Economy
From The Report: Algeria 2017
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Despite the collapse of oil weighing heavily on the Algerian economy, it is still the largest and most prosperous in the Maghreb. Although it remains relatively closed, with foreign investors barred from taking majority stakes in local firms or projects since 2008, the private sector’s economic contribution has expanded significantly; it grew to 70% of GDP by 2015, and economic output increased four-fold over the same timeframe. While the oil price-induced fiscal difficulties facing Algeria have added pressure to efforts to improve living standards, they have provided a pressing incentive for the country to accelerate efforts to diversify away from hydrocarbons dependency and develop a more dynamic private sector.

This chapter contains interviews with Abderrahmane Raouya, Minister of Finance; Abdelkader Zoukh, Wali of Algiers; Ali Haddad, President, Algerian Business Leaders’ Forum; and Samira Hadj Djilani, President, Réseau Algérien des Femmes d’Affaires.

Articles from this Chapter

Overview

A way forward: The government endorses a new long-term approach to combat lower oil prices
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The collapse in oil prices has weighed heavily on the Algerian economy, giving rise to wide twin deficits in the budget and current account. Given that the state is still heavily involved in the non-hydrocarbons sector of the economy, but depends on hydrocarbons exports for the bulk of its revenues, it is unsurprising that efforts to close the budget deficit – which have been under way since the second half of 2016 – have slowed growth. Nonetheless, moves to lessen hydrocarbons dependency…

Analysis

Fiscal adjustments: Sweeping reforms seek to rebalance the budget as the country adapts to changing revenues
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Given that Algeria’s hydrocarbons sector accounted for more than half of government revenues in 2014, it is hardly surprising that the collapse in oil prices from 2014 onward has hit public finances. From 8% of GDP in 2014, the deficit ballooned to 15.8% in 2015, before moderating to an estimated 14% in 2016. Algeria was able to postpone the bulk of the necessary adjustment in the public finances for three reasons: its national debt was relatively low at 8.8% of GDP in 2015, meaning it…

Interview

Seeking alternatives: Abderrahmane Raouya, Minister of Finance, on stimulating the economy and the diversification of financial products
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Interview:Abderrahmane Raouya How will alternative financing be introduced to the economy, and what will the advantages be? ABDERRAHMANE RAOUYA: It will be introduced with three main objectives: bolstering state liquid assets, settling internal public debts and financing the National Investment Fund. The use of alternative financing will be backed by important structural reforms and will also allow the reimbursement of debts held by the Public Treasury. As a result, public creditors will…

Interview

Collaborative vision: Abdelkader Zoukh, Wali of Algiers, on how smart city developments are advancing the province’s growth agenda
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Interview:Abdelkader Zoukh In what ways is the wilaya (province) of Algiers an attractive area for investors? ABDELKADER ZOUKH: On top of being both the political and economic heart of Algeria – hosting the headquarters of central administrations, major companies and diplomatic representations – the wilaya of Algiers possesses significant natural and infrastructural assets. It is a geostrategic hub that has the potential to promote further European-African trade. It also has young and…

Analysis

Targeting diversification: Efforts to lessen dependence on hydrocarbons are under way, with the government implementing reforms and developing new policy frameworks
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The oil price-induced economic difficulties facing Algeria may prove to be a double-edged sword: although the added pressures are certain to slow the rate of improvement in living standards and have already begun to strain public finances, the new circumstances also provide a pressing incentive for the country to slowly wean itself off its hydrocarbons dependency develop a more dynamic private sector. While reform efforts have tended to move slowly in the country in the past, the IMF noted…

Interview

Unlocking potential: Ali Haddad, President, Algerian Business Leaders’ Forum (Forum des Chefs d’Entreprises, FCE), on private sector needs and encouraging young entrepreneurs
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Interview:Ali Haddad How does the FCE help strengthen relations between local businesses and foreign companies? ALI HADDAD: By representing more than 6000 companies, FCE maintains a close relationship with several similar entities abroad, including the Movement of the Enterprises of France, the General Confederation of Italian Industry, the Spanish Confederation of Employers’ Organisations in Spain, the National Mauritanian Employer’s Union, the Libyan employers and the Ivory Coast Business…

Analysis

Strength in numbers: Through increasingly supportive frameworks, small and medium- sized enterprises are driving non-oil growth
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Small and medium-sized enterprises (SMEs) predominate among Algerian firms, forming the backbone of the private sector. At end-2016 Algeria’s 1m SMEs employed more than 2.5m people and engaged in some AD75bn ($622.1m) in bilateral trade. According to the Ministry of Industry, Algeria created an average of 60,000 SMEs per year in the 2012-15 period, and there is evidence that the pace of business creation is accelerating. There was a net increase of 88,100 SMEs in 2016 alone – up 9.4%…

Interview

Leading role: Samira Hadj Djilani, President, Réseau Algérien des Femmes d’Affaires (RAFA), on the power of women in the economy
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Interview:Samira Hadj Djilani To what extent are women in Algeria involved in the country’s political system and governance? SAMIRA HADJ DJILANI: Historically, Algerian women have participated actively in the liberation of their country, as much as their male counterparts, and this generation of strong women has also greatly impacted society. For example, women in Algeria have always been a part of the constituent assembly, and now there are 143 female members of Parliament. Initiated by…