London presentation 25.10.17

London October 2017 || Maghreb Algeria | Presentation
Algeria: A Unique and Timely Opportunity
Yassine Bouhara- Chairman Tell Group

Algeria is the African, Arab and Mediteranean Giant

3 Last large Non Globalised Economies

The Maghreb

GNI per capita (constant 2000 $)
Source: World Bank

1977 Convergence

1989 The Fall of the Berlin Wall

Source: World Bank
GDP per capita (PPP) current international $

2000s The Rise of China, The Middle East and Central Asia

GDP per capita (PPP) current international $
Source: World Bank

4th Industrial Revolution

The Demographic Expansion of the Sahel

1990 2017 2050
Morocco 25 36 44
Western Sahara 0.2 0.6 0.9
Algeria 26 40 56
Tunisia 8 12 13.5
Libya 4 7 8.5
Mauritania 2 4.5 8
Mali 8.5 20 45
Niger 8 24 72
Chad 6 16 35
Maghreb 65.2 100.1 130.9
Sahel 22.5 60 152
Western Africa 181 376 798
The Demographic Expansion of the Sahel

Algeria is the African Giant
April 2017
Algeria
Largest country in Africa by area
Largest natural gas reserves in Africa
Largest oil crude reserves in Africa
Largest shale gas reserves worldwide
Largest energysupplier to the EU
1st
2nd
3rd
A country rich in RESOURCES
ACCESS to regional markets
7 Border markets: Tunisia, Libya, Niger, Mali, Morocco,
Western Sahara and Mauritania
Proximity to the European, African and Arab markets
Membership in the agreement of the Arab Free Trade
Area and Association Agreement with the EU
Nominal GDP in 2015
Real GDP growth rate vs world
average of 2.5% in 2015
GDP per capita in 2015 (PPP)
Largest holder of foreign currency
reserves after Saudi Arabia
External debt in 2015, compared to
US$25.3bn in 2000
$167 bn
3.9%
$14,532
2nd
ECONOMIC stability
Population in 2015
Urbanisation, the highest in North Africa
Middle Class population
Consumption expenditure growth in 2015
40m
71%
77%
9.3%
Favourable DEMOGRAPHICS
Macroeconomics REFORMS underway
2005 - 2014 infrastructure investments
Announced New Economic Growth Model in 2016,
aimed at diversification of economyfrom hydrocarbons
2011-2030 Renewable Energy Development
Programme to promote the renewable energysector
3rd
$3 bn
$500 bn
Source: IMF, World Bank, EIA, ANDI
4th

A Competitive Labor Cost Hub
Cost of Labor (US$ per hour, 2016) Electricity Cost (US$ per kwh)
0 2 4 6 8 10
Tunisia
Morocco
Algeria
Turkey
Portugal
Greece
Spain
France
Minimum Wage Rates, USD per Hour
0
0.05
0.1
0.15
0.2
0.25
Low Electricity and Labor Cost makes Algeria an Ideal Regional Hub for Energy intensive
Activities
Source: Tell , various sources

5%*
10%
71%
A wealthy Middle class
Très forte croissance de l’urbanisation
An educated and young population
Consumption Growth
41m Inhabitants
GDP capita 2015 (PPP)
75%
Middle class population
9ème Most populated in Africa
Expected urban growth 2015-
2025
Urbanised population
10m
Growth of Urban centers over the
last decade
Annualised Consuption
growth 2004-2014
« Optimal Consumption
zone »:
Consumption acceleration
$10k-20k (PPA)
$14k
Below 3572%
Source: World Bank
Source: Banque africaine de développement , Deloitte
ALGERIE
Attractive Demographics
And Social
$14k
Favorable Social and Demographics

A growing urbanization and a surge of large cities
ALGERIA’S URBAN POPULATION GREW BY NEARLY 10% OVER THE LAST DECADE AND IS
EXPECTED TO CONTINUE GROWING WITH THE CONSTRUCTION OF NEW METROPOLES
65% +21.5m
25% +9.5m
4% +3m
Annaba
Oran
Algiers
Setif Constantine
Sidi Abdellah
El Menea
Hassi Messaoud
Boughezoul
Bouinan
Capital City
Main urban centers
New planned cities
+1.3m
+5.4m +0.4m
+1.4m
+0.8m
The country’s
urbanization
remains the
major
phenomenon of
overall growth
and population
change over the
last decades
71% of the
population
living in urban
centers
Area Population

A stable and attractive investment destination
A SAFE HAVEN FOR BUSINESS AND A REGIONAL IMMIGRATION HUB
≈ 5,000 companies
From France,
China, Italy, Spain,
Turkey
≈ 90,000 Syrians,
Malians, Libyans,
Sahraouis - 40%
Integrated as
workforce
Source: CACI
Algeria
Libya
Mali
Egypt
Algeria
Morocco
Tunisia
140,000 foreign
workers from
125
nationalities
Source: Ministry
of Labor,
Employment
and Social
Security
Investment as percentage of GDP 2015
(%)
Source: The Global Economy
Strategic access to an
ecosystem that covers
the Mediterranean
basin, the Maghreb
region, with roads
towards and from Africa
and the Middle east
Politically stable and
economically ready to
grow
Source: APS, Jeune Afrique, UNHCR, various sources
3 3 3
5
7
Algeria Morroco Tunisia Eqypt libya
Short-Term Political Risk 7 In high
risk
14.05
21.95
24.14
32.19
45.91
Egypt
Tunisia
Mali
Moroco
Algeria
Legend
Flow of refugees
Algerian businessmen/ academics returning in the country
Follow of foreign business
Violent instability/ civil war/ riots
Political instability
Foreign companies
Foreign workers

Source: AFDB, Deloitte,
A high concentration of middle class among the population
ZIMBABWE
TANZANIA
BURUDI
Zanzibar
MALAWI
ZAMBIA
MOZAMBIQUE MADAGASCAR
BOTSWANA
SWAZILAND
LESOTHO
SOUTH
AFRICA
NAMIBIA
ANGOLA
SUDAN
ETHIOPIA
DJIBOUTI
ERITREA
UGANDA
SOMALIA
KENYA
CENTRAL
AFRICAN
REPUBLIC
RWANDA
Berbera
EGYPT
EQUATORIAL
GUINEA
ANGOLA
REP OF
THE
CONGO
NIGER
CHAD
DEMOCRATIC
REPUBLIC
OF THE CONGO
(ZAIRE)GABON
NIGERIA
CAMEROON
TUNISIA
WESTERN
SAHARA
ALGERIA
MALI
LIBYA
BENIN
TOGOCOTE
DTVOIRE
BURKINA
GUINEA
SENEGAL
GHANA
LIBERIA
MAURITANIA
SIERRA
LEONE
GAMBIA
GUINEA
BISSAU
THE
MOROCCO
+75% of middle class
population
lower concentration of
middle class
lowest
concentration of middle class
 77% of the Algerian population is
considered as middle class
+
 Annual income exceeding USD 3,900
in PPP terms or with daily per capita
expenditure between USD 2 to USD 5
=
 Increase demand of the consumer
goods and services, Mobile and
Telecommunications (TMT),
entertainment, financial services
healthcare, construction,
infrastructure development and
agriculture
South
SUDAN
89%
84%
79%
77%
Tunisia Morocco Egypt Algeria
9%
18%
49% Floating
Lower Middle class
Upper Middle class
Summary of North Africa
Middle class
Algeria Middle class
breakdown
Income per capita in USD (2014,
PPP-adjusted)
15,722
13,054
10,512 10,404
6,850
0
4,000
8,000
12,000
16,000
Arab
States
Algeria Egypt Tunisia Morocco
Growing middle
class
+
Development of
mass markets
=
Boost of
population
needs for
education,
entertainment,
healthcare and
consumer goods
IN STARK CONTRAST TO EUROPE ALGERIA OFFERS A GUARANTEED CONSUMER BASE FOR THE
COMING YEARS

Substantial Infrastructures
April 2017
2015 – 2019
Investment
program includes:
- Hospitals
- Transport
infrastructure
(ports and airports)
- City Transportation
systems
- Wastewater
management
- Desalination
Airports
 17 international airports
 16 national airports
Electricity
 Accessible to
99% of the
population
Water
 Accessible to 98% of the
population
 94 Dams
 Achieved UN millennium
access to water goal
Education
 97 universities
 2,200 high schools
 22,000 schools
IT / Telecom penetration:
 Mobile: 110%
 Internet: 60%
 49000 Km Fiber Optics
deployed IUT
Hospitals
 210 hospitals
 1,616 polyclinics
Maritime Transport
 45 marine infrastructure
 New port of 23 quays and 6.5m containers p.a. capacity
Total
Infrastructure
Spending
Roads
 112k km network
 Longest highway in
Maghreb (east-west)
 Trans-Saharan linking
Algiers to Lagos
2005-2009 2010-2014 2015-2019
$286bn
$486bn
$220bn$200bn
Rails
 3,973 km network
 Network to triple
railroad network
over next 15
years
Source: ANDI, BMI, Reuters, Tell Estimates

Exponential Growth of the Private Sector
20151966 1986 1987 1998 19991990 1991 1995
Sources: Cevital, NCA Rouiba, biopharma, abbinvest, ANDI, ONS,Collection Statistiques, Tell estimates
fsgrswg
300
1m
1,7m
14K
900m (2015)
518m (2015)
Economic sectors dominated by the private sector
• Despite the size of the public
and national sector the Private
Sector enjoyed a substantial
growth
• A specific legal framework has
been setup
6,500m (2015)
500m (2015)
500m (2015)
480m (2014)
343m (2012)
7000% over the last 15 years
Revenue en M
x Nombre de sociétés privées en Algérie
Source: Ministère de l’industrie, estimations,
TELL
1.7m
0% 20% 40% 60% 80% 100%
Public Private
Metal, Mechanics, Electronics
Food Processing
Construction material
Chemicals, Plastics
Wood and Paper
Textil
Telecom
0% 20% 40% 60% 80% 100%
Public Private

The New Model of Growth in Algeria
A sustained growth path for
non-hydrocarbons as
contributors to national GDP
A two to three time increase in
GDP per capita income
A doubling of the share of
manufacturing industry in terms
of added value
A modernization of the
agricultural sector in order to
achieve food security and to
realize potential for
diversification of exports
An energy transition allowing, in
particular halving the annual
growth rate of internal energy
consumption
Export diversification to support
the financing of accelerated
economic growth
The stimulation of the
creation of enterprises in
Algeria
Rapid private investment
outside of energy
Strengthening industrial
policy
Reorganization and
integration of industrial land
management
Ensuring resource safety
and energy diversification
Ensuring new governance to
go along with a new growth
model
Target Objectives
Strategic Growth Policy
Source: Algerian Ministry of Finance

Key Sectors of Focus
Consumer
Driven
Sectors
Agribusiness Energy Infrastructures
FMCG
Pharma
Healthcare
Entertainment
Retail
Processing
Packaging
Warehousing
Logistics
Distribution
Renewable Energy
Oil and Gas
Mining and
Industry
Natural resources
ICT
Environment
Construction
Car Industry
Heavy Indusrty

Controls on foreign
exchanges
 Guarantee of repatriation granted to foreign investors and applicable to foreign investment
proceeds
 This provision extends the guarantee of repatriation to cover contributions in kind concerning
assets located abroad, but only after the issuance of a contribution auditor’s report.
The Algerian state’s
preemptive right
Relocation of the rule
49/51
Guarantees
 Which any sale of shares by or to foreign investors is subject to the State’s pre-emptive right.
However, only the pre-emptive right as a principle is provided by the new law.
 The new law maintains the State’s right to purchase (improperly called pre-emptive) in the event
of sale of shares in a foreign company holding shares in an Algerian company which benefited
from advantages or facilities during its establishment.
 The rule which limits the shareholding of a foreign investor in Algerian companies to 49%.
 Fair and equitable treatment with regard to the rights and obligations attached to their
investments.
 The principle of non-retroactivity applies to investments .
 In case a dispute involves the Algerian State and a national of one of the signatory States of the
treaty, it is possible to resort to arbitration through the arbitration clause provided by such treaty.
Foreign Investment
THE LAW NO.16-09 OF 3 AUGUST 2016 ON THE PROMOTION OF INVESTMENT

Incentives
• The aforementioned so-called « common » advantages are
not exclusive and can therefore be cumulated with
advantages provided by other incentive measures
introduced in Tourism, Industry, Agriculture
 Number of tax exemptions and the bank interest rate
subsidies concerning thirteen (13) activities in the
industrial sector:
The steel Dies
Metallurgical
Hydraulic binders
Utilities
Home appliance
Industrial chemistry
Mechanical and automotive
Pharmaceutical
Aerospace, shipbuilding and repair
Advanced technologies
Food industry
Textile and clothing
Leather and derivatives and wood products and
furniture industry
These advantages are established by an agreement that is
negotiated and signed with ANDI following an approval by
the CNI. The qualification criteria for this kind of investments
are to be set out in a coming implementing regulation
These advantages will at least include the so-called
“common advantages” (and, when applicable, the so-called
“additional” advantages) granted for longer durations. In this
context, it should be possible to request additional benefits
such as, for instance, a stabilization clause relating to energy
price
The project should benefit from exceptional tax exemptions as
it will be classified in sectors of high priority for the government
Additional advantage to privileged activities and/or
creator of employment
The exceptional advantages for projects presenting a
special interest for the national economy:
ADDITIONAL & EXCEPTIONAL ADVANTAGES OF THE LAW NO.16-09 OF 3 AUGUST 2016

THE PRINCIPLE
CENTRAL BANK
FOREIGN
INVESTORS
DOCUMENTATION
IN CASE OF
LIQUIDATION
Banks and regulated institutions have the obligation to execute without delay, all requests related to the transfer of
dividends, profits, revenues from the disposal of foreign investments as well as attendance fees and bonuses for
foreign Directors (members of the Board of Directors).
The Central Bank’s audit is performed subsequently
Profits and dividends are transferrable for an amount equivalent to the foreign contribution into the capital.
In the event of disposal or liquidation of investments, the amount transferred is equivalent to the selloff price or the
value of the liquidation surplus to the profit of the foreign investor
For the transfer of profits, bankers may request all attestations relative to the initial capital contribution and to all
capital increases
THE PROCEDURE
Trading activities are not eligible
for profits transfers, unless justified
by a significant investment effort
Transfer of advances and down
payments on profits and dividends
are prohibited
Disposal and liquidation: Transfer
to be executed for an amount
equivalent to the real value, free of
taxes of disposed goods
File to be presented
(Instruction Central
Bank 01-09)
Transfer Of Dividends

Algeria is the African Giant, The Next Economic Power House

The next Region of the World Ready to emerge
Perfectly positioned
A Strong Political will
A Domestic and Regional market to support Investments
Infrastructure Ready and still to be expanded
Debt free






Public and Private sector as a partner

WELCOME TO ALGERIA

Key Takeaway Points

Paris
LuxembourgDubaiAlgiers
ZurichMonaco
London
tell.group
Contact Us

London presentation 25.10.17

Recommended

Recommended

More Related Content

Similar to London presentation 25.10.17

Similar to London presentation 25.10.17 (20)

Recently uploaded

Recently uploaded (20)

London presentation 25.10.17

Editor's Notes