic growth is led by tourism, agricultural production and robust exports (phosphates in particular). The country posted year-on-year GDP growth of 2.5 per cent in June 2018, the highest since 2014. The reforms planned to strengthen governance and improve access to financing should lead to greater job creation in the private sector. Nevertheless, Tunisia is still faced with deteriorating public finances and the problems posed by launching the necessary structural reforms for recovery. The risk of macroeconomic instability has risen as a result of higher inflation, which reached 7.5 per cent in August 2018, its highest level since 1991. The external context is also less favourable as a result of high oil prices and greater risk aversion in global financial markets.

Poverty rates remain high in Tunisia: 15.5 per cent of the population were living below the national poverty line in 2016, with a substantial gap between urban poverty (10 per cent) and rural poverty (26 per cent). There are wide disparities between regions rich in natural resources, such as the Northeast (10.3 per cent), and ecologically fragile regions where the main pockets of poverty are found, in particular the mountainous areas of the centrewest (32.3 per cent) and northwest (25.7 per cent).

The rate of undernourishment has remained virtually unchanged over the past 15 years (5.6 per cent between 2004 and 2006 and 5 per cent between 2014 and 2016). However, food security is under threat from climate change and degradation of natural resources, and the most vulnerable people are those living in rural areas, particularly women and young people.

Agriculture continues to play a key role, accounting for close to 10 per cent of GDP and 16 per cent of employment, and contributing to regional development. The agriculture sector, however, is subject to multiple structural constraints, including poorly organized value chains and limited access to financing. Agriculture is affected by severe water stress combined with poor soil fertility. According to projections, by 2025 drought will reduce the area planted to rain-fed cereal crops by about 30 per cent. The annual cost of environmental degradation is estimated at 2.7 per cent of GDP.  Although the constitution protects the economic, social, cultural and political rights of women, those who live in rural areas continue to face a number of constraints that limit their access to decent paid employment. Just 20 per cent of them earn their own income (compared to 65 per cent of rural men), and just 4 per cent of promoters of agricultural projects are women, whereas women account for 58 per cent of agricultural labour.

Another disadvantaged group is rural youth. Thirty-three per cent of young people living in rural areas are out of work and out of school or occupational training (compared to 20 per cent of urban youth). In the interior, the rate rises to 42 per cent for young men and 45 per cent for young women. In the case of self-employed young entrepreneurs, who represent 8 per cent of active rural youth (compared to 13 per cent of active urban youth), most are working in the informal sector.

The Strategy

The overall objective of the country programme for IFAD and Tunisia for the period 2019-2024 is to improve the living conditions, incomes and climate change resilience of poor rural people, particularly women and youth. It will contribute to achieving several SDGs, in particular SDG1 (no poverty), SDG2 (zero hunger), SDG5 (gender equality) and SDG13 (combating climate change).

The strategic objectives (SOs) provide continuity with those implemented in the past, taking into account lessons learned and responding to the Government’s priorities:

• SO 1: Better access to productive infrastructure and sustainable natural resource management: The aim is, more than construction, to ensure the social and technical sustainability of basic infrastructure and hydraulic works within the context of climate change. The expected outcomes are improved agricultural practices, restored soil fertility, improved access to water and rational management of water resources, and a sustainable improvement in agricultural productivity.
• SO 2: Inclusion of poor rural people in more structured agricultural value chains: The country programme will support actions to strengthen the capacities of professional organizations, build storage and processing infrastructure, and rehabilitate rural roads, as well as financing economic activities and coordinating value chain platforms. The expected outcomes will be improved organization in the targeted value chains, sustainable commercial links between smallholder producers and other value chain actors, and increased agricultural incomes.
• SO 3: Economic and social empowerment of vulnerable rural women and youth: In order to address the specific problems of rural women and youth, IFAD will fund advisory assistance to set up income-generating activities and facilitate access to microfinance while strengthening the operating and coordination capacities of the main national programmes targeted to these groups. The expected outcomes are economic and social empowerment of rural women in diversified value chains, mainstreaming of rural youth into vocational employment, and improved capacities of national and local actors for scaling up the approaches offering the greatest potential.