Algeria Economy Overview


Basic data
Capital Algiers
Population 4million
Language Arabic, Berber and French
Religion Islam
State system semi-presidential republic
Head of State Abdelmadjid Tebboune
Head of government Aïmen Benabderrahman
Currency name Algerian Dinar (DZD)
Travel
Time shift CET (winter time all year round)
Economy 2021
Nominal GDP (billion USD) 532.5
Economic growth (%) 3.9
Inflation (%) 6.6
Unemployment (%) 16.9

According to Shopping Picks, the People’s Democratic Republic of Algeria has long been a world energy powerhouse, possessing the 10th largest gas reserves, the 3rd largest untapped shale gas reserves, and unsurprisingly the 6th largest gas exporter in the world. The oil powerhouse, with the world’s 16th largest oil reserves, exports more than half of its output. The Algerian government has been striving for a long time to reduce expenses for the import of goods and services, in which it seeks the cause of the economic recession, which was noticeably accelerated by the drop in oil prices at the turn of 2014/2015. Dwindling reserves of foreign exchange (USD 45 billion at the end of 2020) have been behind many restrictive foreign trade policy adjustments in recent years, from import bans to complex licensing procedures for local production, quotas and so-called super tariffs. This is also related to an increase in the credit riskiness rate, and also the long-term low ranking of ADLR in the DoingBusiness ranking at 157th place (out of 190 assessed markets). Like many other monocommodity economies, the ADLR is looking for ways to diversify its economic model. In the last year, therefore, the government has taken both the traditional route, towards the extraction of other mineral resources and their processing, and no less also the innovative route towards the model of the knowledge economy and start-ups. The 2020 economic development plan therefore presents a new sectoral focus of the economy, namely on the triptych of food self-sufficiency, energy transition and the digital economy. It is, however, still the oil industry, which in the medium term represents the basis of economic balance and the guarantee of geostrategic independence. The Hirak People’s Movement, which formed in the country in February 2019, partially succeeded in preventing A’s 5th mandate. Bouteflika, and created enough pressure on the government to uncover many corruption cases and remove the descendants of the Bouteflika regime from leading positions on the political scene, as well as from the top management of state enterprises. Algeria’s comparative advantage is its geographical location and easy accessibility from Europe (a flight with a transfer takes a total of 7 hours), but also its proximity to sub-Saharan markets. The low cost of labor (minimum wage – 150 USD/month, engineer – 670 USD/month) and a young, relatively educated population (HDI 82/189 → potential for start-ups) are among the strengths of the region. When opening a company and setting up production, you can look forward to a relatively high-quality infrastructure, as well as a low price of energy from fossil and solar sources – 5 USD / Kwh including taxes (→ especially in energy-intensive production). Traditional disadvantages of Algeria include overburdened bureaucratic processes and poor knowledge of international business culture on the part of local partners. The outdated and unreliable banking system requires the exporter to be careful and use only bank letters of credit. Dynamic changes in the introduction of trade barriers and hard-to-identify political-economic trends are among the indisputable disadvantages of trading in the region. Opportunities include a significant public procurement market, ongoing investments in infrastructure projects that further improve the country’s transport potential (East-West highway, El Hamdania port, reconstruction of the trans-Saharan highway) and world-leading potential in the field of RES, especially in solar energy. to have Algeria even 8 times more potential than it has in gas deposits. Finally, among the threats to exports to Algeria, we count relative political instability (with regard to the last 2-3 years), lack of tools to fight unfair competition (anti-dumping, protective procedures – intellectual property, anti-subsidy tools) and non-transparent and frequently changing conditions for economic subjects. Algeria’s traditional skepticism towards the international system goes through waves when the government is inclined to these steps, and then turns away from the idea and draws (as of 2020) financing instead from the Islamic Development Bank, where it is the second largest capital shareholder. In recent years, the Algerian government has resorted to an expansionary monetary policy in the form of printing fiat money, which helped it survive the period of low oil and gas prices in the years 2014-2021, but it does not solve the essence of the problem – the dependence of the state’s income on the sale of oil and gas abroad, as these incomes fluctuate significantly over time. From 2021, the ADLR is turning towards promoting its own exports outside of oil and gas, loosening investment rules and providing numerous tax breaks to start-ups. After many years, the private sector is thus viewed as a legitimate partner of the state and the basis of the national economy.

Practical telephone numbers (emergency services, police, firemen, information lines, etc.)

Emergency room: 213

Firefighters: 14

Police: 1548

Gendarmerie: 1055

Information line: 19

Consular emergency of the Embassy of the Czech Republic in Algiers: +213 770 899 090

Important web links and contacts

Authorities

  • Office of the Prime Minister with links to ministry websites: www.premier-ministre.gov.dz/fr
  • central customs administration Direction Générale des Douanes: www.douane.gov.dz
  • commercial register Center National du Registre de Commerce: https://sidjilcom.cnrc.dz/
  • Office National des Statistiques: www.ons.dz
  • investment promotion agency Agence Nationale de Développement de l’Investissement: www.andi.dz
  • chamber of commerce and industry Chambre Algérienne de Commerce et d’Industrie: www.caci.dz

Business associations

  • industry and trade association Forum des Chefs d’Entreprises: www.fce.dz
  • Association Générale des Entrepreneurs Algériens: www.agea-dz.org
  • association of Algerian exporters Agence Nationale de Promotion du Commerce Extérieur: www.algex.dz
  • business association Cercel d’Action et de Réflexion pour l’Entreprise: https:/care.dz/fr/care

Information Sources

  • TSA-Tout Sur l’Algérie /censored in selected regions/
  • Djazairess
  • Maghreb Emergent
  • El Watan
  • APS-Algérie Press Service
  • El Moudjahid
  • Expression
  • Cresus
  • Algeria360

Transport companies

  • Algerian airline Air Algérie: www.airalgerie.dzalgierské
  • sea ​​ferries Entreprise Nationale de Transport Maritime de Voyageurs: https://algerieferries.dz
  • Algerian Railways Société Nationale de Transports Ferroviaires: www.sntf.dz
  • state transport enterprise AOTU (includes ETUSA-buses, SETRAM and EMA Metro, ETAC cable cars, ENTMV boat connections, railway SNTF: www.aotu-alger.dz

Algeria Economy Overview

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