Strategy Note /
Tunisia

Tunisia: Coalition-building challenge

  • Difficult process of building a Parliamentary coalition of parties to form the government now lays ahead.

  • Moderate Islamist party, Ennahda, faces significant challenges to establish a stable and coherent coalition.

  • We reiterate our view that this raises the risk of Tunisia staying the course of fiscal control.

Tunisia: Coalition-building challenge
Hasnain Malik
Hasnain Malik

Strategy & Head of Equity Research

Tellimer Research
14 October 2019
Published by

Tunisian Presidential and Parliamentary elections have finished. The worst-case scenario of a Presidential victor missing his inauguration due to his incarceration has not come to pass. Now the difficult process begins of building a Parliamentary coalition of parties to form the government. However, moderate Islamist party, Ennahda, which is the largest party in Parliament, faces significant challenges to establish a stable and coherent coalition. We reiterate our view that this raises the risk of Tunisia staying the course of fiscal control (the current US$2.9bn IMF program expires in May 2020), let alone enacting structural reform (unemployment is over 15%).

(1) Ennahda has merely 24% of seats;

(2) Ennahda's own popularity has declined at this election (its share of seats was 41% in 2011 and 32% in 2016, when voter turnout was much higher); 

(3) Three losing parties with a collective seat count of 35% are very unlikely coalition partners (Heart of Tunisia is led by Presidential round 2 loser Karoui, where Ennahda backed the winning candidate, and the other two parties – Democratic Current and People's Movement – have publicly voiced their reluctance to join Ennahda);

(4) Ennahda may have to establish a coalition with Dignity (which has voiced its willingness to do so and has 10% of seats) and a very fragmented group of 10-15 small parties and independents (none of which individually has more than 1-2% of seats).

 

Election results: coalition-building challenge ahead

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Source: IHAE 

Related reading

Tunisia: Presidential election portends coalition and economic risks ahead, 16 September 2019

Tunisia: Populism and weak post-election coalition risks reform (and IMF loan), 4 August 2019