Overview of the national economy
Thanks to a strategic geographical location, at the center of the Mediterranean region, connecting Africa, Europe and the Middle East, Algeria offers tremendous opportunities for its economy as well as to its partners.
Algeria is the only country that connects the Mediterranean area to the heart of Africa through an Algerian-built highway crossing the Sahara Desert. Algeria can rightfully boast immediate access to seven (7) border markets in neighboring countries.
Reasons to Invest in Algeria
I- An economic stability (data for 2016)
- GDP: $ 160 billion / GDP per capita: $ 4,000 / GDP real growth rate: 4% (Source ONS) / GDP real growth rate excluding hydrocarbons: 5.5 (Source ONS).
II- 05 priority sectors to be developed
- Industry : 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, leather and timber products, wood and furniture industry, and Mines.
- Tourism: raising the value of Algeria Destination
-Implementation of a Tourism Quality Plan (PQT) /Development and qualification of the offer by investing in tourist centers and villages of excellence/Public-Private Partnership to strengthen the Tourism Channel.
- Agriculture: focuses mainly on the permanent support of food security and the rural areas development.
- Renewable Energies and Energy Efficiency: For the installation of a capacity of 22000MW by 2030, of which 4500 MW by 2019. This program concerns solar, thermal, biomass and wind.
- Information and Communication Technologies: which concerns the development of the digital economy, technology parks, the introduction of e-money and e-services, data and data base security, etc.
III-Functional and modern infrastructure in conformity with international standards
- Roads: 112,039 km of roads and highways (40th network World, 3rd in Africa) of which 29,573 km of national roads.
- 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 ( more than 53 km of jetties; More than 59 km of quays plus landing stage; More than 1,500 ha of water surface; More than 790 Ha of land; 31 oil and gas landing stage).
-Railways network: 4498 km of railway network, of which 3854 km of operational lines and 2,380 others under way of construction;
IV-Qualified, young and competitive labour force (97 universities, 10 university centers, 20 national schools, 7 normal schools, 12 preparatory schools)
- 5.5% of GDP to education / 86% literacy rate /6.24% of the state operating budget for higher education/63.6% of the Algerian population training age annually
V-competitive production factors costs
- Energy: Natural gas: 0.21 to 0.40 Euros / therm + Electricity: 1 to 4 euro cents / kWh on average + Gasoline super 0.30 euros / L Gas Oil 0.17 euros / L
VI-Incentives for investment
- Important tax incentives, up to 10 years of exemption, depending on the location and size of the project.
- Partial or total reimbursement of expenses related to infrastructure works within the south and highland areas and areas the development of which requires a contribution from the State;
- The concession of land by mutual agreement, over periods of 33 years renewable and giving rise to the same property rights arising from sales
- Tax exemptions throughout the life of the project for exporting projects.
- Temporary Exemption for 5 years, of companies benefits tax (IBS), Global Income tax(IRG) and Tax on the turnover and 3%bonus of the interest rate on bank loans granted to investments in certain activities within the steel and metal industrial sectors, the hydraulic binders and Electrical Appliances, Industrial chemistry, mechanics and automotive Pharmaceuticals, aerospace, shipbuilding and repair, advanced technology, food processing, textiles and clothing, leather and derivatives, wood and furniture industry.
- Support by the Public Treasury Administration, of the bank interest for investments made by industrial companies for the acquisition of technology and mastery to enhance the industrial integration rate of their products and competitiveness.
- Extension until 31 December 2019, of the application of reduced rate of customs duty on acquisitions of equipment and furnishings not produced locally by hotel standards and within the scope of modernization and upgrading under the “Quality Plan Tourism Algeria” -The list of equipment and furnishings concerned is determined by the interministerial order of March 2, 2014.
- Reduction of charges of contribution to social security (recruitment of young job seekers)
VII-Supports in matter of financing through public banks: A network of 29 banks and financial institutions
- Interest rate to 5,5 % / A discount of 2%, it may reach 4.5 % (Tourism project in the South)
- The existence of Leasing Companies / Availability of investment funds /FNI contribution to 34% in major projects / 05 Investment Funds covering the whole territory: participation up to 49% in the capital of SMEs- Possibilities to recourse to financial institutions guarantees: Guarantee Fund to Credits for Investment CGCI, the Credits Guarantee Fund for SMEs
VIII-An intensified protection and international arbitration agreements: membership to international investors 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 (source DGI)