Tunisian shops and supermarkets are struggling with massive shortages of basic food supplies such as cooking oil, sugar, coffee and bottled water.
Most of the goods running short are state-subsidised, which analysts say highlights the growing dysfunction in the state-administered purchasing and distribution of food. They also say there is a growing black market in subsidised goods.
At the national level, the problem is mainly financial as the state lacks the necessary funds to pay for goods shipments which are currently blocked at certain ports
Aram Belhadj,
University of Carthage
Shops have restricted their customers to buying a specific amount of supplies in an attempt to alleviate the worsening situation.
President Kais Saied and the Tunisian government have blamed the issue on traders monopolising control of basic goods and hoarders.
“The President of the Republic called on the Minister of Interior to work during this period to exert greater efforts to combat monopolies and monitor distribution channels in co-ordination with the Ministry of Trade and Export Development and the rest of the concerned authorities”, said a statement by the Tunisian Presidency on August 31.
Despite this reported action, local markets continue to witness the sudden disappearances of certain goods.
One of the main franchise supermarkets in L’Aouina, a suburb of Tunis, has barely stocked water, tea and couscous, with shelves either completely empty or sparse.
“We were not expecting the situation to get this bad”, Samir, the supermarket’s water supplier, told The National.
“Tunisia produces 1,800 water pallets during winter, and in summer that amount drops to 450. What we usually do is stock reserves for summer during the high production season.
"However, when that campaign targeting the so-called hoarders started, people were frightened of repercussions so they sold all they have, leaving us now without stocks."
For Samir, the problem is purely political. He believes that production companies and businesses feel singled out by the president’s campaign.
“We’re trying to fight the rise in prices and unavailability of certain goods by being reserved in our purchases, but despite that we’re no longer able to make ends meet,” said Souhir, a mother of three, as she surveyed the coffee stands.
For the past two weeks, coffee and tea have become the latest products to be scarce in supermarkets. Pictures have circulated online of empty shelves and brands limiting their sales to 100 grams per person.
“We were instructed to only sell 500 grams or one kilogram per person and only up to four kilograms for coffee shop owners,” Nour, a worker at coffee brand shop Ellouze, told The National.
Mariem, another coffee shop owner, said: “They keep telling us that the merchandise is stuck at the port because the government is unable to pay. We are barely managing to get five kilograms of coffee from different suppliers per day that does not cover our daily work needs."
She said she feared the crisis would lead her to closing her business if the situation remained the same.
“If this keeps happening, five families would lose their livelihoods,” she said.
Minister of Commerce Fadhila Rabhi said on Friday that she expected the coffee shortages would end this week. This comes after coffee containers recently arrived at Tunisian ports.
Meanwhile, the Ministry of Commerce has recorded hundreds of daily infringements and raids on hoarders of basic materials, such as subsidised cooking oil, sugar, flour and semolina.
Analysts say hoarding has worsened the crisis but that it is not the sole cause, contrary to the government's claims.
An economist and researcher at the University of Carthage, Dr Aram Belhadj, said the problem went beyond the government’s main argument of blaming hoarders.
“There are problems at the international level due to the crisis in Ukraine, mainly in terms of the transport of goods and its distribution," Dr Belhadj told The National. "However, at the national level, the problem is mainly financial as the state lacks the necessary funds to pay for goods shipments which are currently blocked at certain ports and unable to unload."
Dr Belhadj also believes the state’s inability to fully control distribution channels and fight the smuggling of goods to Algeria and Libya is an aggravating factor.
“The state needs to pay its bills and control the channels of distribution. The digitalisation of this process is more pertinent than ever in order for the state to control the market, especially when it comes to subsidised products."
That a parallel economy is burdening the current supply process is something many Tunisians are aware of, Ahmed, a retailer in L’Aouina, told The National.
He says the sugar he and other retailers are receiving from suppliers is mouldy and has a blackish colour. This means that it has been either stocked for too long or brought from far away.
“We have to beg now for us to manage to bring products to sell and keep our businesses going,” he said.
According to a report published by the Tunisian Forum for Economic and Social Rights, the parallel economy increased from 30 per cent of GDP in 2011 to 53 per cent of GDP in December 2021.
Mercedes-AMG GT 63 S E Performance: the specs
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On sale: October to December
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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