Ghost workers sap phosphate wealth in Tunisia

Heavy machinery at a phosphate mine in Tunisia. The country’s phosphate exports have plummeted in recent years. (Reuters)
Updated 08 March 2019

Ghost workers sap phosphate wealth in Tunisia

  • Bloated state companies put Tunisia on a collision course with international donors amid rising joblessness, social unrest

TUNIS: Tunisia’s state phosphate firm CPG pays Abdel-Basset Klifhi a salary of $280 a month, even though he spends most days in his favorite cafe in the southern town of Metlaoui.

He is one of 21,000 people taken on by the Companie des Phosphates de Gafsa (CPG) since Tunisia’s autocrat president Zine El-Abidine Ben Ali was toppled in 2011.

Since then, the economy has been in crisis and CPG has lost its spot as the country’s top exporter. Unemployment, inflation and deficits have shot up, and the value of the dinar currency has plummeted. Loans from the International Monetary Fund (IMF) have kept the government afloat.

CPG’s hiring spree brought its total workforce to about 30,000 and aimed to reduce the number of unemployed to stop protests destabilizing the transition to democracy. Thousands more are still jobless, however, and some block roads to CPG daily to demand work. Others on the payroll want pay rises and frequently go on strike.

Phosphate production has halved since 2011 and CPG’s losses have accumulated as the wage bill grew. Employees point to other inefficiencies at the company.

CPG’s declining fortunes have highlighted the government’s failure to reform the bloated state companies that dominate the economy and have put Tunisia on a collision course with international donors.

They have also deprived the government of crucial export revenues needed to turn the economy around and create real jobs to end the daily protests and unrest, which largely target CPG.

“I get 850 dinars ($279.62) a month without doing any work,” said former protester and CPG employee Abdul-Basset.

The company spends about $70 million a year of its $180 million annual budget on salaries, Industry and Energy Minister Slim Feriani said. His ministry oversees CPG.

“The hirings that took place after the revolution years were aimed at buying social peace but increased the suffering of the company,” he said. “We are aware that they are not doing anything.”

He said the company has lost almost $1 billion a year since 2011 because of disruption caused by the protests. It has only had 4,500 production days out of a possible 14,000 at its five mines since 2011, according to company documents.

“This could have prevented us from borrowing from the IMF,” said Feriani.

Phosphates accounted for about 10 percent of Tunisia’s exports before 2011, when olive oil replaced it as the top export. In 2018, phosphate had shrunk to about 4 percent.

Tunisia agreed a $2.6 billion loan with the IMF in 2016. So far four instalments worth $1.4 billion have been paid, but each one was delayed because reforms fell behind the agreed program. Public sector salaries and reform of public companies were among sticking points with the IMF.

Analysts expect a new confrontation with the lender after the government raised salaries at public companies, including CPG, state airline Tunisair, and state energy firm STEG in November.

An IMF spokeswoman said it was “in a continuous dialogue with the authorities on the policies” in the next loan review, but declined to say when it would take place. “The IMF supports the Tunisian authorities’ economic program to reduce macroeconomic imbalances, including by strengthening external competitiveness, reducing inflation, and lowering debt, and to improve job-creating growth prospects through structural reforms,” she said.

CPG’s phosphate production fell from a record 8.2 million tons in 2010 to about 3 million tons in 2018, official data showed.

In contrast, nearby Morocco raised output to 30 million tons last year from 13 million in 2010. A stable social climate allowed it to develop the industry including the use of a phosphate pipeline.

“Tunisia is no longer on the global phosphate production radar,” Feriani said.

Until 2011, Tunisia was one of the world’s top five producers, but now stands in 11th place, far behind the leaders China, the US, Morocco, Russia and Jordan.

CPG said it could raise production by between 5 and 6 million tons this year, but only if the protests stop. In 2017, President Beji Caid Essebsi ordered the army to guard phosphate sites, but has not dispersed the protests fearing a backlash.

Some staff in the company say CPG has also lost money through other inefficiencies.

At CPG’s headquarters employees showed a Reuters team dusty, unused train carriages, bought four years ago to ship phosphate to the coast.

“They have not been used because of a (technical) problem at the railway track near the production sites,” said CPG production director Rafaa Ben Nassib.

A CPG employee said that the company sometimes ordered replacement pieces for parts that were not broken.

Nassib said that this was “wrong and unfair.” Feriani said there was no proof.


Saudi finance minister reassures public on taxes

Updated 10 December 2019

Saudi finance minister reassures public on taxes

  • Mohammed Al-Jadaan: There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully
  • The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year

RIYADH: Saudi finance minister Mohammed Al-Jadaan pledged that there would be no more taxes or fees introduced in the Kingdom until the social and economic impact of such a move had been fully reviewed.

He was speaking at the 2020 Budget Meeting Sessions, organized by the Ministry of Finance and held in Riyadh on Tuesday, where a number of ministers and senior officials gathered following the publication of the budget on Monday evening.

“There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully, especially in terms of economic competitiveness,” said Al-Jadaan.

The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year and more than 10 percent higher than the expected budget for this year. 

Most of that increase has come from taxes on goods and services which rose substantially as a result of the improvement in economic activity over the year.

The reassurances from the minister come as the Saudi budget deficit is estimated to widen to about SR187 billion, next year, or about 6.4 percent of GDP.