In a plenary session brimming with hope, Tunisian lawmakers on Saturday, November 30, 2024, narrowly rejected a proposed amendment to the 2025 Finance Bill that would have reshaped the country’s restrictive foreign currency policies. The contentious new Article 67, which sought to simplify the process for Tunisians residing in Tunisia to open foreign currency accounts, was defeated with 51 votes against, 48 votes for, and 30 abstentions.

The proposed measure was an ambitious attempt to alleviate long-standing frustrations over access to foreign currency. Had it passed, it would have allowed residents to open accounts through authorized intermediaries without prior approval from the Central Bank of Tunisia (BCT). Proponents touted it as a game-changer for Tunisian startups and citizens grappling with financial barriers in an increasingly globalized economy.

But Finance Minister Sihem Boughdiri Nemsia had other concerns. Warning of a slippery slope, she argued that such accounts might bolster the already thriving parallel foreign exchange market, encourage speculation, and weaken the Tunisian dinar. Furthermore, the potential for misuse in money laundering and a reduction in crucial diaspora remittances added to her litany of objections.

For critics of the government, the rejection was business as usual: another chapter in Tunisia’s dance of progress versus preservation, where bold reforms are often met with an emphatic “Not yet.”

Startups Caught in the Crossfire

Tunisian startups have long been hailed as the country’s innovation pioneers, yet they remain tethered by financial regulations that seem to prioritize control over growth. The much-lauded Startup Act of 2018, which granted startups benefits like monetary grants and patent cost incentives, also promised easier access to foreign currency accounts. That promise, however, has proven elusive.

“Going international for a Tunisian startup is almost impossible,” said Yahya Bouhlel, co-founder of GoMyCode, an edtech startup with a growing footprint across Africa and the Middle East. While GoMyCode’s status as a certified startup theoretically grants it the right to a foreign currency account, the Central Bank’s approval process can take months, leaving businesses in a bureaucratic quagmire.

Faced with these challenges, GoMyCode opted to establish its headquarters in the Netherlands, citing the country’s streamlined bureaucracy and equal treatment of foreign shareholders. This move enabled the startup to raise funds from international investors while sidestepping Tunisia’s regulatory hurdles. Though headquartered abroad, GoMyCode maintains a local branch under Tunisian law, channeling resources back to its operations in Tunis and other regional centers.

For Bouhlel and others in the ecosystem, the rejection of Article 67 is a frustrating reminder of the systemic inertia that has driven many startups to seek opportunities elsewhere.

The government’s cautious approach to foreign currency reform reflects legitimate concerns about economic stability. Tunisia’s economy has been battered by inflation, dwindling reserves, and an ever-looming shadow of public debt. Loosening restrictions on Tunisian foreign currency accounts could indeed exacerbate these issues, particularly in a country where parallel markets thrive on any regulatory slack.

Yet the absence of reform also stifles growth, particularly for startups seeking to compete globally. While the rejection of Article 67 preserves the status quo, it also reinforces a pattern where short-term economic fears outweigh long-term investment in innovation and entrepreneurship.

A Symptom of Broader Struggles

The debate over Article 67 underscores a deeper struggle within Tunisia’s governance: balancing the demands of a global economy with the imperatives of domestic stability. For now, the government appears to be prioritizing caution, leaving startups and citizens to navigate the complexities of an outdated currency regime.

Whether this marks a prudent choice or a missed opportunity will become clear in the months to come. For now, the message from Tunisian lawmakers is loud and clear: progress can wait — just not yet.