Potential market

(posted on 3/10/2019)

A key player in the region, Algeria is committed to diversifying its economy and developing high value-added sectors.

Algeria is the largest country in Africa in terms of area. According to the latest report by the United Nations Development Programme (UNDP), it has the continent’s second-best human development index (HDI), measuring GDP per capita, life expectancy and education levels.

In 2018, the country’s GDP amounted to $178.3bn, with a growth rate of 2.3%. The services sector accounts for 44% of GNP and employs almost 60% of the working population. Hydrocarbons account for 19%, agriculture 12%, construction 12% and industry just 6%. The main activities in the manufacturing sector are food processing, textiles, chemicals, metals and building materials.
The Algerian economy is extremely dependent on income from hydrocarbons. It is the country’s main source of income, accounting for 94% of export revenue. However, for a few years now, the government has shown a strong commitment to diversifying its economy and improving the business climate. High value-added sectors, such as agribusiness, renewables, services and the digital economy, have benefited from significant investment.

High-potential sectors

Several sectors enjoy remarkable potential. The fast-growing automotive sector is Africa’s second largest market and a number of foreign car manufacturers have located facilities there.

The pharmaceutical market is the continent’s third largest. It is growing by 10% per year and over 60% of the requirement is met by local production. In the petrochemicals industry, twenty projects will be completed by 2024.
In the renewables sector, an ambitious EU-funded programme is underway. The penetration rate for mobile phones reached 109% in 2017 as a result of imports and the arrival of international brands.
Agriculture has seen average growth in excess of 7% for the last five years. The main crops are wheat, barley, oats, citrus fruits, wine-grape growing, olives, tobacco and dates.
The agri-food industry has been flourishing over the past fifteen years, particularly the cereal, milk, water and beverages sectors.
Finally, in hotels and tourism over 2,000 new projects were approved in the decade 2008-2018.

Algeria’s top export destinations are Italy, Spain, France, the USA and the UK. Its main import suppliers are China, France, Italy, Spain and Germany. There is a genuine spirit of cooperation between France and Algeria resulting from our historical ties as well as our geographic and linguistic proximity. French is often the second most widely-spoken language, after Arabic. 450 French companies are established in Algeria and 6,200 have Algeria as an export market.
In 2018, France accounted for 10% of Algerian imports and 11% of exports (see below for the main sectors concerned).