Algeria is undergoing a significant transformation as it moves away from its heavy reliance on oil and gas exports towards economic diversification. With support from the World Bank, the country is making strides in broadening its export base and attracting foreign investment. Recent measures have started to show tangible results, as highlighted in the Algeria Economic Update for the second half of 2024.
One of the key indicators of progress is the tripling of non-hydrocarbon exports since 2017, reaching $5.1 billion in 2023. This represents a significant shift in Algeria’s economic landscape, with key exports now including fertilizers, steel products, and cement. While these successes are promising, there is still a need for further expansion and diversification efforts to fully realize Algeria’s economic potential.
Central to this transformation is the Algerian Port Community System (APCS), a digital platform developed with World Bank expertise. This system connects all port stakeholders, streamlining cargo clearance processes and reducing waiting times. The APCS has been instrumental in driving transformative economic impact, marking a significant turning point for Algeria’s trade sector.
In addition to the APCS, Algeria’s 2022 Investment Law plays a crucial role in attracting domestic and foreign investors. The law offers incentives such as tax exemptions and customs duty waivers, making it more appealing for investors to set up operations in the country. The Algerian Investment Promotion Agency (AAPI) has also been established to facilitate the investment process, providing online platforms for easy access to information and incentives.
The agricultural sector in Algeria has also seen advancements in exporting fresh food products, thanks to World Bank technical assistance. Market studies, value chain assessments, and public-private dialogues have helped unlock new opportunities for the sector. Efforts in other industries, such as the leather industry and precision mechanics, have also been supported through capacity-building initiatives and training programs.
To ensure that Algerian products meet international standards, the National Accreditation Agency (ALGERAC) has expanded its reach with support from the World Bank. By developing a strategic plan and providing training on international standards, ALGERAC has seen significant growth in accredited laboratories. This is essential for aligning Algerian products with global standards, giving them a competitive edge in international markets.
Despite these advancements, Algeria still faces challenges in productivity and bureaucracy, especially with the global shift towards decarbonization. To sustain export growth, Algeria must focus on boosting productivity, attracting more FDI, and green its industrial processes. Recommendations from the World Bank include adopting carbon pricing, diversifying export markets, and strengthening value chains in sectors like renewable energy and IT.
Overall, Algeria’s collaboration with the World Bank is crucial in informing its economic transformation. By digitizing trade processes, strengthening institutional capacities, and diversifying export portfolios, the country is paving the way for sustainable growth. The sight of containers filled with a variety of products at the Port of Algiers symbolizes a new chapter in Algeria’s economic story, one that is focused on diversification, growth, and resilience.
