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Wednesday, 20th February, 2019
 
 
 
 Algeria   ::   News
 
 
Top Investment Opportunities in Algeria
Feb 07, 2019
Source: Ayedero Victor

Hydrocarbons – Oil and Gas

Algeria is one of the world’s top ten producers of both oil and natural gas.  Existing upstream and midstream infrastructure is aging and inadequate to meet Algeria’s near-term production goals.  We expect new investment in these areas, particularly as new undersea gas pipelines to Europe are constructed as well as investment in offshore exploration. In addition to the existing traditional fuels, Algeria has the world’s third largest reserves of recoverable shale gas resources (19.8 trillion m3) spread in 7 regions throughout the Sahara. The country is rich in natural resources. An “OPEC” member, Algeria has the tenth-largest proven reserves of natural gas in the world and is the sixth-largest gas exporter. It also ranks 16th in proven oil reserves. Thanks to strong hydrocarbon revenues, Algeria has a cushion of USD 160 billion in foreign currency reserves and a large hydrocarbon stabilization fund, though the balances of both have fallen since 2013 as a result of declining oil and gas prices. In addition, Algeria's external debt is extremely low at about two percent of GDP. Algeria is still largely unexplored and there are opportunities for foreign firms to invest in joint ventures to find new deposits. State-owned national oil company Sonatrach, the largest company in Africa, owns roughly 80 percent of total hydrocarbon production in Algeria, while International Oil Companies (IOCs) account for the remaining 20%.

According to Sonatrach, about two-thirds of Algerian territory remains unexplored or largely underexplored. Most of these areas are in the north and offshore.

Agriculture sector

Agriculture has become an important contributor to Algeria's socio-economic development. After hydrocarbons, agriculture is the country's second-largest GDP contributor, at around 10%, with 25% of the population employed in the sector. Self-sufficiency with regard to fruit, vegetables and meat has been achieved while cereal, milk production and fishing have been expanded. Algeria is also transitioning gradually from a net importer of agricultural goods into an exporting economy by focusing on the promotion of those particular goods that have a comparative advantage. The agricultural sector is working on raising the standards up to international norms and a new framework for exports is in the process of being constructed.

The liberalization of the Algerian economy policy started in 1994 and the reform of the regulations on investment have produced remarkable results in terms of Foreign Direct Investment (FDI), despite the widespread fall of investment overseas in Africa, Algeria has received a steady flow of investment reaching over 100 billion $. 

Information and Communications Technology

Algerians are increasingly tech-savvy and interested in technology and know-how transfer in the Information and Communications Technology (ICT) sector. Government ministries are also interested in process modernization and the digitization of record-keeping. Home Internet penetration rates remain below 10 percent, but business Internet usage is estimated at over 40 percent. Mobile phones are commonplace, and Algeria is looking toward fourth-generation technology. Other services, such as GPS-based technology, also show potential.

Algeria has deployed and is expanding 3G services and is preparing soon to move to 4G.  Algeria is also seriously considering deployment of a country-wide optic fiber network to provide high quality, reliable, fast and cost effective telephony and Internet services.  The public telephone utility is expected to solicit tenders soon.

 Financial Sector

The finance sector presents enormous opportunities for foreign investors. Its opening to the private sector at the beginning of the nineties has led to the installation of banks including Arab and French.

The non-bank sector remains less developed, although recent reforms in the field of regulation and supervision have laid the foundations for leasing, factoring, and venture capital hence creating room for investment.

The Algerian equity market remains relatively shallow, with only two companies being listed in the Course Algeria

Tourism

Although Algeria is such a tourist attraction, with a varied and rich natural landscape, sea, mountains, desert and the ruins; ancient (Tassili); roman (such as Tipaza, Timgad), and Muslim (Casbah, mosques), the tourism sector remains virgin in Algeria.

In recent years, the Government had a growing interest in politics tourism due to its potential for job creating.

There is also need for modern hotel accommodation facilities as there is modest level of tourism attributable to poor hotel accommodations.

 
 
 
 
 
 
 
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