General Information
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Introduction
This profile of Algeria and doing business there is an overview. From the drop-down menus at the top of this page, you can access a wide range of additional business information on Algeria provided both by and by our .
The first drop-down menu provides access to more detailed pages on the Algerian economy, as well as to profiles of Algerias major industry sectors, particularly oil and gas, chemicals and mining.
The second drop-down menu allows you to access profiles similar to this one for other countries of the world.
The third drop-down menu allows you to search our various databases of Algerian business information. This includes companies, organisations including government departments, personalities, projects and facilities.
Finally, the fourth drop-down menu allows you to access a range of Internet applications aimed at assisting you to conduct business more effectively.
The news headlines on this page are updated on a daily basis. You can click on Other News at the end of the headlines in order to get the countrys business news stretching back over several years. Because this overview is only updated every few months, you should use recent news items to build an up to date picture of the Algerian business environment.
Geography
Algeria is situated in North Africa. It borders the Mediterranean Sea. It is bordered by Morocco, Libya, Mali, Mauritania, Niger, Tunisia and Western Sahara
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Algiers is the capital city as well as an important port. The country has a number of ports with Bejaia, Dellys and Jijel being only three examples.
Politics
President Abdelaziz Bouteflika was elected with a 73.8% majority to the position of president. The Presidents term of office is five years. The next election is set to occur in 2004. The parliamentary elections are to be held in June 2002.
An overwhelming majority of the population voted to support the Presidents referendum to bring the conflict in the country to an end. The conflict is at least ten years old. Unfortunately, there still seems to be no real end in sight as fighting still persists. The conflict started when the army challenged election results which would have meant that Muslim extremists would have power.
Details of government offices can be found via our personality search. These details are difficult to maintain and we welcome feedback on changes and missing information.
Economy
The Algerian economy centres on exports of crude oil, piped and LNG and condensates mainly to the US, Italy and Spain. Total exports in 2001 stood at US$19.1 billion. The country is considered to be a low to middle economy. Natural gas exports accounts for over 95% of export earnings and about 30% of GDP.
The overall budget balance weakened in 2001 and the first half of 2002. This deterioration mainly reflected higher spending and a decline in hydrocarbon revenues due to a reduction in volumes and prices. The overall balance dropped from a surplus of 9.8% of GDP in 2000 to a surplus of 3.4% of GDP in 2001, and to a small deficit in the first half of 2002. GDP in 2002 stood at US$55.7 billion and GDP growth at 4.1%. Agriculture accounted for 12.4% of GDP; industry 62.2% of GDP and services 25.4% of GDP (2002).
Algerias domestic production, as measured by GDP, grew by 3% a year on average from 1999 to 2002. By 2001, macroeconomic imbalances grew to sizable surpluses and inflation fell from over 20% in 1994 to 1.4% in 2002. Reserves at US$23.1 billion in 2002 reached their highest level since independence in 1962 and now surpass the countrys stock of foreign debt.
The country adopted a conservative macroeconomic policy stance in 1999-2000. This prudent fiscal stance, coupled with high oil revenues, was reflected in a major strengthening of the balance of payments position, an improvement in the external debt indicators and a decline in the inflation rate.
Average inflation, as measured by the consumer price index (CPI), increased from 0.3% in 2000 to 4.2% in 2001, due in part to a wage increase granted at the beginning of 2001 and to higher food prices. In the first eleven months of 2002, the CPI fell by 2.2% relative to December 2001, mainly due to a drop in food prices. Inflation averaged 2.7% between 1998 and 2002 and stood at 2.3% in 2002.
Foreign investors benefit from tax incentives, including five-year tax relief for companies investing in new projects. Foreign Direct Investment into the country in 2001 totaled US$1.2 billion.
Algeria was rated 107th on the Human Development Index in 2003. High unemployment and inadequate public services continue and government reforms are necessary to create conditions for sustained growth and poverty reduction.
High unemployment makes reducing poverty difficult. The combination of labour force growth (3.4% during the 1990s), labor shedding in public enterprises and the slow growth of employment in the private sector has contributed to high unemployment.
Housing shortages and service provision problems still plague overpopulated urban areas. Although population growth rates decreased from 3.2% in the 1980s to 1.4% in the second half of the 1990s, rapid urbanization continues to fuel large informal settlements. Population in 2002 was at 31.3 million and population growth at 1.6%. Life expectancy is 70 yrs (2002).
An enormous earthquake and violent floods in the earlier part of 2003 left the country devastated and various international donors have coordinated efforts in order to render assistance to the country.
Industry Sectors
The Algerian government has identified the oil and gas industry sector as the most important sectors to generate revenue. Thus, the country’s export commodities are mainly petroleum, natural gas, and petroleum products. Capital goods, foodstuffs and consumer goods remain the country’s main import commodities.
Investment
Even though, the oil and gas industry sector is the most important in Algerias economy, other investment areas such as telecommunications, housing and water projects, also show considerable investment potential, but, much improvement needs to be accomplished in the country’s investment infrastructure and administration, if a high level of foreign investment is to be reached.
Algeria lacks a modern financial services sector and this presents a number of difficulties for potential investors. Efforts to reform the existing financial services sector have progressed slowly. It has become possible for private and public importers to buy foreign exchange at five commercial banks, but, this is on condition that they are able to pay for hard currency in dinars.
The Algerian government have made some positive efforts with regard to investment. The government has granted managers more autonomy by releasing their hold on state-owned company purchase, production and pricing. Privatisation has also progressed with at least 1000 state enterprises being privatised since 1996. Another progressive sign is the fact that corporate tax has been reduced to 30%, this decreases by a further 18% if the profits are re-invested in the company.
Legislation that guarantees the protection of intellectual property rights has also been passed, but, some difficulties have been experienced with regard to legislation enforcement.
Trade
The majority of the country’s export commodities are exported to EU countries. The US and Turkey are also important export partners. Restrictions on export goods are few with the exception of some goods including palm seedlings and sheep.
Although the countrys agricultural sector used to provide for most of its cereal needs, this is no longer the case and thus cereals are now the main import product of Algeria. Algeria is in fact the worlds fifth largest importer of wheat. Consumer goods, food and beverages are also imported in large amounts.
Import licenses are not required although there are some goods that are subject to restrictions. These include firearms, explosives and pork products. This is simply because of security or religious regions. There are certain requirements that have to be met, these include testing, labeling and certification.
As of 2005, Algeria’s main trading partners have been France, Italy, Spain, Germany, the United States, Canada, China, Turkey and Belgium.
Business Travel
There are good connections between Algiers and major European cities. Flights also connect to the Middle East as well as North African cities. There are various ferry services that also exist between Algeria and France. Unfortunately there are no direct flights to Australasia or America.
While in the country it is possible to choose between trains, taxis, buses or aircrafts. The services run quite smoothly although conflict and the desert do have result in some restrictions.
Single or business entry visas to the country take 2-3 days to obtain from any Algerian embassy. It is possible to renew these visas in Algeria.
All foreign cash whether it is in the form of cash or travelers cheques must be declared upon arrival. Visitors are required to exchange AD 1 million worth of foreign currency at the official rate when entering the country. The only legal money exchangers are banks and hotels.
A Currency Declaration form must be filled out in this regard and must be carried at all times while in the country. Any transactions conducted will be recorded on this document. There can be serious consequences if the document is lost and officials are thorough in their perusal of it.
Communications and Infrastructure
The number of telephones in Algeria is quite low with some sources suggesting that there are not more than five phones per one hundred people. Most of the telephone infrastructure is outdated and in desperate need of repair. It is possible to gain access to international phone lines with various satellites in use.
Access to the Internet is available but limited. Licenses to offer Internet access have been offered to private firms but at present there are only two service providers in the country.
The infrastructure is in need of repair with roads often being unsuitable for the transport of goods.
Risk
The main risk in Algeria is the conflict that persists in the country. It is difficult to determine security conditions in the country. A sign of encouragement though is that the government seems committed to ending the conflict.
Legislation is such in the country that one is guaranteed of repatriation. The main problem is the outdated banking system which can cause problems. It would be advisable to obtain risk insurance to guard against the ill effect this could have on a business.
Business Assistance
Algeria has a number of chambers of commerce and industry and details of these can be found via our Organisation Search, as can details of relevant government departments. MBendis Company Search allows interested parties to find details of many Algerian companies.
Memberships (4)
International Finance Corporation, African Union, Multilateral Investment Guarantee Agency, Arab Maghreb Union
Exchanges (1)
Bourse des Valeurs Mobilieres d’Alger
Event Venues (3)
Hilton Hotel, Hotel International, Palais des Expositions
Facilities (53)
Ait Kheir Field, Algiers, Annaba, Arzew Refinery, Ben Kahla Field, Block 208 – Algeria, Block 211 – Algeria, Block 222b – Algeria, Block 245 – Algeria, Block 401a – Algeria, Block 402a – Algeria, Block 403A – Algeria, Block 404 – Nigeria, Block 405 – Menzel Lejmat, Block 406A – Algeria, Bou Khrada, Djebel Onk, El Agreb Field, El Gassi Field, Haoud Berkaoui Field
Travel Facilities
| Accommodation (49): | Centre Touristique, Club Azur Plage, Grand Hotel, Grand Hotel Mercure Alger Aéroport, Hilton Alger, Hilton Algiers, Hilton Hotel, Hotel Adef, Hôtel Albert, Hotel Amraoua, Hotel Cirta, Hôtel Club Alloui, Hotel De La Baie, Hotel Du Souf, Hôtel El Bordj Ed -Dahabi |
| Attractions (28): | Ahaggar National Park, Assakrem Sunrises, Belezma National Park, Cape Caxine Lighthouse, Chrea National Park, Cuicul, Djudjura National Park, El Kala National Park, El-Oued Carpet Market, Ghardaia Carpet Market, Gouraya National Park, In Salah Sand Dune, Ketchaoua Mosque, Macta Ramsar Wetland, Mansourah |
| Restaurants (13): | Centre de Thalassothérapie de Sidi Fredj,Spa, Complexe Hôtelier sophotel,Sarl, Groupe Lalaoui, Hôtel panoramic,Spa, Hôtel Royal, Sarl, Hôtel saf saf, La Casbah Restaurant, Moncada Restaurant, Résidence chrea, Restaurant La colomba, Soltane Ibrahim, Station Thermale de Hammam Bouhadjar, Village Touristique SYPHAX |
| Transport related: | Algiers Port |
