The Report: Algeria 2016
Amid the constant change that has recently characterised North Africa, Algeria has charted a path of relative stability. This is largely due to vast oil and gas resources that have made it Africa’s fourth-largest economy.
Country Profile
Algeria is Africa’s largest country. Its population – which is currently just under 40m – is rising at an annual rate of 1.9%. Like many other countries in North Africa, the population is young, with two-thirds under the age of 30. Hydrocarbons have long been the economy’s primary driver. The country is the world’s sixth-largest gas exporter, and has the 10th-largest natural gas reserves. However, as a result of the recent drop in hydrocarbons prices, GDP growth softened to 3.9% in 2015, while the fiscal deficit doubled in the same year. The government made moves to trim spending in 2016, but ring-fenced a number of capital projects to ensure productive investments continue. Algeria has maintained an impressive degree of stability, with the government focusing on helping to stave off further unrest in the region and working to strengthen the country’s baseline economic indicators. This chapter contains interviews with President Abdelaziz Bouteflika; Greg Hands, UK Minister of State for International Trade; and Akinwumi Adesina, President, African Development Bank.
Explore chapterEconomy
The largest economy in the Maghreb, Algeria is also the region’s wealthiest country in terms of purchasing power parity-adjusted per capita. Hydrocarbons are the mainstay of economic activity; however, amid slowing production and exports, as well as the sharp drop in oil prices since mid-2014, the government is taking a range of measures to develop other sectors, with a particular focus on industry, agriculture and tourism. These should bolster diversification efforts that will have long-term benefits, in particular given anticipated falls in oil and gas production over the coming decades, and the long-term prospects are positive. This chapter contains interviews with Ali Haddad, President, Forum des Chefs d’Entreprise; Zied Ladhari, Tunisian Minister of Industry; and Jaime García-Legaz, Former Secretary of State for Trade.
Explore chapterEnergy
As Algeria attempts to curb the impact of the global downturn in oil prices and sustain economic growth, boosting hydrocarbons production to make up for lower prices and keep pace with rising domestic demand is a priority. Making the market attractive to foreign investors is fundamental to raising production, as are measures to ensure sustainable consumption of energy. With two-thirds of the territory still unexplored and the EU export market next door, there is still plenty of scope to expand both production and revenues even amidst the current low price environment. This chapter contains a viewpoint from Noureddine Boutarfa, Minister of Energy; and interviews with Akli Brihi, Maghreb Cluster President, Schneider Electric; and Amine Mazouzi, CEO, Sonatrach.
Explore chapterFinancial Services
While it has grown more than five-fold since the 1990s, Algeria’s insurance industry remains small relative to the size of the economy, with low penetration and density ratios. The sector sees more than half of its profits from automotive coverage, though the life segment has grown swiftly in recent years. Improvements to automotive claims processing and determined efforts to resolve the claims backlog should help rehabilitate the insurance sector’s image somewhat in 2017, and relieve it of a long-standing financial burden. This will allow insurers to focus on expanding promising assistance and SME-tailored products, as well as products across the life segment. This chapter contains interviews with Mohamed Loukal, Governor, Bank of Algeria; Adnan Ahmed Yousif, President and CEO, Al Baraka Banking Group; Yazid Benmouhoub, General Manager, Algiers Stock Market; Mohammed Khelfaoui, Managing Director, Tell Markets; and Mokhtar Naouri, CEO, CASH Insurance.
Explore chapterIndustry & Mining
The largest country in Africa, Algeria remains mainly underexplored as regards non-hydrocarbons mineral deposits, pointing to major potential opportunities in the mining sector. The authorities are keen to develop the industry, not only in order to boost minerals output itself, but also to provide raw materials for a range of emerging industries. The new mining law and the incentives it contains should help to attract additional interest, while new rail connections should ease logistics connections for miners’ output. This chapter contains interviews with Ali Boumediene, CEO, Bomare; and Reda Hechelaf, CEO, SOPI.
Explore chapterConstruction & Real Estate
Faced with a significant deficit of affordable housing in urban centres, all eyes are on the nation’s housing projects and the authorities’ ability to deliver more than 1.6m housing units by 2019 in spite of the low oil price environment which has had a significant impact on government revenues and budgets. Nevertheless, the real estate sector offers multiple investment opportunities as the country’s retail and tourism sectors continue to develop. Private developers can also play a vital role in helping to meet the continued demand for low-income, quality housing. This chapter contains an interview with Boudjema Talai, Minister of Transport and Public Works.
Explore chapterTransport
Transport infrastructure in Algeria, which is the largest country in Africa, has been going through a process of transformation since the early 2000s, with tens of billions of euros channelled into infrastructure projects. In recent years, despite the pressures exerted on government spending as a consequence of declining hydrocarbons revenues, transport networks have remained an investment priority, as Algeria targets boosting domestic production and developing its non-oil economy. Numerous projects already under way are set to bring about major improvements in both domestic and international transport and logistics infrastructure, helping to boost the development of the wider economy, while potential new financing models may provide opportunities to further develop the sector in the coming years. This chapter contains interviews with Michael Hamelink, CEO, Aigle Azur; and Rachid Ghezlaoui, CEO, Transrafa.
Explore chapterTelecoms & IT
Internet infrastructure and usage have developed rapidly in Algeria in recent years, helping to pave the way for the growth of IT segments. The sector, however, is about to enter a challenging period as a result of reductions to government spending. Despite the impact this is likely to have, ICT is likely to remain a strategic priority in years to come, as the government seeks to capitalise on the sector’s high potential in line with its efforts to diversify the country’s economic base. This chapter contains interviews with Mouatassem Boudiaf, Deputy Minister for Digital Economy and Financial System Modernisation; and Nunzio Mirtillo, Head of the Mediterranean Region, Ericsson.
Explore chapterSétif
With the nation’s largest industrial park set to be built in Ouled Saber, Sétif is set to benefit from an increasing flow of private and public investment into sectors such as electronics, automotive and agri-industry. The new enterprises emerging in the Sétif region will provide employment opportunities for thousands of people, while also advancing the province’s importance as a key contributor to Algeria’s economy.
Explore chapterAgriculture
Algeria has been taking active steps to lower its food import bill and improve local agriculture production. That being said, the government continues to face challenges in areas such as land appropriation and financing. Given its sizeable agricultural land potential and current development programmes, Algeria is ideally poised to be an exporting country for agricultural produce. Developing a smart export policy and system based on intensive agriculture will be crucial going forward. This chapter contains interviews with Abdesselam Chelghoum, Minister of Agriculture, Rural Development and Fisheries; and David Blumberg, CEO, Blumberg Grain Middle East & Africa.
Explore chapterTourism
As Algeria seeks to rapidly diversify its economy, the government has singled out tourism as one of five priority sectors for investment. But building a reputation as an international destination in a competitive global market, while overcoming regional security concerns, a chequered global economic landscape and a long-neglected national tourist infrastructure, will prove challenging. While the drive to spark a building frenzy appears to have finally materialised after years of limited action, auxiliary services and personnel training may still lag behind, impeding progress. Nonetheless, both local and foreign investors have shown an interest in new ventures, and many are determined to do what is necessary to continue developing Algeria’s vast tourism potential. This chapter contains an interview with Simon Stamper, Director of Operations, Africa, IHG.
Explore chapterEducation & Health
Algeria has made significant strides to improve access to quality medical care and tackle communicable diseases. While basic health indicators are very good, the changing socioeconomic landscape and improved living standards have coincided with a rise in chronic diseases such as diabetes and cancer. Years of accumulated oil revenues have enabled the government to fund the health care system generously and invest heavily in clinics, hospitals and preventative measures. Yet despite the progress made, there is still room for improvement given the country’s changing health issues and health care needs. This chapter contains interviews with John Chrosniak, President, DuPont; and Dow R Wilson, CEO, Varian Medical Systems.
Explore chapterTax
In conjunction with Mazars, OBG explores the taxation system, examining Algeria’s investor-friendly environment. The chapter includes a viewpoint from Samir Hadj Ali, Chartered Accountant and Managing Partner, Mazars Algeria, on corporate income tax rates.
Explore chapterLegal Framework
OBG introduces the reader to the different aspects of the legal system in Algeria, in partnership with Gide Loyrette Nouel. Samy Laghouati, Partner, Gide, on the new investment code.
Explore chapterThe Guide
This section includes information on hotels, government and other listings, alongside useful tips for visitors on topics like currency, visas, language, communications, dress, business hours and electricity.
Explore chapterTable of Contents
There are no articles in this chapter. To view the table of contents, please open click the "View in online reader" link above.
