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Algeria’s construction sector remains buoyant despite the impact of the significant drop in global oil prices, with the government continuing its support for the main social programmes and infrastructure projects as a means of diversifying the economy. A new five-year investment plan for the period 2015-19 worth €233.7bn was approved by the government in late 2014 to build upon the achievements of the first plan of this sort for the 2005-09 period, which was worth €178.4bn, and the 2010-14 plan worth €255.1bn. The real estate market has in recent years seen a proliferation of private property developers seeking to tap into growing demand among the upper and middle classes for mid-to-high-end residential property, shopping malls, quality hotels and tourist resorts. However, demand remains highest for low-income units, which the public sector is looking to address. Supply is constrained as a result of the scarcity of land available for new development, dampening interest among private developers and resulting in the government building much of its new social housing stock in greenfield areas. This chapter contains interviews with Abdelmadjid Tebboune, Minister of Housing and Urban Development; and Samer Khoury, President of Engineering and Construction, Consolidated Contractors Company.

Given the Algerian economy’s reliance on the oil and gas sector, manufacturing industries have historically taken a secondary role in the country’s economic development policies. However, since the early 2000s, industry has received renewed interest from authorities, who have been looking to counteract rising demand for imports and revamp new industrial chains as a means to support massive public investment programmes geared towards infrastructure and housing. Following on from the reorganisation of the industrial public sector in February 2015, decisive steps are now being taken to reduce reliance on imports in a number of manufacturing segments, including automotive, fertilisers, petrochemicals and smartphones. Recent years have also seen key steps towards realising Algeria’s mining potential by enacting a new mining law and developing large-scale projects in the areas of phosphates, iron ore, base metals and gold. This chapter contains interviews with Abdesselam Bouchouareb, Minister of Industry and Mining; Sami Mainich, General Manager, Dow Chemical Maghreb; and Guillaume Josselin, Managing Director, Renault Algeria.

Algeria’s banking sector is characterised by low intermediation and penetration rates, although both have increased dramatically in recent years thanks primarily to ample liquidity stemming from abundant hydrocarbons revenues. In light of the rapid decline in hydrocarbons receipts in late 2014, the authorities have accelerated implementation of planned reforms and announced new measures to empower the sector to finance broad-based economic development. In 2015 important steps were taken to integrate the very large informal economy into the formal financial system. Today Algeria’s banks are seeking new revenue streams as they adapt to the demands of an evolving macroeconomic climate. Algeria’s capital markets offer considerable potential in light of the size of the country’s economy, but have historically been fairly shallow. Few corporate stocks and bonds have traded on the market since it opened in 1998, and the last initial public offering (IPO) was in 2013. Trading has been comparatively light in recent years as investors await the listing of several state-owned companies to increase capitalisation and breathe life back in the markets. The insurance sector has grown more than five-fold since the 1990s, but it still remains small relative to the size of the economy. The market is characterised by low penetration and density of coverage, and is dominated by non-life coverage, representing some 93% of premiums, with automotive lines alone accounting for half the sector’s revenues. Better efforts to raise public awareness, coupled with expanding networks of sales channels, can help the industry navigate the expected risks and challenges precipitated by the drop in oil prices and state spending. This chapter contains interviews with Mohammed Laksaci, Governor, Bank of Algeria; Boualem Djebbar, President, Professional Association of Banks and Financial Institutions, and President, Economic Interest Group; Mohamed Krim, Banque de Developpement Local; and Brahim Djamel Kassali, President, Algerian Union of Insurance and Reinsurance Companies; as well as a viewpoint from Adel Si-Bouekaz, Managing Director, Nomad Capital.

Hydrocarbons wealth has underwritten Algeria’s growth for decades, allowing the country to accumulate huge foreign currency reserves and underwrite a major public spending campaign over the past 10 years. However, the dramatic drop in oil prices since mid-2014 has had an impact. Despite GDP growth of 4% in 2014, Algeria also experienced its first current account deficit since the late 1990s, equivalent to 18% of its GDP. In response to this situation the government has made aggressive plans to boost oil and natural gas production, including increasing onshore exploration, starting production on unconventional deposits and reforming the regulatory framework to improve investment attractiveness. A significant acceleration of its renewables targets is also under way to help meet rising domestic demand. This chapter contains a viewpoint from Salah Khebri, Minister of Energy; and interviews with Francesco Starace, CEO, ENEL; and Touffik Fredj, President and CEO for North-west Africa, General Electric.

With industrial production increasing, construction projects breaking ground and transport activity rising, Algeria’s economy has benefitted from stable growth in a diverse array of sectors. However, oil and gas remain its lifeblood. The economy grew by 3.8% in real terms in 2014, according to figures from the National Office of Statistics, up from 2.8% in 2013. The IMF forecasts the figure to fall to 3% in 2015, before recovering to 3.8% in 2016. The government’s 2016 budget is based on non-hydrocarbons GDP growth of 4.6%. Algeria’s near-term economic prospects will depend heavily on oil price movements, and current price levels are putting the country’s trade and fiscal balances under substantial pressure, which will only increase should prices remain steady or fall further. However, the current environment is also pushing the country to attract more investment and step up long-standing plans for diversification, which could help to put Algeria on a more sustainable economic footing in the long term. This chapter contains interviews with Abderrahmane Benkhelfa, Minister of Finance; Ali Haddad, President, Algerian Business Leaders Forum; Kaddour Bentahar, General Manager, Algerian Customs Agency; Michael Lally, US Deputy Assistant Secretary of Commerce for Europe, the Middle East and Africa; and Mohamed Chami, Director-General, Algerian Chamber of Commerce and Industry.