The empty Sidi Salem dam in the northern Tunisian area of Testour, in the Beja province, in 2021. Hundreds of thousands of Tunisians lack access to clean water. AFP
The empty Sidi Salem dam in the northern Tunisian area of Testour, in the Beja province, in 2021. Hundreds of thousands of Tunisians lack access to clean water. AFP
The empty Sidi Salem dam in the northern Tunisian area of Testour, in the Beja province, in 2021. Hundreds of thousands of Tunisians lack access to clean water. AFP
The empty Sidi Salem dam in the northern Tunisian area of Testour, in the Beja province, in 2021. Hundreds of thousands of Tunisians lack access to clean water. AFP

Tunisians brace for harsher annual water shortage as temperatures climb


Erin Clare Brown
  • English
  • Arabic

In the mountains of Tunisia's north-west, dozens of villages sit on the shores of the Sidi Barak reservoir, the second-largest in the country. Yet many of them have limited or no access to fresh, potable water.

"They can see the water from their homes, yet they have no access to it," said Yasser Souilmi, a natural resources management engineer at Houloul, which tracks public policy in Tunisia.

Hundreds of thousands of Tunisians lack clean water and, as temperatures rise over summer, their needs are again in the spotlight.

President Kais Saied this week called on the Minister of Agriculture and Water Resources to tackle what he called a "state of emergency".

"Tunisians today are complaining of thirst in many regions as a result of several considerations, including water policy," Mr Saied said.

Tunisia's water management is not centralised, with much of the country's water policy written and implemented under the Ben Ali administration (1987-2011), says Mr Souilmi, and has not been updated in the decades since.

Successive governments have failed to improve infrastructure, distribution or management of the resource. Many water associations are riddled with debt.

Export crops given water priority

Nearly 80 per cent of Tunisia's water is consumed by the agriculture sector, with so-called "thirsty" export crops — such as strawberries, lettuce and tomatoes, which are grown all year round and shipped to Europe — receiving priority for irrigation.

With rising global temperatures, such crops demand more water, even as less is available due to shorter rainy seasons.

Water-intensive heavy industry is another major consumer.

Most of that water comes from the country's north-western mountains, on the border with Algeria, and is pumped to the more populous costal regions, often leaving residents without access to the vital resource.

"It's a problem as old as Tunisia itself," said Mr Souilmi. "Even the Romans built aqueducts to move water from the mountains to the coast here."

But without updated water policy, many Tunisians in those regions will continue to rely on the bottled product to meet their daily needs.

Mr Saied condemned that inequality and the decline in availability that has made his country the number four consumer of bottled water per capita in the world.

"Who can afford bottled mineral water and why is it bottled instead of providing it directly to citizens?" the president said.

He stressed the need to "take immediate measures to restore water associations, then consider the possibility of rescheduling their debts".

Watch - How a Tunisian start-up aims to battle water scarcity

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: June 14, 2023, 6:54 AM