Just 24 hours after the visit of the president of Tunisia Kaïs Saïed to Iran on 22 May – a first since the advent of the Islamic Republic – for the funeral of former president Ebrahim Raisi, the trade and development ministry held a meeting in Tunis to boost cooperation between the two countries.

Raissi, who died in a plane crash on 19 May, had made Africa a priority.

As part of the preparations for a forthcoming meeting of the Tunisian-Iranian joint commission, the ministry’s chief of staff, Lamia Abroug, has promised to make Tunisia a platform for facilitating exports of Iranian products to the rest of Africa.

Although trade relations between Tehran and Tunis – as with other African capitals – are weak to say the least, there is room for further development. But the positive spin-offs remain hypothetical when set against the risks.

Trade with Africa, a recent priority for Tehran

Trade between Tehran and the continent totalled $1.3bn in the fiscal year March 2022-March 2023, up 2.24% on the previous year, according to figures released at the second Iran-Africa economic conference held in April. The Islamic Republic’s main partners are South Africa, Mozambique and Ghana.

Iran exported $1.2bn worth of goods (oil, fertilisers, steel) to 49 African countries and imported $95.3m worth (agricultural products, minerals, meat) from 23 countries. Tehran plans to reach $10bn in trade within three years. But trade remains anecdotal, representing less than 1% of Iran’s total trade.

Tehran still needs to break Western isolation, even if it is more for political opportunism than for any real economic purpose

“The lack of economic complementarity between raw material-producing states, geographical distances and Iranian promises of development aid that are not always honoured by the Islamic Republic, which has itself been experiencing significant economic difficulties since 1979,” said researcher Clément Therme in a note published by the French Institute of International Relations (Ifri) in December 2022.

A hub towards ECOWAS and the European Union

At first glance, Tunisia has little to offer Iran: no grain or raw materials to export. Phosphates could be a promising market, as Iran imports quantities to manufacture fertiliser; but production is far from recovering its former glory. Iran may also be interested in Tunisia’s geographical location and multiple economic partnerships.

As a member of the Common Market for Eastern and Southern Africa (COMESA), an observer member of the Economic Community of West African States (ECOWAS) and a privileged partner of the European Union (EU), Tunisia offers Iran a host of opportunities to penetrate markets that are difficult to access because of its diplomatic isolation.

“Tehran still needs to break Western isolation, even if it is more for political opportunism than for any real economic purpose,” says David Rigoulet-Roze, a research associate at the Institut de relations internationales et stratégiques (Iris) and editor-in-chief of the journal Orients stratégiques.

Technology transfers and the budget deficit

While the Tunisian president seems to have definitively closed the door on a loan from the International Monetary Fund (IMF), and therefore on American financial guarantees, Tunisia is frantically looking for “friendly countries” to fill its budget deficit. But the list is shrinking fast.

Saudi Arabia is demanding an agreement with the international financial agency before putting its hand in its wallet; Qatar is critical of the wave of arrests that has hit the Islamist party Ennahdha; and powerful neighbour Algeria, a supplier of gas and oil, would take a dim view of a rapprochement with the United Arab Emirates, judged to be too close to Morocco.

As for Russia and China – where Kais Saïed completed an official visit on 1 June – they have never contributed directly to Tunisia’s budgetary support. So why has Tehran been chosen, especially as the Shiite question is agitating the very Sunni Tunisia? Observers, however, are more sceptical.

Iran isn’t a big deal, they’re not the ones who are going to bring us any money

At the meeting on 23 May, the trade ministry raised the possibility of technology transfers. There is potential for developing collaborations in the digital and industrial sectors. Tunisia’s workforce is among the most highly qualified and cheapest in the region.

The chief of staff insisted on the “pivotal role” of the private sector in this future partnership. However, the main stakeholders have clearly not been made aware of this new strategy. The Arab Institute of Business Leaders (IACE) and the Tunisia-Africa Business Council (TABC), two of the main pro-business think tanks, have not been approached.

When questioned, it appears that none of them have specifically discussed the advantages of such a relationship. “Iran isn’t a big deal, they’re not the ones who are going to bring us any money,” says one entrepreneur. In the summer of 2023, Raissi, on a visit to Uganda, Kenya and Zimbabwe, spoke more of African partnerships based on oil for food, than direct investment.

American and European backlash

But is it worth the risk? In any case, the North American administration would impose heavy fines on Tunisian companies that collaborate with Iranian entities, in the form of joint ventures or otherwise.

“It’s a very dangerous game that the Tunisian authorities are playing, because the OFAC [US Office of Foreign Assets Control] is very strict. No dollar transactions are allowed with companies linked to Iran. Just look at the record fines BNP Paribas, for example, has had to pay [$9bn in 2014 for breaching the embargo],” says Rigoulet-Roze.

While the European Union does not impose economic sanctions, it could distance itself by reducing or even withdrawing its financial aid to Tunisia. European multinationals, for their part, could be more cautious about investing in a country that is on the United States’ radar.

And yet seven out of every ten products exported from Tunisia go to the European Union. Finally, the tourism sector driven by Europeans (around 4% of GDP in direct contribution), could also suffer.