Lack of Liquidity, Debt Main Reasons for Company Closures in Tunisia

Published May 18th, 2017 - 02:55 GMT
Financial problems, mainly liquidity and debt, are the main reasons for the closure of 249 companies in Tunisia between 2005 and 2015, according to a study. (Shutterstock)
Financial problems, mainly liquidity and debt, are the main reasons for the closure of 249 companies in Tunisia between 2005 and 2015, according to a study. (Shutterstock)

"Financial problems, mainly liquidity and debt, are the main reasons for the closure of companies", according to the results of a study on "the problems of the creation and the sustainability of companies in Tunisia ", presented Wednesday, by the Agency for the Promotion of Industry and Innovation (APII). 

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This study, carried out with 249 companies that closed during the 2005-2015 period, shows that political and security instability and the weak support of companies are the reasons for the closure of these firms. It covers industrial enterprises with more than 10 jobs and declarations of industrial projects of more than 100 thousand investment dinars. 

Speaking at a seminar held in Tunis to present the results of this study, Director-General of APII, Samir Bechaouel said that the objective is to propose an action plan to improve the rate of achievement of declarations Projects and the average life span of Tunisian companies. 

The initiative was launched by APII to identify reasons for non-completion of industrial project declarations, to assess the sustainability of industrial enterprises and to determine their average life span and to identify the main reasons for closure, "He said, adding that the rate of achievement of declared projects has decreased to 45%, currently, against 52%, during the period 2000-2010. 

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This study, which involved 421 promoters who submitted investment declarations without achieving their projects during the period 2005-2015, showed that difficulties in accessing financing and cumbersome administrative procedures constitute the main obstacles, in the preparation phase of the project. 

The promoters surveyed recommended simplifying administrative procedures as a matter of priority, strengthening the credit guarantee system and access to financing instruments that were diversified and adapted to the needs of promoters. They considered it necessary to have a personalised accompaniment, during all the stages of creation of the project. 

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Speaking on this occasion, Tunisian Confederation of Industry, Trade and Handicrafts (UTICA) Executive Board member Béchir Boujday said that "the private industrial sector remains the first investor, the first exporter and the first creator of wealth and employment in Tunisia. For a real resumption of investment in Tunisia, there must be political and security stability, visibility and a strategy to build a post-revolution economic model. "

For the Vice-President of the Tunisian Confederation of Tunisian Citizens Enterprises (CONECT) Karim Garnaoui, it is imperative to accompany the companies during their creation for a period of three years and to facilitate the training to ensure their durability. 

The Secretary of State for Trade Abdellatif Hmam, said that Tunisia today faces several economic challenges related mainly to export, job creation and regional development. The creation of wealth can only be done through the creation of companies. He said that the industrial fabric in Tunisia currently has 5,500 companies, whereas only the creation of 400 companies is registered annually.


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