Algeria steers aways from oil dependence with diversification plan
Algeria is taking steps to leave its long-time dependence on hydrocarbons in the past. On April 18th, the World Bank commended the country’s “bold course toward economic diversification.” Amid volatile oil prices and the global push for decarbonization, this shift positions the country for a more sustainable future.
While over 90 percent of Algeria’s revenue has historically come from oil and gas, non-hydrocarbon exports have tripled since 2017, reaching 5.1 billion dollars in 2023. Key exports now include fertilizers, steel products, and cement. According to the World Bank, this marks a “profound shift” and push to “attract foreign investment.” The Algeria Economic Update for 2024 further highlights that recent efforts to diversify the economy beginning to yield “tangible results.”
The World Bank cited the Algerian Port Community System (APCS) as central to transformation efforts. Launched in July 2021 and developed with World Bank expertise, the digital platform “connects all port stakeholders and reduces cargo clearance times by linking customs, shipping lines, and exporters on a single interface.”
Beyond this, key structural amendments, such as Algeria’s 2022 Investment law, have been crucial gateways for foreign and domestic investors, introducing incentives like “tax exemption, customs duty waivers, and streamlined administrative procedures, through the newly established Algerian Investment Promotion Agency (AAPI).” The AAPI has also launched an online platform to simplify investors’ journeys as much as possible.
The agricultural sector is also making notable strides, particularly in fresh food exports thanks to the expansion of the National Accreditation Agency (ALGERAC). ALGERAC ensures Algerian food products are up to global standards, an important step if the country hopes to compete seriously in the international market. By 2024, the number of accredited laboratories jumped to 135, a 75 percent increase from 2021.
While these efforts to diversify are promising, they remain limited as non-hydrocarbons still only account for 2 percent of Algeria’s GDP. To sustain and expand this endeavor, the World Bank urges Algeria to adopt carbon pricing, diversify export markets, and strengthen value chains in high-potential sectors.
World Bank, Maghrebi
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