Algeria’s economy is dominated by its export trade in petroleum and natural gas, commodities that, despite fluctuations in world prices, annually contribute roughly one-third of the country’s gross domestic product (GDP). With an average 3% GDP Growth over the past 15 years, these revenue allowed the country to actively develop its infrastructures and invest in education. Algeria is well aware of the danger of being highly dependent on the oil & gas revenue and with the recent protests leading to the resignation of President Bouteflika, a new President has been elected, forming a government that has taken as first measure in January 2020 to repeal the famous « 51-49 law » (the law preventing any foreign company to detain more than 49% of the stakes of an Algerian company), opening the country to a real foreign investment destination.

INDUSTRY :

The new government formed in January 2020 has designated the development of the industrial capacities of the country as a strategic priority for the following sectors : Metalworking, hydraulic binders, electrical and household appliances, industrial chemistry, mechanics and automotive, pharmaceutical production, aerospace, construction and ship repair, advanced technology, food processing, textiles and clothing, leather and timber products, wood and furniture industry, and Mines.

SUBCONTRACTING :

Well aware of its position in the mediterranean region with several commercial ports facing the European Union and several International Airports, Algeria is actively pushing the development of its subcontracting capacities to feed European factories.

TOURISM :

With 1622 km of coastline on the mediterranean sea nearly virgin of tourism infrastructure and a geography offering ski slopes to giant desert dunes only 2 hours from main European capitals, Algeria is probably the most promising destination for tourism investment for the next 10 years. The country has activated an extremely ambitious programme to promote these investment, with important tax incentives.

RENEWABLE ENERGIES :

Due to its geographic location, Algeria has one of the highest solar deposits in the world. The duration of sunshine on almost the entire national territory exceeds 2000 hours annually and can reach 3900 hours (highlands and Sahara).

The energy received annually on a horizontal surface of 1m² is almost 3 KWh / m² in the north and exceeds 5.6 KWh / m in the Great South. The government has set as target the installation of a capacity of 22000 MW by 2030, of which 4500 MW by 2019. This program concerns solar, thermal, biomass and wind.

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INFORMATION & COMMUNICATION TECHNOLOGIES :

Algeria is coming from very far in what regards ICT as the country had the reputation to have one of the slowest internet in the world. Today Algeria is ranked 35th in mobile broadband, after being 44th in 2018 and 98th in 2016, an increase of 63 positions since 2016. In January 2020 the new government has nominated a Minister-delegate for Start-ups who’s only mission will be to promote the development of the digital economy, technology parks, the introduction of e-money and e-services, data and data base security.

AGRICULTURE :

Agriculture is an important factor in the economy of Algeria. It itself generates, without the food industries, nearly 12.3% of gross domestic product (GDP) in 2017, but with significant variations depending on the year depending on weather conditions. The agricultural sector employed 10.4% of the active population in 2017 with 1.14 million workers.

Since the 2000s, agriculture has become one of the government’s priorities in order to diversify its economy, still dominated by oil production.

The main plant productions are cereals, which are largely in the surface, arboriculture, vegetable crops, in particular potatoes, citrus fruits and fodder. Livestock occupies a significant place, in particular sheep breeding and poultry farming.

In 2014, Algerian agricultural production reached 35 billion dollars, making it possible to meet the country’s needs at 72%. But Algeria must import milk and cereals at a cost of around 4 billion dollars. It is indeed these last two products which constitute the main Achilles heel of national agriculture and which prevent it from achieving, at least in the short term, food self-sufficiency3.

But the increase in its national agricultural production between 2016 and 2018, thanks to the modernization of agricultural production tools and techniques and the generalization of irrigation programs by public authorities, the country is getting a little closer to its objective of food self-sufficiency by 2022.

• Roads: 112,039 km of roads and highways (40th network World, 3rd in Africa) of which 29,573 km of national roads.

• Airports: 36 airports, of which 16 international.

• Ports: 45 maritime infrastructures, of which 11 commercial ports, two oil ports, 31 fishing ports, one (01) marina and 2,200 maritime traffic lights.

• Railways network: 4498 km of railway network, of which 3854 km of operational lines and 2,380 others under way of construction.

• One (01) metro line in Algiers with a length of 9.5 km with three extensions of a total length of 9.4 km underway of construction.

• 3 trams lines (Algiers, Oran and Constantine) and 4 trams underway of construction (Ouargla, Sidi Bel Abbes, Sétif).

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– 5.5% of GDP on education

– 86% literacy rate

– 63.6% of the Algerian population of training age each year

– 96% of school enrollment

– 1.5 million students, including 35,000 registered in doctoral training and 90000 in technical areas.

– 97 universities, 10 university centers, 20 national schools, 7 normal schools, 12 preparatory schools

• Natural gas: 0.21 to 0.40 Euros / therm
• Electricity: 1 to 4 euro cents / kWh on average
• Salary: 180-2000 euros (the minimum wage is set at 180 euros)
• Gasoline: Super 0.30 euros/L — Gas Oil 0,18 euros/L

Important tax incentives, up to 10 years of exemption, depending on the location and size of the project.

And other additional benefits:

• Partial or total reimbursement of expenses related to infrastructure works within the south and highland areas and areas the development of which requires a contribution from the State;

• Reduction in employers’ contribution to social security for the recruitment of young job seekers
The concession of land by mutual agreement, over periods of 33 years renewable and giving rise to the same property rights arising from sales

• Discounts on the price of the rental fee on the land and property acquired within the framework of the realization of the investment

• Tax exemptions throughout the life of the project for exporting projects.

• Temporary Exemption for 5 years, of companies benefits tax (IBS), Global Income tax(IRG) and Tax on the turnover and 3%bonus of the interest rate on bank loans granted to investments in certain activities within the steel and metal industrial sectors, the hydraulic binders and Electrical Appliances, Industrial chemistry, mechanics and automotive Pharmaceuticals, aerospace, shipbuilding and repair, advanced technology, food processing, textiles and clothing, leather and derivatives, wood and furniture industry.

• Exemption from VAT, customs duties, taxes having equivalent effect or any other charge for the equipment needed for investment by industrial companies in the field of research and development.

• Reduction of 50%, companies benefits tax (IBS) or Global Income tax(IRG),in common law for individuals and legal entities, activating and fiscally domiciled in the wilayas of Illizi, Tindouf, Tamanrasset and Adrar, and this for a period of 05 years from the January 1, 2015.

• Support by the Public Treasury Administration, of the bank interest for investments made by industrial companies for the acquisition of technology and mastery to enhance the industrial integration rate of their products and competitiveness.

• Extension until 31 December 2019, of the application of reduced rate of customs duty on acquisitions of equipment and furnishings not produced locally by hotel standards and within the scope of modernization and upgrading under the « Quality Plan Tourism Algeria » -The list of equipment and furnishings concerned is determined by the interministerial order of March 2, 2014.

• Reduction of charges of contribution to social security (recruitment of young jobseekers)
North: 56%to 80%
Highlands and South: 72% to 90%

• Interest rate to 5,5 %

• A discount of 2%, it may reach 4.5 % (Tourism project in the South)

• A network of 29 banks and financial institutions, of which:

* 14 private and 6 public and 9 financial institutions

* 11.400 billion dinars of credit to the economy

• The existence of Leasing Companies

• Availability of investment funds

• FNI contribution to 34% in major projects

• 05 Investment Funds covering the whole territory: participation up to 49% in the capital of SMEs

• Possibilities to recourse to financial institutions guarantees: Guarantee Fund to Credits for Investment CGCI, the Credits Guarantee Fund for SMEs

• Membership to international investors protection conventions, relating to international guarantees and arbitration;
• Signing of 48 bilateral agreements and agreements on the investments promotion and reciprocal protection;
• Signing of 65 bilateral agreements on non-double taxation (source DGI).