ALGERIA Thursday, July 5, 2012 See this report at worldfolio.co.ukCelebrating 50 years of independenceOn July 5, Algeria celebrates 50 years since its declaration of independence from France in 1962. In addition to instillingpride and patriotism across the nation, the event also unites Algeria’s government, business community and citizens inhighlighting the current peace, progress and stability that contrast so greatly with the country’s tumultuous pastA stable political situation has contributed to a robust eco-nomic expansion over the past another win for the ruling National Liberation Front (Front de Liberation Nationale, FLN) party. Past elec- tions have been marred by accusations of fraud, sodecade. Today, Algeria’s biggest at Algeria’s request these latest polls were held un-challenges include tackling un- der international observation by the EU, the Africanemployment, addressing hous- Union and the Arab League. EU observers reported oning shortages, abating corruption, how the elections were handled in “generally satis-and further developing the pri- factory” conditions, auguring well for the continuedvate sector. Increased economic development of Algeria’s political system in the future.diversification and foreign part- Following the elections, new legislation and co-nerships also head the govern- operation between Algerian authorities and UN Womenment’s priority shortlist. regarding female representation in the country’s po- Algeria is the largest country litical sphere saw the proportion of women in the Al-in Africa and the tenth largest in gerian parliament increase from 7 per cent to 31 perthe world. More than 80 per cent cent. President Bouteflika believes the relatively highof its territory is covered by the turnout for May’s legislative polls, of around 43 perSahara Desert. Consequently, cent compared to 35 per cent in 2007, should markover 90 per cent of its 37 million the rise of a new generation.people live along the country’s Quelling the tide of Arab Spring revolt with ongo-fertile 620-mile Mediterranean ing progressive reforms and opening up the elec-coastline. The country is also toral process to international supervision have helpedone of the continent’s top five burnish Algeria’s reputation with Western allies whoeconomies, fuelled by massive rely on the North African nation’s supplies of natur-reserves of oil and natural gas al gas and contributions to tackling terrorism. The elec-that have given it a hefty cush- tions, which dashed Islamist opposition hopes ofion of $205.2 billion (£131.6 bil- gaining power, garnered moderate praise interna-lion) in foreign currency re- tionally, with US Secretary of State Hillary Clintonserves, and a large hydrocarbon calling them a “welcome step”, and a statement fromstabilisation fund. the EU referring to them as a “step forward in the re- Wary of over-reliance on filling form process” that would consolidate democracy.its coffers from hydrocarbons, thegovernment has been taking ac-tion to create a diversified andcompetitive economy, with the ul-timate aim of becoming the biggestindustrial base in North Africa. Assuch, Algeria’s business frame-work has evolved substantially in “recent years. Overhauled legislation and new invest-ment incentives are making their mark on the nation’s After overcoming the hardest of trials, our country isfinancial environment, adding weight to the govern-ment’s affirmations that the formerly socialist Algeria now headed on a path of dynamic progress, takingno longer differentiates between public and private en-terprises or national and foreign entities. into account the realities and aspirations of our youth, to In May 2010, President Abdelaziz Bouteflika an-nounced Algeria’s $286-billion investment plan for strengthen the foundations, expand the scope, and ensure the2010-14, aimed not only at diversifying Algeria’seconomy away from hydrocarbons revenue, but al- continuity of peace, independence and the unity of the nation.so improving infrastructure, increasing the overallskills base in the country, and supporting small and ABDELAZIZ BOUTEFLIKA, President of Algeriamedium-sized enterprises (SMEs). Over the past five decades, Algeria has enduredsome turbulent times, including a civil war that dom- popular demands. For example, riots in January lowing month, after the annual meeting between theinated the 1990s. It has since become an oasis of 2011 in reaction to escalating food prices subsided government and the trade union confederation, arelative peace and security in what is viewed as a in less than two days after the government an- £25 increase in the monthly minimum wage to £154fairly volatile region. The Arab Spring uprisings in nounced subsidies designed to reduce prices by 41 was also announced.large parts of North Africa and the Middle East that per cent for staples such as sugar and cooking oil. Mr Bouteflika became President of Algeria in 1999,toppled autocratic regimes to the east of Algeria – in Further measures followed in February last year, and was re-elected in 2004 for a second five-yearTunisia, Egypt and Libya – did not ignite an ‘Algerian when President Bouteflika promised to rescind Al- presidential term. A change to Algeria’s constitu-Spring’ last year, thanks in no small part to a popu- geria’s state-of-emergency legislation, which had tion, which removed the previous limit of twolace reluctant to return to times of conflict, as well been in place since 1992, and pledged to open up presidential terms, enabled a third electoralas swift action by President Bouteflika to address access to audio-visual media, an area that had been victory in 2009 when he was reported to a state monopoly up to that point. Responding to have won more than 90 per cent of theAlgeria project team: widespread concern over unemployment in Algeria, vote, carrying his leadership throughChristophe Laurent (Editorial Director); the President also vowed to promote job creation, par- to the next presidential electionsPaloma Garralda (Project Director); ticularly for the country’s massive youth population, scheduled for April 2014.Alain Caignard, Jose Ignacio Alegre and to further assuage discontent. Peaceful parliamen-Brianne Bystedt (Project Co-ordinators) Reforms continued throughout 2011. In mid-April, tary elections in May The Martyrs’ Memorial in President Bouteflika promised to amend the consti- 2012 produced Algiers, commemorating UPPER REACH: 68 King William tution and invited other political parties to submit pro- the Algerian War of Street, London EC4N 7DZ posals for changes to a parliamentary committee. Pro- Independence Tel: +44 (0) 207 959 2424 posed reforms to the laws governing political parties, Fax: +44 (0) 207 959 2201 the electoral process and non-governmental or- ganisations were announced in August. The fol- AN INDEPENDENT SUPPLEMENT BY UPPER REACH ON ALGERIA
An advertisement supplement by UPPER REACH 2 ALGERIA Relations between the UK and Algeria stronger than ever Minister of Foreign Affairs Mourad Medelci highlights Algeria’s 50 years of progress and strengthened ties with BritainI n light of Algeria’s 50th anniversary of independence, what major developments and advances would youlike to highlight? Foreign Ministers William Hague and Mourad Medelci, Algiers, October 2011 drocarbons, based on a win-win partnership. With the aim of increasing the British business community’s interest in other key sectors of the economy – suchThe 50th independence anniversary is a milestone in as infrastructure, new ICTs, the pharmaceutical in-our contemporary history and it offers a unique op- dustry, tourism, water resources, services, agro-portunity not only to remember the richness of our economy, renewable energy, etc – Algeria inviteshistorical and cultural heritage, but also to reinforce our these investors to embrace the market and our ini-ties with France, with which Algeria shares many in- tiatives for partnerships.terests and links based on our aspirations for a more Among the most important British companies for theequitable, tolerant and fair international order. Algerian market, it is essential to mention BP, HSBC and The 50th independence commemoration is definite- GlaxoSmithKline, among others.ly a very symbolic landmark for Algeria and thereby doesnot exclude any ideology or partisan ideas, and it is sup- What is the Algerian government’s strategy to attractported by the common history we share with France. more British investors, particularly to those sectors In 1962, Algeria had just emerged from a terrible war, other than energy?and the economic and human conditions were bad. We must stress the existence of great possibilities forNow, 50 years later, Algeria is a regional power with the economic cooperation between both countries,great future prospects that plays a key role on re- along with the great economic performance that our coun-gional and non-regional scenes as a nation full of po- try has experienced in recent years.tential. This allows us to understand our past, along The Algerian market offers great investment andwith certain aspects of the present that help us pre- partnership opportunities framed in a strong rulepare ourselves for the future. of law, with great incentives and guarantees for the For the past 50 years, the Algerian state has com- foreign investor, particularly since the approval ofmitted, with a constant and innovative perspective, the $286 million (£183 billion) plan for public in-to strengthen our friendship relations and fructuous vestments for the 2010-2014 period.cooperation with different countries in the world, es- Algeria has adopted a sound strategy addressed topecially France. attract foreign investors. Different mechanisms have Algeria has made constant efforts to consolidate been put into place for this aim, such as the creation “peace and stability, within and beyond its borders. I of the Sub-Committee for Economic, Trade and Fi-would like to emphasise that the freedom, stability,progress and democracy that we now enjoy in Alge- The presence of British businessmen and nancial Affairs. These mechanisms allow better eval- uation systems and the identification of investmentria 50 years after its independence is the outcome investors in Algeria must be extended to sectors opportunities in order to enhance trade co-operation.of huge sacrifices and important efforts that we need The Algerian government has made the decisionto value today, in order to better preserve them for beyond hydrocarbons, based on a win-win partnership. to repay its foreign debt and not to resort to exter-the future. nal borrowing anymore. This operation will strength- en its financial situation and will incentivise investorsWhat is your feeling about the evolution of Algeria- MOURAD MEDELCI, Algerian Minister of Foreign Affairs to be more interested in the Algerian market.United Kingdom relations for the future? The project to hold an event devoted to the Alger-Algerian-British relations have made significant ad- ian economy this year in London undoubtedly indicatesvances in the past few years, characterised by im- gate in Charge of Maghreb and African Affairs, and committed itself to install an open, competitive and pro- the clear interest of our British partners to carry outportant diplomatic visits, such as William Hague in Alistair Burt. ductive economy. Its reforms are mainly characterised actions of cooperation with our country.October, Alistair Burt and Lord Howell of Guildford in The celebration of the sixth Algerian-British bilater- by the liberalisation of exports, incentives for the private At an international level, Algeria has been very ac-November, Lord Risby in January and Lord Jonathan al relations session last March denotes both countries’ sector, the reformation of our banking system and the tive in integrating its economy in a globalisationMarland in February. In March, the sixth session of interest in strengthening their relationships in differ- openness of big public companies to get capital. process and has recently concluded an associationthe UK-Algeria Joint Committee was held in London, ent areas, i.e. politics, security, economy, culture, etc. The presence of British businessmen and investors agreement with the EU, as well as started negotiationsco-chaired by Abdelkader Messahel, Minister Dele- Algeria has adopted sound economic reforms. It has in Algeria must be extended to sectors beyond hy- to adhere to the WTO. FAST-TRACKING BILATERAL TIES AND TRADE “ Official relations of friendship and co-operation be- tween the United Kingdom and Algeria got their start There are numerous possibilities for win-win in the late 16th century thanks to the interest that British tradesmen had in the North African market. synergies between the UK and Algeria; for a Over the next few centuries, relations warmed and cooled, yet were never broken altogether, and by the start, the UK needs new export markets and 18th century many British writers, artists, travellers and explorers were beckoned to the Mediterranean Algeria needs technology and economic diversification. country by its exotic deserts, warm and dry climate, AMAR ABBA, Algerian Ambassador to the UK Roman ruins and stunning coastline. Algeria in the 19th century saw an influx of wintering British tourists who, in seeking respite from the cold Various mechanisms were put in place for en- as it is aimed at “all types of infrastructure related of the North Atlantic, found in Algeria a balmy and hancing co-operation between the two nations, in- to roads, ports, dams, transport, education, health, safe sanctuary. cluding the establishment of the UK-Algeria Joint housing, industry, agriculture, services and tourism. After independence, Algerian-UK relations strength- Committee on Bilateral Relations. This committee In short, Algeria is a gigantic workshop.” Amar Abba, Algerian Ambassador to the UK ened, especially in terms of trade. British Gas, for meets once a year, alternating between London and Mr Abba highlights that British investors may be example, in 1964 became the first customer of Al- Algiers, to discuss political, economic, educational, interested in the sectors of vocational training, fi- which has meant they have tended to look else- gerian liquefied natural gas (LNG) and by the 1970s, cultural and international issues of common inter- nancial services, energy, pharmaceuticals, the space where. That is changing and UK companies are in- UK companies were providing the machinery, equip- est. Since 2006, several agreements in the field of industry, agriculture and tourism. creasingly looking at Algeria as an opportunity. ment and technological expertise to spur the oth- judicial and consular cooperation have been signed, Although British tradesmen were keen on doing Cooperation is mutually beneficial and will support er’s industrial expansion. in addition to the 2009 signing of an agreement on business with Algeria back in the 1500s, bilateral trade Algeria’s development by creating jobs and trans- Since Queen Elizabeth II made an official visit to defence co-operation. did suffer in the 20th century as a result of civil war ferring know-how and skills.” Algiers in late October 1960 and up until fairly re- The Algerian government is eager to diversify and terrorism. The democratic government of Pres- The volume of Algerian-British trade ballooned cently, little had been to done to reinforce UK-Al- away from oil and gas, the de facto dominating ident Bouteflika is taking important measures to between 2005 and 2010, from £600 million to gerian affairs. According to Algerian Ambassador to sector in foreign trade, and encourages British in- change the negative perception his country still un- £1.05 billion. However, 2011 saw £2 billion in bilateral the UK, Amar Abba, all of this changed in 2006 when vestors to get involved. The $286 billion (£183 bil- fortunately suffers abroad. trade, clearly underscoring improved British confi- Algerian President Abdelaziz Bouteflika travelled to lion) Algerian Public Investment Programme Martyn Roper, the UK’s Ambassador to Algeria, dence in the North African nation and the Boutefli- London thus creating “greater visibility and aware- presents numerous possibilities for “win-win syn- admits that there “are some outdated perceptions ka administration’s successful campaign to ness of Algeria in the United Kingdom.” ergies between the UK and Algeria,” says Mr Abba, amongst British business people about Algeria, incentivise investment with its British friends.
An advertisement supplement by UPPER REACH ALGERIA 3 New industrial zones and SMEs diversify investment landscapeThe largest country on the African continent, cover- Algeria’s varied topography presents significant assigned the National Agency of Intermediation anding an area almost ten times the size of the UK , Al- Land Regulation (ANIREF) to set up 42 new indus-geria has a unique geographical diversity spanning physical challenges for balanced land management and trial zones nationwide that will be fully ready by 2017fertile lands, mountain peaks and steppe plains and be to international standards of infrastructure.buffering desert spread. equitable economic development The creation of regional focus points and indus- “We are facing some serious challenges in the next trial zones is also part of the government’s drive tofew decades,” says Cherif Rahmani, the former Min- encourage the creation of more small and medium- “ister of Land Management and the Environment. sized enterprises (SMEs) and spur widespread so-“First we have the demographic challenge of a new We want to be cioeconomic growth for Algerians.generation needing more jobs, services and rights.Second is the economic challenge: we want to be open to “We cannot have harmonious, balanced growth without good human resource management,” saysopen to globalisation whilst avoiding its negative im-pact, turning it to our advantage. Third there is an on- globalisation whilst Mr Rahmani. “That is why we are placing the citizen at the heart of our sustainable development and landgoing depletion of natural resources, not only energyresources, but also soil and water. Plus there is the avoiding its negative management.” The European Commission made 45 million eu-worldwide political challenge of global warming.” In 2010, the government released the National impact, turning it to our ros (£36 million) available in 2009 through its ME- DA II programme to help Algerian SMEs sharpenScheme for Land Management (SNAT) to confront advantage. their international edge. In 2010 the governmentthose challenges with a policy framework for na- introduced an SME competitiveness plan target-tionwide sustainable development that is socially ing the creation of 20,000 SMEs with a budget ofinclusive and environmentally sensitive. Amongst CHERIF RAHMANI, former 380 billion dinars (£3.1 billion) of public resourcesothers aims, it outlines the need for wider access to to be distributed via direct funding and reducedICT, the creation of economic zones with appropriate Minister of Land Management bank loan interest rates for SMEs to improve theirinfrastructure, modernising transport networks and and the Environment access to finance. “The Algerian market has a size that is not foundthe development of logistic platforms The government has established various region- anywhere else on the continent,” says Abderazakal hubs that will focus on specific sectors. The new saoud is focused on renewable energies, while Algeria’s gy plants across North Africa, harnessing both so- Trabelsi, President of the Banks and Financial Es-town of Sidi Abdallah will concentrate on ICT, biotech, Sahara region is, naturally, based around the solar lar and wind sources and exporting electricity to Eu- tablishments Association, ABEF. “People talk ofhealth, medicine and pharmaceuticals, as well as power industry. rope. By 2050, Desertec aims to be supplying 15 per Nigeria, but it is not the same. Algeria holds some-nanotechnologies, robotics and laser development. Last December, Algeria became the third country cent of all the EU’s electricity demands from projects thing unique: there are few countries that can pre-Boughezoul, in the steppe, has been designed to to sign up to the Desertec Industrial Initiative – a in the Sahara. sent both great potential and opportunities at themoderate its energy consumption and Hassi Mes- German-led vision of a network of renewable ener- In May, the National Council of Investment (NCI) same time.” THE ONLINE PLATFORM FOR OPPORTUNITIES IN ALGERIA “ If ever there was a country with limitless investment opportuni- The Algerian ties, it is Algeria. The largest country on the African conti- authorities seek nent (since the recent division of Sudan) with a long coastline, thousands of technology hours of sunshine, fertile soil, rich mineral and hydrocarbon deposits, well-preserved Roman ru- transfer through foreign ins and a very young population, Algeria repre- sents one of the greatest untapped potentials in investment. the world. Foreign investors have traditionally shied ABDELKRIM MANSOURI, away from the northern African state whose General Manager of ANDI public sector still dominates the economy, thereby leaving the field wide open for today’s entrepreneurs. Those who do enter do not do so ANDI also set up a one-stop shop to further facili- transfer through foreign investment,” says Mr conventions on protection of foreign investors. blindly – on the contrary, foreigners find a valu- tate and expedite investment, reducing the num- Mansouri. “They look for activities that will reduce Given Algeria’s healthy fiscal situation, foreign able ally in the National Agency of Investment ber of steps involved. the import bill, that is to say to produce locally investors are encouraged to finance their pro- Development, or ANDI. According to Abdelkrim Mansouri, ANDI’s Gener- something we generally import. If you look at our jects through local banks – Algeria is more in- ANDI welcomes partnerships in both private al Manager, the agency not only promotes invest- list of imports, you’ll see we import things that we terested in technology transfer and know-how and public sectors, and boasts a trilingual online ment, it also assists investors in their projects, could easily make here. Secondly, we want to di- than foreign funding. meeting platform where investors can post their putting them in touch with the relevant authori- versify our exports – we don’t want to export only While foreign investors are limited to owning a intention or offer. Interested parties can contact ties and raising awareness about tax exemptions hydrocarbons, which are subject to changes in 49 per cent share in any company, the govern- ANDI, which then puts the two parties into con- and other incentives. the international market.” ment encourages them to link up with more than tact. Currently, there are 175 offers of partnership ANDI is playing an instrumental role in diversi- Foreigners in Algeria need not worry about one Algerian partner, thereby permitting the for- listed in its database. fying Algeria’s economy away from hydrocarbons, their investments, says Mr Mansouri. Algeria eign party to keep a larger stake in the company One of the main advantages to this online sys- by growing local industry and attracting foreign has signed 48 bilateral agreements on mutual and allowing a more evenly distributed share of tem is that the foreign investor can do this all re- expertise and technology. protection and has agreements to avoid double the risk. motely from his or her home country. Recently, “The Algerian authorities seek technology taxation. It has also ratified all international For further information, visit: www.andi.dz
An advertisement supplement by UPPER REACH 4 ALGERIAPrivate sector comes in from the coldas business climate warms upIt is often said that numbers don’t lie, but in the case He adds that while the government is adoptingof Algeria, numbers don’t fully represent the reality. various reforms to help the private sector, “there isFor instance, the Heritage Foundation’s Index of Eco- much distance between the political discourse andnomic Freedom has ranked the country 14th among the reality on the ground.”the 17 countries in the Middle East and North African The best reform, he says, would be one that im-region, and 140th globally. Similarly, the World Bank’s proves the administration from within and that wouldDoing Business survey puts Algeria at 148th place allow for the growth of private small and medium-out of 183 countries. While these figures present a sized enterprises and industries (SMEs and SMIs),bleak outlook on Algeria’s business climate, what which he considers to be key engines of growth, cre-they do not do is take into consideration the coun- ators of employment, and enablers of economic di-try’s recent history, hurdles and developments. versification. Ahmed Tibaoui, General Manager of the World TradeCentre Algeria, is blunt yet optimistic: “I think that The Cevital way[the ratings are] a bit exaggerated. I am not saying An example of how the private sector can benefit thethat the business climate is very good but we should country – and of how the ambition that lies unrealisedbe classed better than that, because we are coming could blossom into jobs and wealth – is the Cevitalback from far: the Algerian economy was an admin- Group. The second largest company in the countryistered economy, managed by the government un- and the first in the private sector, Cevital is active intil the end of the 1980s and we started to open up electronics, household appliances, construction, su-our economy in 1998 with new laws and access to permarkets, agriculture, shipping, logistics, real es-the private sector and market economy.” tate, automobiles and glass among others. Reda Hamiani, President of the Business Leaders According to Issaad Rebrab, the company’s Pres-Forum (FCE), recalls how the administration of for- ident, Cevital is a huge contributor to state coffersmer president Ben Bella had opted for a socialist as well as to Algeria’s overall development. He says,regime, “a kind of regime that did not allow private “We have done the maths regarding the value thatinitiative to be realised. Because at that time, this was we create: 59 per cent goes to the state budget, 40a third world country and the people thought that the Algeria has overcome the effects of terrorism and civil per cent is reinvested and we distribute 1 per centengine of development and growth was not to be to the Algerian people. And this is after having paidcarried by the private sector. In my opinion it was a war, but a fully open free market has yet to emerge. our employees and all our costs.”mistake,” he says. “The state was chief, regulator, He adds that while reinvesting is the company’ssponsor and protector, and therefore although the The private sector is still underdeveloped, although it only choice since investing abroad is not allowed, itprivate sector was tolerated, it was in fact margin- provides an excellent channel for innovation andalised. Banks didn’t lend money to the private sec- is growing steadily thanks to initiative, ambition and growth. “Our reinvestment strategy is what makestor. It was very difficult to obtain land.” the work of private business organisations Cetival what it is today,” he affirms. Although the Algerian government is sometimesA difficult transition marked by lentitude, foreigners find a huge and lu-The system had been in place for nearly 30 years, Mr Tibaoui believes that a lag in local production ed a privatisation plan and began selling its compa- crative market in the country. Mr Tibaoui believes thatwhich is why in Mr Hamiani’s words, “it is difficult to was compounded by new regulation. “Due to the nies to the employees and eventually to investors. in less than 30 years, Algeria can become a “pivotal,turn 180 degrees now.” agreement we had with the IMF, we opened our for- Foreigners were not yet interested, given the recent wealthy country” and that could “maybe in the next In addition, once the economy was opened up in eign trade, which had been under the governance of turbulence; however, as more reputable local in- 20 years join the BRICS.”the late 1990s, a series of unfortunate events over- the state in the past,” he says. “We were obliged to vestors – such as SIM and the Cevital Group – bought Algeria’s World Trade Centre is trying to help makeshadowed this vital move and posed ever more open up, and foreign producers with cheaper prod- shares of public companies, a growing message of this happen by offering foreigners business serviceschallenges. The civil war (1991-2002) was detri- ucts of very good quality started to enter the mar- confidence was being sent out and eventually for- such as recruitment and accounting, and assistsmental not only to the economy, but to the coun- ket. Public companies then accumulated huge stocks eign investors began to take notice. them in avoiding as much bureaucracy as possible.try’s reputation as well. Algeria’s dinar began to of merchandise that they could not sell.” Today, although the private sector still faces many The WTC also links its members around the globe, sodevalue and, because almost all raw materials used During the mid to late 1990s, private enterprises bureaucratic challenges, it has no shortage of willpow- a member from anywhere in the world can arrive inin local factories were imported, production be- that had launched projects struggled to pay their er. As Mr Hamiani puts it: “Algerian businesses are Algeria and already have a contact lined up. Mr Tibaouicame more expensive. loans to the banks. In 1998, the government initiat- driven by dynamic, extremely ambitious leaders.” says, “We are at the heart of business in Algeria.” “ “ “ Algerian businesses are Of the value we create, 59% Algeria can become a driven by dynamic, goes to the state budget, pivotal, wealthy country, extremely ambitious leaders. 40% is reinvested and we distribute which could maybe join the BRICS in 1% to the Algerian people. the next 20 years. REDA HAMIANI, President of the Business ISSAD REBRAB, AHMED TIBAOUI, Leaders Forum (FCE) President of the General Manager of the Cevital Group World Trade Centre, Algeria
An advertisement supplement by UPPER REACH ALGERIA 5Solid policies turn economy aroundSubstantial foreign currency reserves and a large hydrocarbon stabilisationfund have helped buffer Algeria against the latest economic crisesThe positive turnaround in Algeria’s eco- country’s external debt is also extremely In banking, capital investment has al-nomic position was evidenced earlier this low, at about 2 per cent of GDP. In 2011 the so seen a boom. “We created 48 regionalyear when the IMF asked the North African Algerian economy grew by 2.6 per cent and investment funds that each have annation for $500 billion (£320 billion) in fi- inflation was 3.9 per cent. amount designated for small business-nancial support to help the organisation According to the Minister of Finance es. Often, if young people from universi-fund loans for emerging markets and de- Karim Djoudi, Algeria has been relatively ties or professional training schools wantveloping countries. The request highlights unscathed by the recent global econom- to start a small business, they need toAlgeria’s transition from an emerging to ic downturn due to the secure manage- have immediate capital available. Thesean upper-middle-income economy, turn- ment of the country’s foreign reserves, funds may be used to create a multitudeing the country from an IMF borrower in diverse investments in different curren- of small entities with a quick turnover,”the 1990s to it now being a net lender. cies, ensuring liquidity in the financial sys- says Mr Djoudi. With currency reserves of around tem to strengthen and raise Algerian banks’ In addition, the government has set up$205.2 billion, according to the latest IMF capital levels and increase their capacity a national investment fund that is work-report, Algeria has gone from being a bank- for commitment, and also enforced limi- ing on various major projects and is in-rupt country to having enough in reserve to tations on the short-term borrowing of volved in public-private partnerships.cover its operating costs for five years. This banks on the foreign market. Bank penetration is on the rise, helpedis in stark contrast to the 1984-94 period, “Although it is not over, we can say we have by new branches, banking education ini-when the country had to get by with less navigated safely through the reefs of this tiatives and the modernisation of pay-than a month’s emergency reserves in hand. crisis and we have brought growth to the do- ment methods. “We implemented an Algeria has the tenth largest stocks of nat- mestic market. Through our strong domestic electronic mass payment system in aural gas in the world and is the sixth largest demand, in 2011 almost $46 billion were few areas of the territory a few years ago,gas exporter. Hydrocarbon revenues have spent on imported goods,” says Mr Djoudi. but at the moment there is still a needlong formed the backbone of the economy, “We have also created entrepreneurs to learn how to use this technology. Peo-accounting for around 60 per cent of bud- who, in my opinion, have the capacity to ple have a strong attraction for cash mon-get revenues, 30 per cent of GDP, and more both meet domestic demand and to po- ey, but the mentality is gradually Algeria now boasts a sophisticated economy, with low external debt, and enoughthan 95 per cent of export earnings. The sition themselves in external markets.” evolving,” says Mr Djoudi. currency reserves to cover its operating costs for five yearsUpgrades for air, sea and rail transportation infrastructureInfrastructure in Algeria’s aviation and maritime sectorsis being expanded and improved, and there are plans to extendand modernise the railway networkIn terms of territory Algeria is the largest Approximately 90 per cent of Algeria’s establishing railway connectivity to thecountry in Africa, covering some commercial trade – including oil and gas ex- high plateau region.2,381,740 square kilometres, four-fifths ports – passes through the country’s ten Around 630 kilometres of new linesof which are desert. Aircraft and rail- commercial ports. All man-made – Algeria’s will connect Boughezoul to M’Sila, Re-ways have an important contribution to coastline has no natural harbours – they lizane to Tissemsilt via Tiaret, Saida tomake to its transportation network, while include the ports of Algiers, Oran, Bejaia, Tiaret and Tissemsilt to Boughezoul. Oth-its 1,000-kilometre (621-mile) Mediter- Annaba, Arzew and Skikda. Four new ports er railway projects include a line fromranean coastline offers opportunities to are planned in the current phase of infra- Tlemcen to the Moroccan border at Akidtrade by sea with potential to be more structure development. New harbours in Abbas and a southern loop line, connect-fully exploited. Algiers and Tenes will reduce the pressure ing Hassi Messaoud, Ouargla, Ghardaia, The country has seen a big increase in on the capital’s port, which handles more Laghouat and Djelfa.air travel and airfreight – trends that are than half the country’s container traffic. A budget of $2 billion has been set asideexpected to grow as the economy ex- Funds are also being allocated to rehabili- for the purchase of long-distance trains andpands. Fourteen new airports will be built, tate existing ports, among them 20 fishing a railcar manufacturing plant is to be es-raising the number of airports in the coun- ports. A number of ports, including Oran, tablished in Annaba as a joint venture be-try to around 70. Mostaganem, Tenes, Skikda and Djen Djen, tween French group Alstom and the Algeria has four major airports, locat- are to be connected via new motorway Algerian state-run company Ferrovial.ed in Algiers, Oran, Annaba and Constan- links to the new East-West Highway. Life has improved for commuters in Al-tine, of which Houari Boumediene Meanwhile, some $1.5 billion (£960 giers with the inauguration by PresidentInternational is the busiest, handling more million) is to be invested in modernising Bouteflika last October of the long-await-than 7 million passengers per year. and expanding Algeria’s 4,000-kilometre ed metro line. Faced with increasing competition from rail network, which is mainly used to trans- Built over five years by a consortiumforeign operators, the national carrier, Air port cargo. comprising Siemens France, VINCI Con-Algerie, has enlarged its fleet and is ex- Anesrif, the national agency for the struction Grands Projets and CAF, the firstpanding its international flight network. Its planning and implementation of railway segment of Line 1 of the capital’s under-aim is to increase passenger numbers to investments, plans to expand the net- groun system includes ten stations cov-6 million by 2014, from 3 million in 2009. work to 10,600 kilometres by 2016, thus ering nine kilometres. President Bouteflika opening the new Algiers metro system, October 2011Wait for 3G will soon be overAlgeria is set to catch up by granting 3G licences to its three mobileoperators in a move that will boost competition and benefit the consumerAlgerians love their mobile phones. Moussa Benhamadi, the former Min- services and improved customer careIn fact, mobile penetration is close to ister of Post and ICT, said recently the and network coverage.100 per cent in Algeria, which together government was ready to award 3G li- The Algerian telecom market as awith fixed line penetration of around cences to all three mobile networks whole generated $5.5 billion (£3.5 bil-8 per cent gives the country one of “in the coming weeks.” lion) in 2011, a 17 per cent increasethe highest teledensities in Africa. The introduction of 3G will enable compared with $4.7 billion in 2010. The At the time of writing, the launch of the providers to compete in the broad- ITC sector currently accounts for 4 per3G in Algeria is believed to be immi- band sector. Opportunities to boost cent of GDP. The government would likenent. revenue will come from value-added to see it account for 8 per cent of GDP.
An advertisement supplement by UPPER REACH 6 ALGERIANot a drop goes to wasteUnconventional sources of water meet the needs of Algeria’s people, farmers and businessesWater is, of course, a crucial resource – not just to meet Waste and water pollution are major difficulties we face.” Significant investments have also been made by thethe basic needs of Algeria’s population, now mostly con- He quotes a speech by President Abdelaziz Boutefli- state in a national wastewater recycling programme,centrated in the big cities, but also for agriculture and in- ka in which he said: “Every single drop of water we waste launched in 2008. The national sanitation network hasdustry, which between them account for 70 per cent of today is gone forever.” been enlarged by more than 90 per cent, from 21,000the amount used. Rainfall varies from region to region but Algeria currently has 68 dams that are used to pre- to 42,000 km. Eighty-seven per cent of households arecan fall to zero everywhere during the hot summer months. serve water for drinking and irrigation – 38 of which now connected to public sewage systems. The success of the agricultural sector depends en- have been built under President Bouteflika – and more Algeria has raised its sewage treatment capacitytirely on rainfall during the growing season. The grain har- are under construction. from 90 million cubic metres per year in 1999 to 800vest hit a record 6.1 million tons in 2009 but fell back to The National Agency of Dams and Transfers (ANBT) is million cubic metres per year. By 2015, capacity should4.5 million tons in 2010 because of drought; last year it the agency responsible for the construction of dams. Its reach 1.2 billion cubic metres per year, with 97 per centwas around 4.2 million tons. General Manager Brahim Nessala says: “ At independence of wastewater being treated. The authorities have intensified efforts to mobilise ad- in 1962 we had only 13 dams with a capacity of 450 mil- “Apart from improving the quality of life of citizens,ditional water resources, building new dams and desali- lion cubic metres. From 1962 to 1999, we completed 30 these volumes of water recovered will facilitate furthernation plants, reducing water loss and increasing the dams, to reach a total of 43 dams with a capacity of 2.6 agricultural development, while representing a signifi-capacity for reusing treated wastewater. As a result Al- billion cubic metres. From 1999 we built almost 40 more cant gain in terms of water resources,” says Mr Sellal.geria is among the countries that have reached their mil- in 12 years, increasing capacity to 7 billion cubic metres. The Minister also says there are interesting op-lennium goals in terms of access to water and sanitation. As of now, there are 12 dams under construction and we portunities for private-public partnerships, national have launched tenders for three more.” or international, in the management of water re- “ “The considerable efforts of the state in recent yearsin terms of water resources have significantly improved With most of the country’s major population centres sources in Algeria. Apart fromcitizen access to drinkable water and sanitation across strung along the coastline of the Mediterranean, advan- Currently, the administration of the water and san-the entire national territory,” says Abdelmalek Sellal, Min- tage is being taken of the potential for desalination of itation public utilities of the four main Algerian cities improving theister of Water Resources. seawater. In 2008, the president inaugurated Africa’s – Algiers, Annaba, Constantine and Oran – is carried He says consumer satisfaction is palpable in many parts largest seawater desalination facility on a brownfield site out by international private companies under man- quality of life of agement contracts.of the country, but is concerned this can bring compla-cency. “Citizens consider that the water problem is just east of the Port of Algiers. The $250- million (£160-million) Ham- This is not privatisation but an opportunity to ben- citizens, these volumes ofsolved. Even though this situation ispositive, it is also dangerous be- ma Seawater Desalination Plant provides water round the clock to the coun- efit and learn from the companies’ expertise and ex- perience, according to Karim Hasni, General Manager water recovered willcause it conceals the fact thatour country has lived un- try’s increasingly populated and industrially active capital city. of the national sanitation holding company ONA, which jointly owns the local utilities with the national facilitate furtherder water stress forover two decades, JointlyfundedbyGeneralElectricCompany (GEC) and the state-owned Algerian Energy Company, water holding company Algerienne des Eaux. “It covers only the field of management, nothing agricultural development.in part due to the plant was part of a larger programme to build de- more,” he says. “Everything remains state property,waste and salination stations across the and we retain sovereign decisions regarding the wa- ABDELMALEK SELLAL,pollution. country. ter rates, investments etc. What interests us is the The entire programme, now with 13 desali- transfer of know-how.” Minister of Water Resources nation facilities, has been conducted in partnership with private sector companies on a build-own-operate- transferbasis. The programme is continuing with a new wave of plants planned for later this year.Oil revenues fund investment in roads pleted, should create at least 100,000 jobs. Meanwhile, In April, Dr Ghoul announced the launch of theMajor road projects will create an efficient modern construction and the public works sector have been dri- Blida-Ghardaia section of another huge project, a ma- ving growth. jor north-south highway linking Algiers and Ain Guez-transportation network that will also boost development, Up to 2014 around $90 billion (£58 billion) is to be zam, on the border with Niger in the Tamanrassetinvestment and employment spent on new roads, ports and airports. It is part of a long-term plan that includes the construction of 112,696 Province. The first phase will pass through the provinces of Blida, Medea, Djelfa, Laghouat and kilometres of new roads by 2025. Ghardaia, and will be difficult as it crosses wadis andCrossing the desert in the northern section of Algeria from The East-West Highway is just part of a massive on- The ongoing five-year phase includes completion of mountainous areas.Tunisia in the east to the Moroccan border in the west is going programme, funded by the government from oil the East-West Highway and links to 830km of sec- One of three parallel north-south highways plannedthe East-West Highway, one of the largest public works revenues, to build the transportation infrastructure ondary and inter-provincial roads, along with the com- for completion by 2030, it will contribute to the open-projects the world has seen. the nation needs for economic development. pletion of the national dual roads works along 700 km. ing up of regions that it crosses, especially those lo- The six-lane toll road – the longest continuous high- At the heart of it is the drive to establish a modern The Ministry of Public Works will build more than cated in the central highlands and the south.way in Africa – forms part of the 7,000-kilometre (4,350- and efficient road network linked to ports, airports and 2,500km of new roads and rehabilitate around The other two highways are planned to run frommile) Trans-Maghreb Motorway project, which will link railways, connecting the country internally and with 8,000km of existing roads. Oran to Bordj Badji Mokhtar, in southwestern AlgeriaMorocco, Algeria, Tunisia and Libya. its neighbours. Large projects include completion of the 1,300km near the border with Mali, and from Skikda to Djanet Built by Chinese and Japanese contractors employ- “We strongly believe that entering the global econ- High Plateaus Highway, following a trade corridor be- on the border with Libya.ing an army of construction workers over a period of five omy will be easier with a fully equipped and structured tween the Moroccan border to the west and the Tunisian The contribution to this vast programme of in-years, the hugely ambitious project was described by territory, able to attract investments and stimulate boarder to the esast; a 350km toll motorway through five ternational companies, such as the China State Con-President Abdelaziz Bouteflika at its launch in 2007 as economic activity,” says Amar Ghoul, who until recently inland provinces; and numerous projects to ease city traf- struction Engineering Corporation, which is building“the challenge of the century”. Carving the highway was Minister of Public Works. fic, including completion of the second Algiers ring road. two thirds of the East-West Highway, is crucial to mak-across 1,720 kilometres of often difficult terrain in 24 of “All these projects will allow the implementation of “There are numerous projects to smooth the flow of ing the plans a reality. But Dr Ghoul says that work-the country’s 48 provinces and through the cities of a viable, layered and interconnected network that will traffic in the big urban centres,” says Dr Ghoul. “In ad- ing on the project has given Algeria invaluableAnnaba, Constantine, Setif, Algiers, Oran and Tlemcen, has make Algeria accessible and competitive.” dition to the improvement of traffic, great importance experience in building roads and bridges in chal-certainly been a project of awesome scale, comprising Public works have been a cornerstone of govern- has been given to this type of project, for aspects deal- lenging terrain.60 interchanges and 538 civil engineering structures, ment policy since President Bouteflika came to office. ing with the improvement of living standards through “The involvement of foreign companies has strong-including 70 viaducts, 13 tunnels, service stations, truck Major infrastructure projects are part of the government’s the designing of open areas and the improvement of ly contributed to the reinforcement of our realisationstops and highway maintenance and operation centres. strategy to reduce unemployment and poverty, pro- the visual aspects of the developments.” capacities and has allowed Algerian companies to ac- Constructing the road to European standards has con- viding work for Algerians and serving as a platform for A second phase, from 2015 to 2020, will focus on quire viable technology and know-how,” he says.sumed huge quantities of materials, and involved nu- sustainable development. rehabilitating thousands of kilometres of existing high- “Joint ventures between Algerian companies andmerous items of plant and equipment and a largely The authorities forecast that economic activity gen- way, while a third phase will be used to evaluate the foreign companies are the type of partnerships thatAlgerian workforce of around 20,000 people. erated by the East-West Highway alone, once it is com- finished projects. we like to encourage.”
An advertisement supplement by UPPER REACH ALGERIA 7Inclusive development willharvest natural potentialSharpened focus on for 39 per cent of Algeria’s agricultural and food imports. In order to reduce the country’s import bills, partic- “There are no territories with no future; there are only territories without projects. So we have to lookagriculture as part of a ularly for cereals, milk, sugar and oil, the government’s into and develop the human, natural and physical po- new agricultural development strategy places partic- tential of each territory,” says Mr Benaissa.drive for sustainable ular emphasis on making better use of its lands and Under the government’s current five-year plan improving homegrown food production and quality. Al- for rural housing, 900,000 are being construct-development aims to boost geria has around 8 million hectares of arable land, 51 ed as part of its commitment to improving peo-domestic production per cent of which is dedicated to field crops – mostly cereals and pulses. However, only 7 per cent of this land ple’s lives in the country. “Rural economic activity is vital, because to keep people in these homes, is irrigated, so Algeria’s agriculture industry remains heav- they should have a business, even if it is small.A lgeria’s fertile soil has made its agricultural sector the second-largest contributor to the nation’s GDP,after hydrocarbons, accounting for about 8 per cent of ily dependent on rainfall, and imports. Some 6 per cent of the country’s arable land is taken up with arboricul- ture and 3 per cent by industrial crops. It gives them a means and a reason to stay in the country and keep small agricultural activities go- ing,” says Mr Benaissa.its income and providing employment for a quarter of The National Agricultural Development Plan (PNDA) In recent years, agricultural finance has experiencedits population. “The scope for progress is enormous,” launched in 2000 was followed by the ten-year National significant growth following the introduction of a newsays Algeria’s Minister for Agriculture and Rural Devel- Agricultural and Rural Development Plan (PNDAR) in credit mechanism featuring seasonal interest-freeopment Rachid Benaissa. 2004. Both plans have made thousands of hectares of loans to the agricultural sector. Opening up lines of However, Algeria’s agricultural production is far be- land available for agricultural use. Algeria has made credit has been a boon for rural communities, as “low demand and the country continues to import large notable progress in its efforts to see the country trans- around 70 per cent of Algeria’s 1.1 million farms arevolumes of bulk agricultural products and packagedfoodstuffs, especially from France, Spain and Italy. formed from a net importer of agricultural goods into an exporting economy, by prioritising the development smallholdings, i.e. less than 10 hectares, and 80 per cent of these farms are sole landowners. Rural economicThanks in large part to its geographical proximity, theEU is a major agricultural trading partner, accounting of any items that have a comparative advantage, such as dates, wine and olives. The government’s plans encompass four themes: the modernisation and rehabilitation of villages, eco- activity is vital, nomic diversification in rural areas, protection and because to keep people inPrivate sector puts new enhancement of natural resources, and preservation of rural heritage. “It is a rural vision, it is action for rural women, and it is action for rural youth,” adds the Minister. these homes, they should have a business, even if itopportunities on a plate Long-standing environmental protection efforts in Algeria have received international acclaim. For ex- ample, the UN Convention to Combat Desertification (UNCCD) recently referred to Algeria as “a model is small.Algerian entrepreneurism is reflected in the country’s country in integrating the fight against desertifica- RACHID BENAISSA, tion and land degradation in an overall development Minister for Agricultureleading food producer which is also looking to enter the policy” – a model that it encourages other countries and Rural Development to adopt.hotel and tourism sectors ing producer of a variety of foodstuffs, such as toma- to paste, jams and preserves, durum wheat pastas and couscous. It is also involved in food canning. It has an annual turnover approaching 20 billion dinar (£164 million) and employs more than 1,000 people. “We have a project to build a large mill that will allow us to triple what we presently produce,” says Mr Ben- amor. “Likewise, we will be expanding our production of pasta and couscous, due to the astronomical stor- age capacity compared to what we have now. “Still sticking to the agri-food sector, we want to ex- pand into new areas like producing biscuits – which is something we have never done before. We will try to keep the same line, process and product quality, dif- ferent from what you can find on the market. The on- ly sector we have not yet explored is livestock agriculture.” In Europe and the US, the company’s products are extremely popular with the Diaspora looking for a taste of home. Mr Benamor says, “In the case of France, for example, Algerian and North African migrants are the foremost couscous consumers. Today, and since we started exporting two years ago, they are proud to haveLAID BENAMOR, General Manager of the Benamor Group high quality Algerian products. Although people always believe that couscous is a Moroccan product, it is ac-Earlier this year, a trade delegation from the US that tually a North African one, which also comes from Al-included seven wheat producers visited El Fedjoudj geria and Tunisia.”Commune in Guelma Province. Its mission was to ex- Beyond agriculture, the company has also invest-change ideas and experiences with Algerian producers ed in Algeria’s real estate business and is representa-and seek out opportunities for partnerships between tive of Algeria’s private-sector entrepreneurism that isthe two countries. beginning to gain a higher profile. During the visit, the US wheat growers delegation held Mr Benamor is one of several prominent Algeriantalks with representatives of the Benamor Group, a businessmen increasing their involvement in the coun-leader in Algerian agro-industry and part of an associ- try’s long-overlooked hotel and tourism sectors. With aation that is driving forward improvements in wheat qual- view to diversifying the company’s interests, he is onity. The visit came just a few months after US Ambassador the lookout for specialists in the construction, interiorto Algeria Henry Ensher had also visited the Benamor design and hotel furnishing trades to help him developGroup at the same location. a 2,000-bed resort near El Tarf on the Tunisian border. According to Laid Benamor, General Manager of the The Benamor Group also reflects an increasing trendBenamor Group and President of the Wheat Quality Im- in Algeria’s private sector to improve corporate socialprovement Network, the February meeting helped to responsibility. “We have a lot of projects and want toopen discussions on “serious prospects for Algerian- help citizens. The first step is to create more and moreAmerican relations in the area of wheat production and employment; we focus on this above doubling our rev-marketing for the great benefit of such an important enue. It is our priority,” says Mr Benamor. “By doublingsector of food production in Algeria.” employment we are at the same time trying to main-The Benamor Group was founded in 1984 and is a lead- tain a solid purchasing power.”