Tunisia’s Investment Landscape: The Critical Role of Gross Fixed Capital Formation (GFCF)

Discussions about investment in Tunisia, its shortcomings, and the urgent need to stimulate it dominate our daily discourse. However, there are few occasions when we address Gross Fixed Capital Formation (GFCF)—the concept that truly reflects the tangible reality of investment.

Understanding GFCF

GFCF encompasses both tangible and intangible assets:

Tangible assets: Construction, equipment and machinery, and cultivated biological assets.
Intangible assets: Research and Development (R&D), computer software and databases, and mining exploration expenditures.

The term "gross" indicates that the calculation does not deduct the consumption of fixed capital (depreciation).

Recent Trends and Performance (2021–2025)

In 2025, GFCF totaled 26.457 billion Tunisian Dinars (TND). Over the 2021–2025 period, the average growth rate was 6.1%. It is important to note that GFCF is expressed in nominal values. In an inflationary context like Tunisia’s, part of this increase may not reflect a genuine rise in the physical volume of investments but rather the upward pressure on the prices of the various components of this indicator.

Key Contributors to GFCF

Non-Financial Corporations The relative dynamics of GFCF are largely driven by non-financial corporations. Their productive investments grew by an average of 12.2% between 2021 and 2025, totaling 11.339 billion TND. This rebound demonstrates a significant effort to modernize equipment and industrial capacities, despite a complex economic climate.
Households The second major contributor to GFCF is household investment, primarily in real estate. This sector has tended to stabilize, with an average growth rate of 1.5% between 2021 and 2025. Growth has been constrained by the contraction of purchasing power and the high cost of credit.
Public Administration The public sector faces severe budgetary constraints that limit its ability to undertake large-scale infrastructure projects. Consequently, public investment remains below optimal levels. By the end of 2025, public GFCF stood at approximately 5.769 billion TND, representing an average growth rate of 3.3% over the 2021–2025 period.
Financial Institutions Financial institutions reported investments of only 592 million TND, accounting for just 2.2% of national GFCF. While this figure is low, it is consistent with their core business model, which focuses on financial intermediation rather than direct capital formation.

The Strategic Imperative: Raising GFCF as a Share of GDP

Overall, Tunisia’s GFCF remains insufficient. It represents only 15.4% of GDP, whereas countries such as Morocco and Ethiopia report levels exceeding 30%.

This disparity highlights a critical structural gap. To close this gap and foster sustainable economic growth, it is imperative to liberalize economic initiative and create an environment that encourages robust, long-term investment.