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Factors That Drive Investment in Algeria

Algeria and China are strategic partners, their friendship runs deep. The two countries established diplomatic relation some 59 years ago. Over the years they have been supporting, trusting, and cooperating with each other and they maintained regular political exchanges and continued to keep close consultation and coordination in regional and international affairs.

In 2014, Algerian President Abdelaziz Bouteflika and President Xi Jinping were elevated the relations between the two country to a Global strategic partnership, which is the first Global strategic partnership China has established with the Arab countries.  

China is the first economic partner of Algeria, there are currently more than 1000 Chinese companies active in Algeria, including 100 companies with headquarters and branches, and more than 55.000 Chinese residents in my country, and we highly encourage more Chinese companies to invest in Algeria in various sectors.

Furthermore, business-friendly climate, Algeria is one of the important economic of Africa, with an area of 2,381,741 square kilometers; Algeria is the tenth-largest country in the world, and the largest in Africa, the Mediterranean Rim and the Arab world. 

As part of the program of the President of Algeria His Excellency Abdelaziz BOUTEFLIKA, Algeria has launched a strategy to grow its economy with the specific aim of improving the competitiveness of its national commerce. The key of this economic policy is promoting Algeria as destination and attract foreign direct investment in order to, on the one hand, reduce the number of imports, and on the other hand, diversify national exports.  

There are several fields of investment in my country, the petrochemicals industry remains the leading recipient of foreign investment. Outside of the oil and gas industry, the investors are showing an increasing appetite for opportunities, especially chemicals and metallurgy, telecommunications, construction, agriculture and tourism.

Many factors affect the amount of investment that pours into Algeria, the most important are:

A great source of energy and natural resource

Algeria has substantial and diversified natural wealth, especially in hydrocarbons, where it occupies the 15th range infield of oil reserves (45 billion of tons in oil equivalent), the 18th in field of production, and the 12th in exports.  

Its capacities of refining may reach 22 million of tons per year. Concerning the gas, Algeria occupies the 7th range inthe world in field of proved resources, the 5th in production and the 3rd inexports.

A real giant of energy, Algeria, strong of its reserves, production and exportation of natural gas, has no rival in the Mediterranean where it is ranked the 1st oil and natural gas producer and exporter. Algeria is also the third supplier of the European Union in naturalgas. Algeria has also a solar potential: 3000 hours of sunshine per year.

In addition to these resources, Algeria hides in its underground huge deposits of iron phosphate, Zinc, Uranium, etc.

This abundance of energy and naturel resources contributes to the success of any investment project in Algeria.

 

Qualified Human resource

Qualified human resources are our most valuable asset and one of our wisest investments for the future. Algeria has given an important place for education in its national policies; there are some 8.5 million students in primary and secondary schools in the country (5.5% of GDP devoted to education). Algerians enjoy free education, which is compulsory up to the age of 16 (86% literacy rate)  

There are 1.5 million students in higher education including 35,000 registered in doctoral training and 90,000 intechnical areas in 106 universities spread over 48 provinces, covering the entire national territory (6.24% of the state operating budget goes to higher education). There are also 2, 500, 000 graduates since 1962, and 643,700 enrolled in vocational education with an average of 200,000 graduating every year.

In addition, there are centers for professional training at the level of most communes.

This qualified labor force is a good opportunity for the investors in Algeria.

 

Infrastructures

Algeria has an important network of infrastructure, especially in field of transport, which plays a major role in facilitating the movement of goods.  

The Algerian road network is the densest in Africa:  

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

The East-West Highway is a major infrastructure project. It is a, 1216 kilometer-long highway, linking Annaba in the extreme east to the Tlemcen in the far west.

Algeria is also crossed by the Trans-Sahara Highway, which is now completely paved. This road is supported by the Algerian government to increase trade between the six countries crossed: Algeria, Mali, Niger, Nigeria, Chad and Tunisia.  

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  

This infrastructure facilitates the access to border markets, the Mediterranean Sea on the North and all the regions in the world.  

Advantages of the Algerian market

The Algerian market is one of the important markets in Africa and the Arab world, it contain in particular:
- 40 million consumers
- $ 46. 7 billion of imports in 2016
- $ 262 billion of public investment for the time span 2015-2019

 

Ambitious policies of development and sectors' strategies

The Algerian authorities are putting largesums of money for development (200 billion dollars for the 2004-2009 program, 286 billion dollars for the 2010-2014 program and 262 billion of public investment for the 2015-2019 program).  

The new industrial revival policy highlighting 12 strategic sectors, namely the steel and 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, leatherand timber products, wood and furniture industry as well as outsourcing.
- Agricultural and Rural Renewal Program.  
- Development Plan of Fisheries and Aquaculture Activities by 2025.  
- The Master Plan for Tourism Development.  
- Renewable Energy Program (solar, thermal and wind) to produce 22000MW by 2030.

New law for promotion of investment in Algeria

Algeria has adopted on 3 August 2016 a newlaw on the promotion of investment (Law No. 16-09). The adoption of this Law is part of an approach to improve the business climate in Algeria, initiated by the Algerian authorities.  

The investment projects may enjoy, under the Law No. 16-09, from tax exemptions and reductions, depending on the project location and impact on the economic and social development.  

An intensified protection and international arbitration agreements
- Algeria is membership to international investor’s 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.  

Advantages of agreements signed by Algeria

The Investors benefit from the advantages of the international agreements signed by Algeria, especially the EU-Algeria Association Agreement was signed in April 2002 and entered into force in September 2005 and The Greater Arab Free Trade Area.  

Conclusion

These factors have attracted investors from many countries including Chinese companies, we encourage others investors in China to avail themselves of this possibilities of investment in Algeria.   

There are enormous opportunities. Welcome to investors!

THE AMBASSADOR

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