Algeria is one of the largest and the most open economy of the African Continent. The foreign trade in Algeria represents 57% of the total GDP. The economic activity is mostly dominated by the agriculture sector and the rebound of Oil and gas activities. Being blessed by eighth-largest reserves of natural gas in the world it ranks 15th on the position of oil reserves. and is the fourth-largest gas exporter in the world. The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria’s significant consumer base and hydrocarbon wealth offer significant business opportunities in Algeria. Algeria ranks at 163rd position in the world, according to the ease of doing business report by the world bank.
Algeria remains the most lucrative yet the most challenging economies for the international Businesses. With the most recent announcement of Public spending initiative, the government of Algeria has decided to target the non-hydrocarbon sectors. Public contracts in Algeria have acknowledged imperative growth for long-term business prospects like the US and Europe. While the government is enthusiastic about the bringing in more foreign investments, opportunities are been diversified to other sectors apart from the mainstream.
The country being overly dependent on hydrocarbons exports, Government tenders in Algeria has been largely driven by other sectors like construction, pharmaceuticals, real estate and tourism. Financial institutions like UNDP, Eu, AFDB are constantly inviting tenders in Algeria to boost the economic growth. For instance, European union has recently called for ICB tender invitation in Algeria for procurement of technical assistance into local development. Moreover, the state government is also been actively driving procurement as per the need of the sector. State Ministry tenders in Algeria are prominent among agriculture, defence, education, vocational training etc sectors.
Algeria’s bright sectoral prospects offer immense business opportunities for international players. It has been seen that over the last few years large scale public contracts in Algeria has been awarded to foreign contractors. The foreign companies established in Algeria has increased from 3 % i.e, from 810 into 1,008 in 2013. Moreover, regular deployment of Global Tenders from Algeria published by the authority on the portals are proving imperative to bring in investments.
Apart from investments government is also focusing on creating a suitable infrastructure to drive growth. The government in its mission has planned 90 million$ investments into major infrastructure projects in Algeria. The government plans to create 4 additional refineries in Algeria, financial measures are being taken in order to implement the projects. Moreover, the ministry of Energy has initiated 400mw of solar energy project in Algeria to be completed by 2018. Over the years private players are also being encouraged to participate in government projects in Algeria. For instance, GICA, a Chinese equipment manufacturer has recently inked a project agreement to build a cement plant in Zahana by 2018. Ministry of Energy and Mines has come up with a potential initiative of construction of a petrochemical plant
with an annual capacity of three million tonnes in Algeria by 2018. Looking at Algeria’s investment partners, the country has been thoughtful about going beyond the US and Europe. The government has also encouraged participation from emerging economies like Asia. according to the experienced shared by the companies that venture the market through government, tenders have reported double-digit growth in the market.
Algeria is the epitome of high reward economy, that can be flooded with potential foreign investments nearly in every sector. The government has been taking sustained and constant measures to make it a competitive economy in the coming years.