Algeria’s economic shifts and policy moves this week

Trade, energy, and regional ties reshape Algeria’s economic outlook

The Trans-Saharan Gas Pipeline (TSGP) broke ground on September 10. The $13 billion project will span 4,128 km from Nigeria to Algeria, with a capacity of 30 billion cubic meters (bcm) per year. Algeria’s state-owned Sonatrach holds a 45% stake, Nigeria’s NNPC 30%, and Niger’s NNP 25%. First gas deliveries to Europe are scheduled for 2028. The pipeline will cross three countries, requiring coordination with Niger’s military government and Nigeria’s federal authorities.

Despite a 40% surge in global gas prices in 2023, Algeria’s revenue from gas exports rose only 8.2% year-on-year. Long-term contracts with European buyers, signed before the Ukraine war, capped prices at $10–12 per million British thermal units (MMBtu), below the 2023 spot market average of $16.50. Sonatrach renegotiated some contracts in 2024, securing a 12% price increase for 2025 deliveries.

Infrastructure and housing: state-driven expansion continues

The population reached 46.5 million in July 2024, up from 45.3 million in 2022. Urbanization stands at 73%, with Algiers, Oran, and Constantine accounting for 38% of the total. The housing deficit remains at 1.2 million units, down from 1.5 million in 2020. Private developers now supply 40% of new housing, up from 25% in 2018.

Industrial zones expanded to 78 in 2024, up from 52 in 2020. The government offers 10-year tax exemptions for manufacturers setting up in these zones. Automotive, pharmaceuticals, and agribusiness account for 65% of new investments. The Tiaret industrial zone, inaugurated in June, attracted $1.2 billion in commitments, including a $300 million Renault plant.

Transport and logistics: partnerships and regional integration

Algeria and Mauritania finalized a roadmap for a $1.5 billion trans-Saharan highway. The 2,300 km route will connect Algiers to Nouakchott, reducing travel time by 40%. A joint customs agreement, signed on September 12, eliminates tariffs on 85% of goods traded between the two countries. Bilateral trade reached $1.2 billion in 2023, up from $850 million in 2020.

Algeria and Oman signed three transport agreements on September 14. The deals cover maritime cooperation, port management, and a direct shipping line between Algiers and Muscat. Oman’s ASYAD Group will invest $200 million in Algeria’s port infrastructure by 2027. The Port of Djen Djen, Algeria’s largest, handled 1.8 million TEUs in 2023, a 9% increase from 2022.

Urban transport projects resumed after delays. The Algiers tramway, halted in 2023 due to funding issues, restarted construction in September. The $1.1 billion extension will add 12 km and 18 stations by 2026. The Oran metro, 60% complete, is scheduled for a 2025 launch. The government allocated $3.2 billion for urban transport in 2024, up from $2.1 billion in 2023.

Elections and youth: political stability amid low engagement

Youth participation in politics remains low. Only 28% of voters aged 18–30 cast ballots in the 2021 legislative elections, compared to 45% for the 50+ demographic. The government launched a digital voter registration drive in September, targeting 5 million new registrations by 2026. Tebboune’s administration has also increased youth representation in local councils, with 30% of seats now reserved for candidates under 35.

Tebboune, 79, has framed youth as central to Algeria’s economic strategy. His September 15 speech emphasized startups, vocational training, and diaspora investment. The government’s “Youth Employment Program” aims to create 500,000 jobs by 2027, with 60% in digital, renewable energy, and agribusiness. The program includes $2 billion in low-interest loans for young entrepreneurs.

Maghreb and regional economic ties strengthen

Tebboune reaffirmed support for Tunisia amid its economic crisis, pledging $500 million in financial aid and a 30% increase in gas supplies. Algeria’s gas exports to Tunisia rose to 1.8 bcm in 2023, up from 1.2 bcm in 2020. The two countries also agreed to link their electricity grids by 2026, with Algeria supplying 500 MW to Tunisia.

The Gulf-Maghreb alignment deepened. Saudi Arabia’s Public Investment Fund (PIF) committed $1.5 billion to Algerian renewable energy projects in June. The UAE’s Mubadala invested $800 million in Algeria’s phosphate sector in 2023. Oman’s ASYAD Group, as noted, is expanding port investments.

Housing and gender: structural challenges persist

Homelessness remains a concern. The government estimates 120,000 people lack permanent housing, with 60% in urban areas. A pilot project in Constantine, launched in 2023, provided 1,200 temporary units. The program will expand to Oran and Annaba in 2025.

Gender equality in the economy saw limited progress. Women represent 18% of Algeria’s workforce, unchanged since 2020. The informal sector employs 65% of working women, compared to 45% of men. A 2024 World Bank report noted that Algerian women earn 30% less than men for equivalent roles. The government’s 2023–2027 economic plan includes tax incentives for companies hiring women in STEM fields, but no enforcement mechanism exists.

Tourism and cultural sectors: niche opportunities emerge

Jules Verne, a French tour operator, added Algeria to its Africa portfolio in September. The company will offer 10-day cultural tours, targeting 5,000 clients annually by 2026. The government’s 2024 tourism budget increased to $450 million, up from $300 million in 2022. Visa requirements for EU and Gulf citizens were relaxed in June, reducing processing time to 48 hours.

The film and creative industries gained traction. Algerian visual artist Ken, known for cinematic photography, secured a $200,000 grant from the Arab Fund for Arts and Culture (AFAC) in August. His work, exhibited in Dubai and Paris, focuses on urban life in Algiers. The government’s 2024 film fund, at $15 million, is the largest in North Africa.

Week’s highlights: a snapshot