Meeting the demand for transport infrastructure in Africa’s largest country is a priority for the government of Algeria. In 2015 the country began unfolding its current five-year development plan, a major sector reconfiguration programme that allocates AD832.7bn (€6.9bn) to the upgrade, extension and construction of strategic segments, primarily maritime and rail. The strategy builds on previous advancements that aimed to boost production and diversify the country away from hydrocarbons. Still, diversifying the economy depends on Algeria’s capacity to utilise modern, intermodal transport connections, open the country to regional markets, gain international competitiveness and ensure domestic mobility.

The fall in international oil prices has slowed down the sector transformation process. Traffic congestion and over-dependence on road transport, inefficiencies in maritime freight management and a growing demand for urban transport are among the priorities to be tackled. Nevertheless, the sector remains a key contributor to the economy, with transport and communications accounting for approximately 10% of GDP during the 2009-16 period.

Higher Investment 

The sector is set to benefit from a rise in investment, Abdelghani Zalène, minister of transport and public works, told local media in November 2017. The 2018 Finance Law allocates the sector AD380.76bn (€3.2bn), a 507% increase on 2017. These funds will be directed to large-scale projects such as the port in Cherchell (AD150bn, €1.2bn); maintenance of roads, ports, airports and railways (AD65bn, €539.1m); the construction of new roads in remote areas (AD28bn, €232.2m); and transport upgrades in Algiers (AD6.5bn, €53.9m). In addition, an estimated AD178.15bn (€1.5bn) will be spent on completing existing projects.

Sector Reorganisation 

To meet performance goals and organisational standards, the government laid out a plan in 2014 to restructure and centralise all maritime transport companies that operate in the public sector. In early 2016 four public groups emerged to focus on different areas of transport. Serport, holding AD54bn (€447.9m) in capital, manages port services through 10 companies and one management company for fishing ports. It also handles port logistics through three joint ventures pertaining to container management.

Meanwhile, Logitrans Group, with AD2bn (€16.6m) in total capital, is in charge of logistics and the transport of goods, and holds seven subsidiaries of the National Company of Road Transport. Transtev, the third group, holds AD3bn (€24.9m) in capital and manages ground passenger transport via metro, tramway, cable car and bus. The fourth group, the Algerian Maritime Transport Group (Groupe Algérien de Transport Maritime, GATMA) is responsible for all maritime transport – both passenger and cargo – as well as ship repair. With AD22bn (€182.5m) in capital, GATMA became operational in early 2017 as Compagnie Nationale Algérienne de Navigation (CNAN), and several national shipping companies and subsidiaries were regrouped.

Maritime Transport 

Some 95% of the country’s freight movement takes place via sea transport, and container ship transit represents the cornerstone of Algerian port activity. With a coastline extending around 1200 km, Algeria is home to 11 commercial ports – of which Algiers, Oran and Annaba attract most of the activity – and accommodates a total movement of merchandise surpassing 130m tonnes per year. Therefore, upgrading port infrastructure and utilising logistics platforms to gain efficiency and dynamism is at the core of the government’s strategy to compete in the Mediterranean.

Despite government efforts and budget allocations to diversify the sea freight companies, some deceleration was noticeable in third quarter 2017 figures, with a slight decrease in volumes at the Port of Algiers mainly due to import quotas. Some 551 ships docked in the port that quarter, according to Entreprise du Port d’Alger, 5.5% less than in the same period in 2016. Although the government aims to boost exports, imports continued to represent the bulk of goods passing through the port, at 84% of the total. They increased by 1% during the quarter as a result of rising volumes of cereals.

China is the main exporter to the country, holding a nearly 18% share of total incoming product value in 2016, according to the World Bank, followed by European and Latin American countries. Brazil, for instance, has been growing its business relationship with Algeria in recent years, and exported over $1bn to the African country in 2015 and 2016. On the other side of the relationship, $1.6bn worth of Algerian products flowed into Brazil in 2016, a 10% decrease on 2015 volumes, Salaam Gateway, a market researcher focused on Islamic countries, reported.

It is not unusual for vessels to return to their origin empty as export activity remains low. The government is working to reverse this trend by supporting exporters such as Fertial (an Algerian-Spanish partnership covering petrochemicals, agriculture and industry) and Cevital (the primary private exporter and largest conglomerate), the latter of which is aiming to export $3bn in goods in 2020. “Logistics companies are hoping for an increase in exports in the short term,” Abd El Illah Melaika, county manager for DHL, told OBG. “Given that hydrocarbons comprise 97% of all exports, it is a relatively small market for competition.”

Shipping Capacity 

Algeria’s merchant marine fleet carries less than 3% of the annual 130m-tonne volume that passes through the country’s ports. This illustrates a clear opportunity in transport activity. Through the National Marine Fleet Development Plan, CNAN, now under GATMA, added a new vessel to its existing eight cargo ships for its subsidiary CNAN Nord in July 2017. Built in China with a capacity of 12,000 tonnes – or 800 containers – the ship’s purchase is one of the latest moves in the pursuit to increase national maritime freight’s market share to 30% by 2020 through the acquisition of cargo ships. The plan outlines the purchase of 25 new ships: 18 for CNAN and seven for another subsidiary, CNAN Med.

Bader Righi, CEO of GATMA, told OBG, “One of the main points of our strategy is to target the potential of freight transport, in particular the transport of inputs and outputs from the industrial and agri-food sectors, including cereals for the Algerian Inter-Professional Cereal Office.” According to Righi, in 2015 Algeria imported nearly 15m tonnes of cereals. “That is why our ship-owning subsidiaries will acquire four bulk carrier vessels to transport cereals, and the freight will be payable in dinars, which has the advantage of saving foreign currency reserves and improving the country’s balance sheet,” he said.

However, Boudjema Talai, the then-minister of transport and public works, acknowledged in early 2017 that more action should be taken. He told local media that maritime business associations needed to work with foreign companies to build the fleet and improve the sector’s competitiveness.

CNAN Nord has already takes steps in this regard, signing an agreement with the France-based global maritime leader CMA CGM Group in November 2016 to develop its shipping capacity. The agreement focuses on operational and logistical cooperation, comprising provision of container equipment, space for Algerian products on CMA CGM’s ships, and the exchange of expertise and training. The deal could also allow access to a shipping line that links Algeria to northern European countries.

In August 2017 CMA CGM announced the launch of a new maritime service, Black Sea Med Express, to connect the Black Sea and the Mediterranean. The company will operate the service from Annaba and two other Mediterranean ports.

In mid-November 2017 CNAN Med and Turkish shipping company Arkas signed an agreement to transport completely knocked-down parts for Renault Algérie’s production unit in Oran. This shared fleet programme will connect the Romanian port of Constanta and Russia’s Novorossiysk with the Port of Arzew in Algeria via the Turkish hub of Marport. Three vessels with a total capacity of 1700 twenty-foot equivalent units will be dedicated to the line.

Air Travel

Algeria is in the process of upgrading its air travel segment by expanding its flight connections and developing domestic airport infrastructure. Large budgets have been allocated from the national Treasury to the nation’s 35 airports, 13 of which operate international flights. The country’s aim to boost tourism, and air travel overall, is expected to see major results in 2018. Major expansions of the two largest airports are under way. The new terminal at the country’s largest airport, Algiers’ Houari Boumediene Airport is expected to be completed in 2018. For the country’s second-largest airport, the Ahmed Ben Bella Airport in Oran, work on a new terminal that began in 2013 has taken off in 2016 and 2017. Construction works at Algiers’ Houari Boumediene Airport were 75% complete as of September 2017, according to local media reports. The contract was granted to China State Construction Engineering Corporation, which is also responsible for building the adjoining 4500-vehicle parking lots. The works will boost annual passenger capacity from 6m to 10m.

The new AD90bn (€746.5m) terminal will accommodate all international flights, while Air Algérie’s domestic connections will operate from the existing terminal. The airport will have the capacity to welcome more international air carriers and expand Algeria’s regional air transport links, opening up additional market opportunities. The international airport will be connected to the Algiers city centre via a 9.5-km metro line built by the state construction group Cosider (see analysis). Initially expected to be completed by 2019-20, the rail link is now forecast to be operational in 2021 due to difficulties encountered on the ground, Zalène told local media in September 2017. When completed in 2018, a 3-km railway link running from the capital’s Bab Ezzouar station will also provide freight transport to the airport.

To ensure a competitive performance for international flights at Oran’s Ahmed Ben Bella Airport, the new terminal will be able to handle 3.5m passengers per year when completed, up from an initial estimate of 2.5m. The facility is expected to be operational by the end of 2018. The project also includes the modernisation of the current terminal, and aims to transform the airport technologically through the use of advanced hangars and storage facilities. The goal is to increase the airport’s cargo capacity from 2000 tonnes per year in 2016 to 15,000 upon completion.

Strengthening the country’s ability to carry out export activity via air is indeed a priority. Alongside Oran and Algiers, there are a number of projects in the government’s pipeline to enable the country’s airports to handle freight cargo, in line with the national 2015-19 growth strategy.

Youcef Safir, CEO of Etablissement National de la Navigation Aérienne, told OBG that Algeria would highly benefit from the creation of an air transport hub in Tamanrasset, in the far south. “It would make sense geographically to connect sub-Saharan countries with the Middle East and Europe. Nonetheless, inter-African air traffic will only grow as the politic stability of the region increases,” he said.

Expanding Fleet & Reach

Algiers’ Houari Boumediene Airport welcomes more than 6m passengers per year. The dominant airline is the flag carrier, Air Algérie, which set in motion a €600m investment plan for the 2013-17 period to enlarge its fleet. This started with the acquisition of three new planes with a capacity for 150 passengers each and the ordering of two new cargo planes. In 2017 the airline began unfolding its 2025 strategy. With the aim of expanding its current fleet of 59 aircraft between 2018 and 2025, the company plans to charter an Airbus A330 and purchase 40 airplanes for its long-haul itineraries, which include new connections in Africa, such as the agreement reached with Gabon in April 2017 to establish a route between Algiers and Libreville for both passengers and cargo. The carrier also expects to sign agreements with Chad, Ethiopia, Benin and Togo. In addition, Air Algérie switched to the integrated Amadeus booking system in May 2017, which should enhanced its booking capacity and efficiency.

In May 2017 Tassili Airlines, the second state-owned airline and a subsidiary of oil and gas company Sonatrach, announced it was negotiating with US aircraft manufacturer Boeing to establish aircraft equipment production in Algeria. Tassili has also announced it will acquire three Boeing 737-800 for $294m. The purchase will enable the airline to engage in the transportation of hydrocarbons, increase its passenger connections, mainly to France, and open further routes in Africa. The aircraft are expected to begin operating in September 2018.

While Air France and Turkish Airlines are the other main companies operating flights in the country, Iberia-British Airways and Vueling – Iberia’s low-cost carrier – have a presence too. In July 2017 Air Canada launched direct flights from Montreal to Algiers. Airlines operating in Algeria have identified a transformation in the country’s air travel culture. While peak levels were recorded during seasonal periods of previous years, it seems that more sustained activity is now taking place throughout the year.

Road Network 

Back on the ground, Algeria enjoys one of the most modern road networks in Africa thanks to state investment efforts. The iconic, 1216-km six-lane East-West Highway crosses the country from its border with Morocco to Tunisia. The national 2015-19 development plan aims expand the existing road system by another 5600 km.

Despite budgetary constraints, regional projects are steadily connecting the country. The last remaining section of the East-West Highway running between the town of Drean and the Tunisian boarder will be completed in early 2019, Zalène told local media in November 2017. In the wilaya (province) of Béjaïa, meanwhile, the construction of a 1700-metrelong tunnel in Sidi Aïch will grant access to the 100-km route linking Tala Hamza, El Kseur, Sidi Aïch, Amalou, Akbou, Tazmalt and M’chedallah to the East-West Highway. Payment delays have posed some challenges for the Chinese firm building the tunnel. However, in July 2017 wilaya officials and a representative of Algeria’s motorway agency, Agénce National des Autoroutes (ANA), pledged to catch up on payments.

The crown jewel of Algeria’s road network is the 4500-km Trans-Saharan Highway, more than 2300 km of which lie in the country. Algeria’s portion of the $3bn regional project is set for completion in 2019. According to the Trans-Saharan Road Liaison Committee, only 600 km of the Algerian RN1 segment – the principal north-south road axis – remain to be completed. The route also branches out to Mali with a 500-km road, of which 300 km has been finished. Plans to connect Algiers with Lagos in Nigeria will further improve links to sub-Saharan countries.

European Links

Algeria signed a cooperation agreement in July 2017 with the European Investment Bank (EIB). The accord focuses on the reinforcement of security aspects along the Tran-Saharan Highway. In an exchange of know-how, the EIB will conduct a study of the country’s main roads, including a road safety audit concerning the East-West Highway – particularly the 1500-km segment linking Oran to Béjaïa.

The EU and Algeria have collaborated to develop the latter’s transport and logistics strategy through several initiatives, such as the €4.5m Logismed Soft regional programme. In cooperation with the European Commission and ANA, Algeria received €2.5m in funding. The role of the EU in implementing Algeria’s transport plans includes strategic financing support for road developments and the Port of Béjaïa.

Rail Extension 

The rail network is another central axis for freight and passenger movement. To drive socio-economic development, the government plans to extend rail across the country by expanding the network (2300 km are under construction, according to the Ministry of Transport and Public Works), refurbishing wagons and reinforcing freight capacity. The National Rail Transport Company (Societé National des Transports Ferroviaires, SNTF) is the state company entrusted with the management of passenger and freight transport, and the Algerian Railway Company (Anserif), created in 2005, is responsible for the administration of the network’s infrastructure.

Algeria’s rail network extends for a total of 4575 km, of which 3854 km are in use. The breakdown in use varies by region. According to SNTF, 90% of movement in the north-western region of the country is passenger activity, whereas merchandise transport makes up 90% of the activity in the north-east. Several routes have been launched in 2017: In April 2017 SNTF announced the operation of the Algiers-Tizi Ouzou line, with a journey time of 80 minutes. The long-awaited reopening of the Annaba-Tunis line in May 2017 is set to boost opportunities for commerce and tourism. Initially scheduled for completion in August 2016, tunnels on the route had to be enlarged to accommodate modern locomotives, which will now travel at 160 km per hour (km/h). The Oran-Bachar and Oran-Saïda lines became operational in the same month, reaching speeds of 200 km/h.

New Carriers

Providing a modern rail service is a priority for SNTF, which owns 11,500 wagons for passenger and cargo services. To enhance capacity, the company is set to purchase 40 diesel-electric locomotives for cargo transport and 20 passenger autorail cars for cross-country and regional lines. The 2019 modernisation plan also entails the acquisition of 20 rail cars for the expansion of suburban lines.

Alleviating congestion and dependence on road freight transport is at the heart of SNTF’s strategy. To increase capacity over the next few years, SNTF will purchase 100 specialised wagons for cereals, 200 tanks for hydrocarbons, 100 cars for phosphate and 100 flat wagons for high cube containers. Aiming to reach a capacity of 20m tonnes of freight per year by 2020, the company is buying new locomotives with better traction from General Motors to ensure sufficient engine power going uphill. These acquisitions go hand-in-hand with SNTF’s strategy to have 12,500 km of operational rail lines by 2025.

One pillar of the strategy is attracting international investors. In July 2015 SNTF awarded French company Alstom a €200m contract to supply 98 diesel-electric train units. In 2016 the national rail company became the owner of a 10% stake in the Cital joint venture, comprising Alstom, holding 49%; Enterprise Métro d’Alger, with 10%; and Ferrovial of Spain, which reduced its share to 31% after it sold 10% to SNTF. Furthermore, SNTF has entered another partnership with General Electric to refurbish and modernise old locomotives with tourism in mind. Construction of new railways and upgrades to existing ones also present an opportunity to install repair shops and services along the routes. For example, Cital assembles, manufactures and maintains regional and inter-city trains, contributing to the rail network’s expansion.

Travelling Mindset

Algerians are travelling more, both domestically and internationally: SNTF has recorded an additional 1.5m passengers annually since 2006, reaching 37m passengers. The majority of travel (60%) takes place in the north, around the cities of Algiers, Oran and Constantine. Tunisia is the main destination for Algerians, with over 1.5m tourists heading to the neighbouring country annually since 2015. Travel on the rail line linking Algiers to Tunis, with a connection in Annaba, takes just six hours, although the line has seen technical difficulties that have affected the service. “Reopening the rail connection between Algiers and Tunis is a strategic move for both countries. It will also facilitate the journey for tourists that visit the neighbouring country every summer,” Djamel Adjout, vice-CEO of SNTF, told OBG.

SNTF has acknowledged the need to increase both efficiency and speed. Thus, Customs and border formalities will soon be done on-board during the journey. Furthermore, as part of its modernisation plan, the government has commenced evaluation studies for the construction of a high-speed train link, which would connect Algeria with Tunisia and Morocco.

With regard to sea transport, Algeria registered a 20% year-on-year (y-o-y) increase in the number of ferry passengers arriving from the Port of Marseille in France during the first half of 2017. Travelling by boat is increasingly popular; the Port of Algiers registered over 27,000 passengers in the first half of 2017, up 48% y-o-y. Competition in the segment is expected to increase if fares, which are widely considered overpriced, are lowered. A ticket from Marseille to Algiers costs an average of €591, three times the price of the Algiers-Tunis route. The development of multi-modal regional connections also bodes well for Algeria’s tourism sector, boosting the economy and creating employment opportunities (see Tourism chapter).


Quality service provision and modernisation are at the core of the nation’s transport strategy. South Korean technology company HB is developing a single-ticket initiative for Algiers’ urban transport system, unifying the multi-modal services under a single transport card. New e-payment methods are also transforming the way Algerians make their travel arrangements. According to SNTF, the launch of its online booking service has improved service provision and management; online payment will be the company’s next step.


There is considerable potential for further development of the transport sector if investment levels remain high, with north-south connections of particular interest. However, investments must be backed by political will to enhance infrastructure in a way that creates an attractive and competitive price-quality relationship. The higher budget allocation mandated by the 2018 Finance Law, the government’s diversification strategy and the ongoing industrial self-sufficiency policy should ensure the steady expansion of Algeria’s intermodal connections.