Interview of Mr. Abdelbasset Ghanmi, General manager of FIPA-Tunisia
30 March 2021
How has your country/region been affected in terms of FDI inflows since the start of the pandemic ?
Undoubtedly, like most of the world’s countries, the Covid-19 pandemic crisis is not without consequences for Tunisia which economic activity was deeply impacted. The GDP reached a negative rate of -7% in 2020 and the flow of foreign investments registered a decline of 28.8% between 2019 and 2020, to stand at 1885.9 million dinars. This kickback is unexpected but predictable, as the latest UNCTAD Report suggests Global foreign direct investment (FDI) flows forecast to decline sharply by up to 40% in 2020. It is projected to decrease by a further 5% to 10% in 2021 and to initiate a recovery in 2022.
The consequences of COVID-19 have already been felt in several sectors notably in energy where foreign investments edged down by 31.8% to 620.5 MD at the end of 2020, in manufacturing industries which investments down 17% compared to 2019 (1249.1 MD), in services who have known a decrease by 44% in foreign investments as well as in the agricultural sector which only drew by 17.9 MD, in 2020.
However, it should be underlined that while the drop in international investment flows continued to weigh heavily on the Tunisian economy, the country still has the competitiveness to attract more foreign investment. It recorded 517 investment operations, with a total value of 1213.8 MD, creating 9,630 direct jobs.
In this context, we believe that the figures translate the attraction of the Tunisian destination, which should be strengthened through further improvement of its investment climate and competitiveness, especially in the areas of infrastructure and logistics. Taken together, this could indicate that Tunisia is seeing the start of a global shaped recovery of business activity.
COVID has accelerated digital transformation in Investment Promotion and Investment Promotion Agencies are using new tactics to generate results in a challenging environment. In what areas of investment promotion, attraction and facilitation has your agency been leveraging technology ?
Although Covid-19 is resulting in serious economic and social consequences, one positive side effect in Tunisia has been a rapid and broad-based adoption of digital solutions and innovative approaches to remote working, as “It is in moments of crisis that a paradigm shift becomes most desirable”.
As an IPA which is at the forefront of business attraction, Invest in Tunisia Agency-FIPA has gradually adapted its traditional forms of businesses to a more digital approach through using social media and its well-designed website to regularly providing updated COVID-19-related information with available details on government support and applicable restrictions and through including new tools and solutions such as geo-mapping and virtual reality.
The agency has also used creative digital solutions to sustaining retain existing investment particularly in strategic and essential sectors and reinforcing its aftercare services which represents 70% of its activities. It has set up since the beginning of the COVID-19 outbreak a Crisis Unit available 7 days/7 to support existing foreign companies, secure their activities and exports, help them to cope with the crisis and keep their business going. With this new digital tool, a rate of over 96% for foreign operators’ queries was resolved.
- In which areas have you invested the most and which have produced the best results ?
FIPA-Tunisia is mostly engaged in proactive outreach campaigns which can lead to concrete investment results and contribute to a country’s development objectives by leveraging technology.
As part of its promotional efforts, between 2017 and 2018, the Agency was engaged in investment outreach campaigns to Canada, China and Japan targeting investors in automotive, aerospace, and business process outsourcing. These outreach campaigns led to more than twenty investment leads and is resulting in several concrete FDI projects, including manufacturing plants by Japan’s Sumitomo and China’s SAIC Motor, and the Information Technology services office of Canada’s Momentum Technologies.
However, as COVID 19 has had a significant impact on business travel and communication, on times face to face interaction, as well as on direct visits for lead generation which is the most crucial part of an outreach campaign, digital means ranging from videoconferencing and robust CRM allow Invest in Tunisia Agency to continuing its virtually outreach efforts and identifying future investors.
This is typically the international good practice we invested the more and continue to invest.
- What have been the main challenges ?
Covid-19 is affecting FIPA’s core activities. All of our conferences, missions and promotion activities, face to face (F2F) meetings with investors which are a critical component of image-building and lead-generation efforts, have been postponed or cancelled.
This imposed us to switch immediately to digital, virtual platforms and remote working arrangements to meet and remain open for business. FIPA’s team supported by home-based facilitators and this switch was not easy. Additionaly, it is very hard to close deals with companies when they cannot travel and cannot meet F2F and this could be a factor in the sharp decline of FDI in the years to come.
So, the main challenge was to maintain FIPA’s activities and our priority has been retaining and working with existing clients to react to this situation. To this effect, we have set up a crisis support unit that was available 24/7 to meet challenges faced by our existing partners.
Question 3 :
Investment Promotion Agencies (IPAs), have relied heavily on meeting potential investors at international events and at company offices abroad. With all that on hold, what types of virtual events have you run and/or attended and how have they performed ?
With the evolving of digital economy, we were able to attend several virtual events, dialogues and meetings getting together Tunisian public and private organisations and foreign business representatives and to run webinars with a deep collaboration of Tunisian Embassies worldwide in Romania, Norway, Japan, Finlande etc. open to all to participate.
The objective is to shed light the country’s competitive advantages and its strategic potential in the areas of interest.
• How do you build a personal approach when you’re working virtually ?
It’s become apparent there are several benefits for FIPA-Tunisia to a virtual conferences and meetings as there is no need to travel, they take less time to plan, and they are less expensive to organize. However, this doesn’t mean every FIPA’s event in the future can adopt a virtual format and still adequately achieve our objectives. This is simply because there is no substitute for face-to-face interactions and networkings.
This is the case of the « Tunisia Investment Forum » that FIPA-Tunisia organises. The oustanding conference brough throughout its last four editions 1500 people together from across Tunisia and North Africa business and investment community and is a platform to facilitate B2B meetings. This event was cancelled this year because nothing can quite replace the unique benefits of face-to-face gatherings which can accomplish powerful investment and partnership results.
We will endeavour to continue organising FIPA’s virtual events. But of course, we look forward to hopefully meeting face-to-face soon, with foreign partners and participants.
Thought Leadership is increasingly being recognised as a highly effective approach to C-level engagement. Edelman’s 2019 B2B Thought Leadership Impact Study revealed that 60% of C-suite executives are willing to pay a premium rate for a product or service from a company that has thought leadership as part of their philosophy. Have you run any thought leadership programmes in the last 12 months ?
Absolutely, leadership programmes are a key pillar of FIPA’s strategy to attracting foreign direct investment in priority sectors. With the support of the World Bank Group, Invest in Tunisia Agency is engaged in proactive outreach campaigns which resulted in 21 investment leads and three announced FDI projects in 2020, including a manufacturing plant in Tunisia by Japan’s industrial giant Sumitomo Group where it will produce cable harnesses for automobile companies in Europe.
The future plant will be erected by Sumitomo Electric Wiring Systems Europe (the Japanese group’s European subsidiary) that will generate 2,000 jobs for the beginning and 5,000 when production goes into full swing.
This example shows that FIPA’s well-planned and executed investor outreach campaigns is leading to concrete investment results and contribute to Tunisia’s development objectives.
• In the current operating environment, how are you going about engaging with target investors ? How are you converting warm leads ? Will this continue in the post Covid era ?
Currently, FIPA-Tunisia and its offices abraod are engaging in virtual meetings with target investors. And in order to continue proactively following up the investment interest, the Agency has implemented a fully operational Customer Relationship Management (CRM) System that recorded in details the digital interactions, meeting highlights and next steps.
We will continue to engage in outreach virtually in 2021 and beyond in the post COVID-19 world. We believe this crisis is an opportunity for Tunisia as many companies will be looking to nearshore operations and we can leverage our proximity to Europe. We can attract more investment in specific industries in which Tunisia has a competitive advantage and we are reviewing the list of priority sectors according to these new circumstances.
Tunisia can be a good partner for big markets in Europe, the Middle East and neighbouring countries in North Africa. The most important thing is to prepare for life after Covid-19 and be ready for the recovery, because there will be strong competition for investment and we are already thinking how to be more aggressive to highlight the assets our country has and focus on the sectors and the activities in which Tunisia has comparative advantages over our competitors.
With the future of FDI flows uncertain, with fewer projects and more competition, investment promotion teams are having to think more creatively to connect and engage with potential investors.
• Are there any innovative solutions your team are working on currently ?
FIPA’s team is currently working on FDI lead generation by using an innovative solution : a fully operational Customer Relationship Management (CRM) which is completely aligned to our needs. With the current crisis, face-to-face training is not possible and this is the perfect opportunity for FIPA-Tunisia to switch to e-Learning opportunities and ensure all its team is fully up to date on FDI and how to attract it.
• Are there any approaches to investment promotion marketing (cities or countries) you particularly admire ?
Several IPAs are speeding up this digital transformation. I particularly give the example of Costa Rica’s IPA « CINDE » which has a strong research unit, subscribes to LinkedIn Advisor, and is using digital marketing and predictive analytics to identify prospective investors. It is offering virtual meetings, and is looking to offer virtual site visits while encouraging industrial parks in Costa Rica to give virtual tours to those prospective investors.
Or example, the Polish Investment and Trade Agency « PAIH » and « AICEP » Portugal Global have started organising virtual site-selection visits to assist in project definition.
• What advice would you give to an investment Promotion Agency keen to adapt to the new era of digital engagement ?
As digitalisation spikes throughout the pandemic, it is increasingly clear that for an Investment Promotion Agency, there will be no return to the old ways of operating to attract foreign investment.
IPAs should in the short-term think innovatively and use new tactics to generate investment results in a challenging environment. This could be through moving at a faster pace from traditional ways of attracting businesses to the digital effectiveness.
So, to adapt to the new era of digital engagement, I advice an IPA to effectively implement an entirely new working environment – the digital workplace strategy (virtual meeting tools, Amplify CRM system…) and to equip itself with the knowledge, skills and digital workforce capabilities.
Taken together, this could foster efficiency in attracting international investments as well as, drive and navigate true changes.