One can’t talk about Algeria without mentioning its role as energy leader. With 70 percent of its population under the age of 35, the largest country in Africa, the Mediterranean Rim and the Arab world has more than enough energy to channel and to sell. But at what price? Since 2014, oil prices have plummeted by as much as 50 percent.

The country indicators may be struggling, but spirits are high. For every $1 drop in the median price of a barrel, $600 million worth of revenue evaporates from the country’s coffers every year. For the 18th-largest producer in the world, these drops in the price of oil could mean a catastrophe, as more than $80 billion of Forex reserves have been lost in the last two years. Nevertheless, Algiers absorbed the loss and refused to cut its development programs or social policies.

Its growth potential and stability make the nation a noteworthy case in the MENA region. But with 97 percent of its GDP derived from hydrocarbons, how does the country manage?

Amid difficulties and adverse circumstances, it’s a matter of resilience. If you see an obstacle as a barrier instead of a launch pad, you don’t see Algeria clearly. “To manufacture remains a difficult commitment” said Ali Boumediene, chief executive of Bomare, a leader in electronics manufacturing.

“It’s not easy at the beginning. But from beginning to end, we’ve learned the ropes of the job in this environment. Our determination has become greater, as our ambition and expertise continue to grow,” said Boumediene, who manufactures Algeria’s second largest brand of mobile phones.

The private sector contributes around 80 percent of the GDP and pushes to invest in new niche positions and state monopolies like aviation, or even hydrocarbons.

“We are in a country of free trade, but the economy is mainly under state control. If you want to do business you don’t need authorization unless you produce or manufacture something. To have that authorization isn’t easy. So it means there are very few of us,” said Abdelouahab Rahim, chairman of Arcofina Holding.

“In Algeria, we believe in the virtues of pragmatism and common sense, and we affirm that the economy of our country and its laws guarantee proper business conditions for any operator,” said Abdelaziz Bouteflika, President of Algeria.

Everything is possible

Alger Marina Bay, the future business district on the outskirts of the capital, is taking shape on 75 hectares at Pins Maritimes, in an alluring project that will completely change the eastern face of the city. Abdelouahab Rahim intends to make this seaside urban complex a landmark attraction that includes an aquatic park and a marina able to hold up 700 boats, restaurants, boutiques, a shopping mall, upscale apartments and hotels. The entrepreneur strives to make it the greatest real estate project in the Maghreb region. “Alger Marina Bay is proof of what we are capable of doing,” he said. To re-launch productive investment and growth, Arcofina creates 3,500 direct hires and 500 jobs a year.

Now, what about the crisis? Algerian entrepreneurs don’t complain about it. Their biggest nightmare is bureaucracy and the informal economy; the whole of the private sector suffers from it, although it remains dynamic and the greatest supplier of jobs, as it continues to absorb an ever-growing working force.

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A new model for growth

At less than 50 dollars a barrel, income is shrinking. Today, black gold doesn’t generate more than 21 billion dollars in net profit a year for Sonatrach, the national hydrocarbons company.

The energy transition cannot wait any longer. Even as the largest gas producer in Africa and 9th largest in the world, the country foresees $60 billion of investment in the next 14 years in solar and wind power. In addition to environmental benefits, this has a lot to do with saving and stockpiling some 300 billion cubic meters of natural gas between now and 2030 to prepare for future domestic consumption.

The state plans to put foreign investors in competition with each other to build large-scale electrical infrastructure. Diplomatic efforts are ongoing to service the economy, and are already playing a role in negotiations to aid stability in the continent. Algeria can count on its army as one of the best prepared and best equipped in the region. Its experience in the fight against terrorism and radicalization makes it a key partner for the United States and the rest of the world.

Abdelaziz Bouteflika, President of Algeria

Along the Trans-Saharan road, Algeria will become an economic engine on the continent and a platform for exports to Africa. It will complete its part of the continental highway in 2018, when 9,500 kilometers of road will link six African countries. A massive project for a mega-port will add to this powerful development: El Hamdania, the largest port on the Mediterranean Sea, will connect Algeria to Africa, Southeast Asia and the Americas.

Our entrepreneurs dream with their eyes open. They know that there are no economic miracles. They know the importance of private investment, and they’ve come to believe in the boom of their capital investments.

Outlook on Algeria

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WHAT’S HOT

  • Strategic opening on the African market
  • Top-notch transportation network
  • Low energy costs
  • 40 million consumers
  • Active SME fabric
  • Investment incentive policy
  • Qualified labor force
  • Political stability

WHAT’S NOT

  • The 51/29 law
  • Bureaucracy
  • Legal instability
  • Repatriation of dividends
  • Real Estate deficit
  • The informal sector

HOUSTON (United States)- Minister of Energy Nourredine Bouterfa said Wednesday in Houston, United States, a national and international invitation to tender will be launched shortly for a photovoltaic solar energy plant project with a capacity of 4,000 megawatt.

The tender call is being finalised, Bouterfa said in an opening addtess at the Algerian-US Forum on Energy held in Houston, Texas.

The mega project includes the building of power plants and local manufacturing of equipment and materials intended for the plants, he disclosed.

The renewable energies programme is a major generator of jobs and will highly contribute to industrialization, technological development and acquisition of skills, giving a boost to the country's socio-economic development, Bouterfa said.   

He added that an important national plan for the development of renewable energy is underway. 

 

The plan will put in operation nearly 22,000 MW in green energy by 2035-2040, the minister told the managers of American companies attending the meeting. 

 
Thursday, 15 December 2016 10:28

 KIGALI - The African Investment and business Forum, scheduled from 3 to 5 December 2016 in Algiers, is a contribution that is part of the implementation of the African Union’s Agenda 2063, said Friday in Kigali (Rwanda), Minister of State, Minister of Foreign Affairs and International Cooperation, Ramtane Lamamra.

 "We informed the participants at the 29th meeting of the AU Executive Council (whose proceedings wrapped up Thursday night) about the details of the contribution, which is in line with the African Union Agenda 2063," Lamamra told APS.

Algeria represents Algeria in the preparatory meetings of the AU Conference of Heads of State and Government (17 and 18 July).

The African Agenda 2063 particularly provides a program to double the intra-African trade by 2022.

Lamamra said that 2,000 people will take part in this meeting which will be attended by public and private African operators.

"This is not a diplomatic conference, but an operational conference. It is a ‘business to business’ encounter for intra-African investment and trade," he said.

The Algerian top diplomat had recently indicated that the holding of this Forum is part of Algeria's policy in Africa, led by President of the Republic, Abdelaziz Bouteflika, aimed at strengthening its place in the continent.

 
Friday, 15 July 2016 18:12

WASHINGTON–Algeria numbers among the five African countries having invested the most in the public-private partnership projects (PPP) during past 15 years, according to the 2016 report on the economic development in Africa, released Thursday by the UNCTAD.

Algeria is ranked fifth in terms of investment volume made as part of the public-private partnership projects with an amount reaching $13.2 billion during the period 1990-2015, said the UN Conference on Trade and Development (UNCTAD) in its report.

Algeria lags behind Nigeria, Morocco, South Africa and Egypt, according to this study which examined the public-private partnership projects progress in 52 African countries.

The UNCTAD indicated that these five countries alone account for almost two thirds of the total value of African investments in the context of PPP, while half of the continent (27 countries) has invested less than a billion dollars.

The PPP projects launched in Africa range from simple service contracts to large scale concessions, through infrastructure creation projects.

The majority of partnerships, namely 70%) focus on infrastructure development, according to UNCTAD.

Besides, Algeria is ranked among the least indebted countries in Africa, said the report which deals with the complex problems of growth in Africa and its needs in terms of financing.

Between 2011 and 2013, Algeria’s foreign debt has represented 2.8% of the national income, i.e. $5.59 billion, according to UNCTAD figures.

 
Thursday, 21 July 2016 19:05

ALGIERS- Algeria-Africa Economic Forum will be held from 3 to 5 December in Algiers, announced Monday in Algiers Minister of State, Minister of Foreign Affairs and International Cooperation Ramtane Lamamra.

Lamamra was speaking during a press conference he jointly hosted with Minister of Industry and Mines Abdessalam Bouchouareb and Minister of Trade Bakheti Belaib and President of the Business Managers Forum (FCE) Ali Haddad, following a meeting dedicated to the preparations for this meeting.

The meeting, which will see the participation of Several African countries, has been adjourned due to the internal and external conditions, explained Bouchouareb.

"The organization of this forum is part of Algeria's policy in Africa, led by President of the Republic Abdelaziz Bouteflika, aiming at strengthening its position in the continent and contributing to its integration, notably in the economic field, "Lamamra said.

"African countries remain attached to Algeria, which has enormous potentialities to conquer this vast market on the commercial side but also in terms of investment," he said.

The meeting will bring together, for the first time, businessmen from several countries of the continent, to explore new opportunities for economic partnership, especially in the industrial sector.

It is also part of Algeria’s new economic model of growth, which banks on the economic diversification by reducing the country’s dependency on hydrocarbons, said Lamamra. 

 
Tuesday, 12 July 2016 10:31

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African Investments and Business Forum : Algiers Meeting 3 to 5 December 2016

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