The Economy of Algeria

Algeria is an Arab country located in the subcontinent of North Africa. It currently borders the Mediterranean and possesses a section of The Sahara within its borders. Algeria now hails as the largest Arab country by land mass. And is as such, the tenth largest country in the world.

The economy of Algeria has seen a marked rise in recent years. In fact, due to proper excavation of its natural gas reserves, Algeria is now one of the Arab powers. Moreover, Algeria also has the world’s second largest oil reserves. Thus, Algeria has secured itself in the following economic unions:

  • The African Union
  • The Arab Maghreb Union
  • The Arab League
  • The OPEC
  • The United Nations

However, these improvements are fairly recent as Algeria has had its fair share of tumultuous history. Possibly dating back to its colonization by the French from 1830 to 1962. After its independence, Algeria had several decades of economic decline, making the country struggle financially. These struggles were further exacerbated by the civil war that occurred until 2002. However, afterwards, with the help of their export industry, Algeria managed to slowly piece together their economy.

Now the country enjoys having the highest Human Development Index of all landlocked African countries. As of 2019. Algeria ranks 85th out of 180 countries in terms of the Human Development Index and export goods of Algeria. Moreover, they are also doing very well in terms of GDP per capita. In fact, for their current population of 41.32 million people, they now have a nominal GDP per capita valued at $4,237.

So how did Algeria improve its economy so vastly within such a short span of time? Experts point to its export industry. Worth an estimated $34.37 billion, this makes it the 56th largest exporter in the world and the beautiful culture of Algeria. A recent census conducted on the export industry in Algeria showcase that 97% of their export revenue is made from petroleum and its products. The country’s main export partners are Italy, Spain, France, Brazil, The United States and The Netherlands.

The top exports of Algeria are as follows:

  • Petroleum Gas (This export makes up 42% of exports with a value of $15.6 billion.)
  • Crude Petroleum (This export makes up 32% of exports with a value of $12.8 billion)
  • Refined Petroleum (This product makes up 18% of exports with a value of $6.89 billion.)
  • Ammonia (This product makes up 1.1% of exports with a value of $ $426 million.)
  • Nitrogenous Fertilizers (This product makes up 0.85% of exports with a value of $ $318 million.)
  • Raw Sugar (This product makes up 0.65% of exports with a value of $244 million.)
  • Tropical Fruits (This product makes up 0.18% of exports with a value of $67.6M.)

To read an in-depth article on Algerian Exports, you may do so here. While it is not mentioned as a major export, tourism contributes greatly to Algerian economy as well. A recent census showing that the country made an average of $207.30 Million in 2017in revenue generated from the tourism sector.

Therefore, when considering conducting business in Algeria, it is always wise to study the country’s trends. Would it be better to invest in a popular business activity or to invest in a gap in the market?

Sadly, despite its powerful export industry, Algeria was given an economic score of 46.2. A relatively low score. This makes Algeria rank 171st in the world with regards to freedom of economy. However, Algeria has shown an upwards trend in improvement over the past decade. Thus, eventually the country will rapidly increase its score.

In 2017 Algeria had a public debt of 27.5% of its GDP, a figure which has fortunately decreased in 2019. Moreover, Algeria has seen a drop in its unemployment rate in the current decade, from 13.8% in 2007 to 11.7% in 2017. This could be due to the minimum wage being set at 18000 Algerian Dinars per month in 2012.

Before moving on towards a business venture in Algeria, it is recommended to study the culture of the country first. This is because by understanding the culture, you will have an intrinsic knowledge of your customer base. This in turn, will help you vastly in terms of expanding your company and rooting itself as a trustworthy business.

See how to obtain a visa in Algeria


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