Egypt’s economy is recovering, supported by prudent macroeconomic policies

Egypt’s economy is recovering, supported by prudent macroeconomic policies


In its well-known IMF Country Focus blog, it holds that Egypt’s economy is recovering, supported by prudent macroeconomic policies and initial bold reforms aimed at addressing the major challenges that have confronted the economy in recent years. The task now is to deepen reforms to raise economic growth further, make it last, and spread its benefits to Egypt’s rapidly growing population and its youth and women, the IMF says in its latest economic health check.

Young women in Al-Azhar Park, Cairo, Egypt. The country must integrate its women and youth into the workforce to keep its economy growing (photo: iStockPhoto/jcarillet

Egypt: Time to Entrench Growth and Make It More Inclusive

January 23, 2018

After more than a year since the launch of the economic reform program, GDP growth is strengthening and inflation is declining. The government trimmed the budget deficit, tourism revenues and remittances are increasing, and the country’s foreign exchange reserves have been rebuilt. The floating of the pound and the initial steps to improve the business climate have helped boost growth.

“This macroeconomic turnaround at home and the supportive global economic environment provide a unique opportunity to carry the reform momentum into areas that have historically been hard to tackle. Deep and lasting structural reforms are needed to create jobs as speedily as needed for Egypt’s growing population,” said Subir Lall, head of the IMF team for Egypt.

Below are the IMF’s key recommendations.

Making stability last

Egypt must entrench the stability attained thus far. This entails preserving the flexibility of the exchange rate and further reducing inflation. The government should also continue to lower the budget deficit to contain public debt. For this purpose, the IMF suggests:

  • Collecting more revenue to pay for much-needed social services and to invest in education, health, and infrastructure. Reducing tax exemptions, making the tax system more progressive (richer people pay progressively more in taxes), and making tax administration more efficient will facilitate this process. Revenue could grow by 4 percent of GDP in the medium term as a result, analysis in the report suggests.
  • Eliminating most fuel subsidies, which benefit mainly the rich, and allowing fuel prices to change in line with costs: This would protect the budget from movements in global oil prices and the exchange rate, and safeguard priority spending on social programs and necessary infrastructure.


Egypt launched a reform program when its economy faced rising imbalances that led to weakening growth, high public debt, a widening current account deficit, and declining official reserves. To support the homegrown reforms, in November 2016 the government initiated an IMF-supported arrangement to restore the stability of the country’s finances and promote growth and employment, while shielding lower-income households from the adverse effects of the changes. On December 20, 2017, the IMF Executive Board approved the third installment of the three-year, $12 billion Extended Fund Facility.

Helping low-income families

Although economic stabilization is critical, Egypt also needs to protect its lower-income families. This requires continuously improving the efficiency of social assistance by reducing price subsidies and expanding better-targeted cash transfer programs such as Takaful and Karama to free up resources for those who need them most, while avoiding the buildup of unsustainable public debt.

Letting the private sector flourish

Egypt’s growing population needs about 700,000 new jobs every year, which is possible only if the private sector becomes the main engine of growth. For that to happen, the state—which has a prominent role in the Egyptian economy—needs to step back from certain sectors and make room for the private sector to invest and grow.

To this end, priorities include ensuring fair competition for private companies in the markets for their inputs and products, improving the governance and transparency of state-owned enterprises, reducing the perception of corruption, improving access to financing and land, and integrating more women and youth into the labor market.


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Global Recovery is incomplete with MENA’s Share Modest

The global economic recovery that has started mid-2016 is gaining momentum with growth accelerating according to a report by the International Monetary Fund (IMF) published with however a warning that this 2017 global recovery is incomplete with MENA’s share modest.
Growth in the MENA countries dropped from 5.1% to 2.2% so far in 2017 but is anticipated to get back to 3.2% in 2018.
Political unrest was found to be still hampering and / or delaying economic recovery generally, but more specifically in the MENA region where different tensions subsist in several of its countries. Geo-political risks continue to weigh on all investments whether domestic and / or international.
Nevertheless, Djibouti has the highest growth in 2017 with 7%, followed in this order by Morocco, Egypt, Mauritania, and Sudan and Kuwait.
Yemen, Syria, Iraq would obviously be going through recession because of either their on-going political tension or unrest. The effect of oil prices’ drop would be affecting all hydrocarbons exports related economies of the Gulf and North Africa with budgetary restrictions. With money oversupply in these latter countries, inflation is bound to reach unforeseen heights but is nonetheless forecast to generally reach an estimated 7.1%.

Excerpts of the IMF blog written by Maurice Obstfeld on October 10, 2017, follows;

Global Economic Upswing Creates a Window of Opportunity

The global recovery is continuing, and at a faster pace. The picture is very different from early last year, when the world economy faced faltering growth and financial market turbulence. We see an accelerating cyclical upswing boosting Europe, China, Japan, and the United States, as well as emerging Asia.

The latest World Economic Outlook has therefore upgraded its global growth projections to 3.6 percent for this year and 3.7 percent for next—in both cases 0.1 percentage point above our previous forecasts, and well above 2016’s global growth rate of 3.2 percent, which was the lowest since the global financial crisis.

For 2017, most of our upgrade owes to brighter prospects for the advanced economies, whereas for 2018’s positive revision, emerging market and developing economies play a relatively bigger role. Notably, we expect sub-Saharan Africa, where growth in per capita incomes has on average stalled for the past two years, to improve overall in 2018.

The current global acceleration is also notable because it is broad-based—more so than at any time since the start of this decade. This breadth offers a global environment of opportunity for ambitious policies that will support growth and raise economic resilience in the future. Policymakers should seize the moment: the recovery is still incomplete in important respects, and the window for action the current cyclical upswing offers will not be open forever.

Global recovery still incomplete

First, the recovery is incomplete within countries. Even as output nears potential in advanced economies, nominal and real wage growth have remained low. This wage sluggishness follows many years during which median real incomes grew much more slowly than incomes at the top, or even stagnated. Drivers of growth including technological advances and trade have had uneven effects, lifting some up but leaving others behind in the face of structural transformation. The resulting higher income and wealth inequalities have helped fuel political disenchantment and scepticism about the gains from globalization, putting recovery at risk.

Second, the recovery is incomplete across countries. While most of the world is sharing in the current upswing, emerging market and low-income commodity exporters, especially energy exporters, continue to face challenges, as do several countries experiencing civil or political unrest, mostly in the Middle East, North and sub-Saharan Africa, and Latin America. Many small states have been struggling. About a quarter of all countries saw negative per capita income growth in 2016, and despite the current upswing, nearly a fifth of them are projected to do the same in 2017.

Finally, the recovery is incomplete over time. The cyclical upswing masks much more subdued longer-run trends of productivity and demographics, even correcting for the arithmetical effect of more slowly growing populations. For advanced economies, per capita output growth is now projected to average only 1.4 percent a year during 2017–22 compared with 2.2 percent a year during 1996–2005. Moreover, we project that fully 43 emerging market and developing economies will grow even less in per capita terms than the advanced economies over the coming five years. These economies are diverging rather than converging, going against the more benign trend of declining inequality between countries due to rapid growth in dynamic emerging markets such as China and India.


New Government vs. Social and Budgetary Tensions


Reforms and Bill 2018

Creating three million jobs would require a growth rate between 2017 and 2020 of a minimum of 7 to 8%. The results of the bodies responsible for employment of the ANDI, the ANSEJ as much as of the NACC, are mixed despite their many allowed benefits. This is the New Government vs. social and budgetary tensions dilemma that the country’s newly appointed Prime Minister has to face up to within the remaining time of the president’s mandate.
However, the growth rate is relatively low in reference to public spending of 3% on average between 2000 and 2016.  According to the ONS, quoted by APS, in April 2017, the employed population was estimated at 10.769 million against 10.845 million people in September 2016, registering a negative balance of the 76,000 people where six unemployed on ten on average are long-term unemployed.

Utopias or real socio-economics of Algeria

The International Monetary Fund (IMF) report on the global economic outlook for Algeria shows that if in 2016, the growth of the real GDP was 4.2%, the situation could significantly deteriorate in 2017 and 2018. Indeed, the IMF expects growth of 1.4% of GDP in 2017 and 2018, the Algerian economy should know a stagnation, with a growth rate of its GDP of only 0.6%.

A direct result of this economic slowdown would be the unemployment rate that should substantially increase over the same period and is estimated at 13.2% in 2018 with an inflationary trend always according to the IMF that we are trying to compensate by creating jobs with very low added value. This is mainly due to the decline in spending in infrastructure, up to now key engine of growth and the business climate.

Similar countries with spending of a 1/3 of that of Algeria have more significant growth rates.

What will happen if the oil price stagnated at 50 – 55 Dollars a barrel or even less at between 40 – 45 dollars? Would the risk of social tensions in the case of dwindling financial resources, while posing no problems for three years be on the increase? But what are the $100 billion of foreign exchange reserves in July 2017, with an output of currency goods-services and capital transfers of $60 billion and inflows of foreign currency of only $29 billion or $32 – 35 billion dollars by end of 2017 if the price of a barrel is maintained between $50 – 55 despite all restrictions on import?

According to various statements of Mr. Ahmed OUYAHIA, prior to his appointment as Prime Minister saying : “If we don’t get over not standing on the economic plan, we risk ending up at the IMF” So what to do?

Contents of the Finance Act 2018?

  • Would we still hold on, in the Finance Act 2018 for budgetary calculation the $50 dollars a barrel like for 2017’s?
  • Would we above the regular 11% tax?
  • Can we have a VAT increase from 7% to 9% for the reduced rate, and 17% to 19% for the higher band even with the risk of inflation and unfair indirect taxes applied to all; direct tax being a sign of a greater citizenship?
  • Will we restrict all spending: where the capital budget that has been reduced to $22 billion by 2016 as a result of the latest budget cuts as much as the operating budget of about $41 billion that is incompressible unless of a deep public service redesign?
  • Will we establish a tax of wealth as based on accurate assessment of the distribution of income and the model of consumption by social strata and mastering of the importance of the informal sphere?
  • Will we to avoid external debt go towards a de-monopolisation program and further privatization with partial or total transfer of ownership of a number of public companies whose financial situation is deteriorating due to workload and management issues where Public Treasury has supported for more than $70 billion dollars in sanitation between 1974 and 2016 or with over 70% returned to the starting block?
  • Will we go for targeted subsidies where according to the Government about $18 billion was spent transfers in 2016, while revenues in foreign currency during the year fell by $37 billion,?

What will the socio-economic policy be?

  • Will it always use the Dinar (DZD) skidding to more than DZD127 a Euro as a means of adjustment of the deficit of the balance of payments?
  • Would the current industrial policy lead the country to debt therefore dependence and to correct it how would a dynamic industrial sector which represents less than 5% of the gross domestic product and 80 / 85% of raw materials of public and private sector coming from overseas and what would without proper analysis, the rush into car assembly plants with a low rate of integration bring?
  • Will we still keep to that out of date policy from the 1970 – 1980 years at the time of the fourth economic revolution looming between 2020 and 2030 as based on good governance, the economy of knowledge and environmental challenges?
  • What will a program that is dated, accurate and taking into account of the transformation of the new world of structural reforms to combat the prevailing central and local bureaucracy through to a real decentralization of the financial system onto a social and educational system as hub of the creation of value and the thorny problem of land?
  • Will we hang on to the same 2009 ownership share rule as applicable to all sectors instead being targeted and thus encouraging FDI in nonhydrocarbon sectors?
  • What will the proposed import licenses without any strategic vision nor taking into account that the Algerian economy is dominated by the service sector where small trade and services represent 83% of the economic area with dominance of the informal sphere?
  • How to apply one of the articles of the new Constitution and not differentiate the State sector from that of the private sector for all national and international creation of wealth enterprise by the lifting of all constraints of the business community?
  • And finally how do we go about organizing an economic and social dialogue so as to carry out reforms with economic and social credible intermediation?

Strategic vision within the new world

All political, social and economic actors are riveted to the presidential deadline of April 2019, but maintaining the status-quo until then could be suicidal. We must as of now envisage through the right strategic vision certain short-term economic policies and not appearances that might increase economic and social tensions and ultimately lead to a further deterioration in the purchasing power of the Algerians.

Any increase in the rate of inflation will involve primary banks interest rates rising, to avoid bankruptcy and discouraging investment. Without structural reforms related to good governance, there may not be genuine development in Algeria with the added risk of returning to the IMF in 2019 – 2020.

There are, for Algeria, opportunities to increase its growth rate because of its substantial potential that despite the crisis would assume a new strategic governance

The major challenge for Algeria would mean to implement operational instruments capable of identification, to anticipate changes in the behaviour of the economic, political and social actors at geostrategic level.

There is a dialectic link between development and security, and because without sustainable development there is necessarily increase of insecurity which has a growing cost. Strategic objective must reconcile modernity and authenticity, economic efficiency and a deep social justice if Algeria wants to avoid its marginalization from within the global societies. The passage of the status of ‘support against the rentier economy’ to that of the rule of law “based on work and intelligence” is a major political gamble since it simply involves a new social contract and a new political contract between the Nation and the State.




Human Brilliance, Ingenuity and Skills will always be needed

A brilliantly educational article of Brad Keywell with our compliments shed some light of what awaiting us in the near future.  This is positively a world where Human Brilliance, Ingenuity and Skills will always be needed.

The Fourth Industrial Revolution is about empowering people, not the rise of the machines

14 Jun 2017

The world is changing. There’s no way around this fact.

The Fourth Industrial Revolution is now. And, whether you know it or not, it will affect you.

Billions of people and countless machines are connected to each other. Through ground-breaking technology, unprecedented processing power and speed, and massive storage capacity, data is being collected and harnessed like never before.

Automation, machine learning, mobile computing and artificial intelligence — these are no longer futuristic concepts, they are our reality.

To many people, these changes are scary.

Previous industrial revolutions have shown us that if companies and industries don’t adapt with new technology, they struggle. Worse, they fail.

Mindset shift

But I strongly believe that these innovations will make industry – and the world – stronger and better.

The change brought by the Fourth Industrial Revolution is inevitable, not optional.

And the possible rewards are staggering: heightened standards of living; enhanced safety and security; and greatly increased human capacity.

For people, there must be a shift in mindset.

As difficult as it may be, the future of work looks very different from the past. I believe people with grit, creativity and entrepreneurial spirit will embrace this future, rather than cling to the status quo.

People can be better at their jobs with the technology of today—and the technology that is yet to come—rather than fearing that their human skills will be devalued.

Human and machine

I’m reminded of chess.

We have all heard the stories about computers beating even the greatest grandmasters. But the story is more nuanced; humans and computers play differently and each has strengths and weaknesses.

Computers prefer to retreat, but they can store massive amounts of data and are unbiased in their decision-making.

Humans can be more stubborn, but also can read their opponent’s weaknesses, evaluate complex patterns, and make creative and strategic decisions to win.

Even the creators of artificial chess-playing machines acknowledge that the best chess player is actually a team of both human and machine.

The world will always need human brilliance, human ingenuity and human skills.

Software and technology have the potential to empower people to a far greater degree than in the past—unlocking the latent creativity, perception and imagination of human beings at every level of every organization.

Power of data, power of people

This shift will enable workers on the front line, on the road and in the field to make smarter decisions, solve tougher problems and do their jobs better.

This is our mission at Uptake—to combine the power of data and the power of people, across global industries.

Here’s what this looks like:

Railroad locomotives are powered by massive, highly complex electrical engines that cost millions of dollars.

When one breaks down, the railroad loses thousands more for every hour it’s out of service (not to mention, there are a lot of angry travellers or cargo customers to deal with).

After the locomotive is towed in for repairs, technicians normally start by running diagnostic tests. These can take hours, and often require technicians to stand next to roaring engines jotting down numbers based on the diagnostic readings.

That’s the old way – or, at least, it should be.

Machines, rather than something to be feared, are the tools that will help us solve the world’s biggest problems  Image: Unsplash/Sorasak

New solutions

When locomotives operated by our customers roll into the shop for routine services, all diagnostics have already been run.

Our software has forecast when, why and how the machine is likely to break down using predictive analytics — algorithms that analyze massive amounts of data generated by the 250 sensors on each locomotive.

Our systems have examined that data within the context of similar machines, subject- matter experts, industry norms and even weather. If there’s a problem, we detect it, and direct the locomotive to a repair facility.

A mechanic can then simply pick up an iPad, and learn in a few minutes exactly what is about to break down, as well as the machine’s history and the conditions it’s been operating under.

Virtuous loop

That leaves the mechanics to do what they do best: fix it, using their experience, judgement and skill. And the mechanics decisions and actions become data that feeds back into the software, improving the analytics and predictions for the next problem.

So, technology didn’t replace mechanics; it empowered them do their job.

In the same way that chess masters and computers work best together, the mechanic used human skills that a machine can’t replicate: ingenuity, creativity and experience. And the technology detected a problem that was unknown and unseen to human eyes.

In short, when the mechanic and the technology work together, the work gets done faster, with fewer errors and better results.

Multiply this across all industries: aviation, energy, transportation, smart cities, manufacturing, natural resources, and construction.

The productivity we unleash could be reminiscent of what the world saw at the advent of the first industrial revolution. But the impact of the Fourth Industrial Revolution will run much broader, and deeper, than the first.

We’ll have the knowledge, the talent and the tools to solve some of the world’s biggest problems: hunger, climate change, disease.

Machines will supply us with the insight and the perspective we need to reach those solutions. But they won’t supply the judgement or the ingenuity. People will.


The WEF recommends to read more on the same subject:


Chancellor Angela Merkel in Algiers on 20 and 21 February


Cooperation between the 2 countries ? How ?

German Chancellor Angela Merkel, calling for closer cooperation with the countries of North Africa, intends to obviously achieve, on the occasion of her visit, more of the security situation in the region and by the same consolidate the economic relations between the 2 countries. Chancellor Angela Merkel in Algiers on 20 and 21 February follows on the Algerian Prime Minister’s visit on 12 January 2016 that in addition to the discussed security aspects, it had enrolled as part of the consolidation of economic cooperation between Algeria and Germany notably through the germano-algerian joint commission. This latter was set up in 2010, following the visit of the president of the Algerian Republic, to Berlin.

Germany’s socio-economic

German politics traditionally are normally dominated by two large movements, the CDU – CSU (the Christian democratic union of Ms Merkel and its Bavarian ally, the Christian Social Union) and the SPD (Social Democratic Party). German diplomacy strives to develop a balanced position in its dialogue with the Arab and Muslim world. Present in several States in the region, close political foundations of the major German parties play an important role in this effort of dialogue with all of the local political movements.

Currently, the migration crisis and the situation in the Middle East do concern jointly Turkey (first host country of refugees, with 2.5 million) and Germany, (first host of the European Union). Dialogue around this issue, for which Germany is quite involved, was to find an agreement between the European Union and Turkey, which aims to permanently reduce the number of people seeking asylum in Europe. Based on three central pillars (bilateral trade rooms, Germany Trade and Invest Agency, and economic counsellors of embassies), economic diplomacy conducted by Berlin translates into a strong attention paid to large emerging countries.

Largest economy in the European Union, Germany is a federal State consisting of 16 Länder account about 82 million inhabitants to 01 January 2016 with demographic projections of 72.2 million in 2030 explaining its immigration target with a + 1.4 million migratory balance policy (2015) where the Turks represent in 2015, 9.1 million or 11.1 percent of the total population.

This may put into question its economic dynamism and eventually expose it as a result its open economy to international uncertainties including the protectionist threat of the new American president, the British Exit from the EU and the current fragility of China. Its Gross Domestic Product in 2015 was € 3026.6 billion, with a Per Capita GDP of € 37,107 with an unemployment rate of 5.0% (2015) and 4.5% for 2016, with an annual average inflation rate to 0.1% for 2015.

Meanwhile Germany continues for several years its fiscal policy that is marked by the desire to reduce debt and public deficits, in accordance with objectives set by European treaties. Public debt amounted to € 2150 billion at the end of year 2015 (71.2% of GDP) and 69.2% (2016). The Bundestag has adopted on November 25, 2016 a Federal budget for 2017 and plan for its 2018-2020 program a budget that will be balanced on the whole of the period.

The 2017 federal budget spending is € 329.1 billion, representing an increase of € 12.1 billion compared to 2016.

Tax revenues are planned at € 301.03 billion. According to the multi-annual programming of the Bund, the federal budget should be balanced and should continue to be as such on the whole of the budgetary program of 2018 to 2020 period.

Industry, which represents a significant share of GDP remained almost stable for 20 years (25.7% in 2016 and 23.0% in 1994).  Agriculture represents 0.9%, industry 28.2% and services based on new technologies 72%.

German GDP grew by 4.1% in 2010, from 3.7% in 2011, 0.5% in 2012, 0.5% in 2013, 1.6% in 2014, 1.7% in 2015, and 1.9% in 2016. Highly internationalised companies, exports represent 39% of the GDP in 2015. World Trade Organisation ranked the country in 2015 as the third largest global exporter, behind China and the United States. The density of its fabric of medium and intermediate-sized companies (the “Mittelstand”) innovative and export

Literally champion of the world for exports, Germany has with a trade surplus in current accounts at $ 297 billion for 2016 before China’s $ 245 billion, according to a study by the IFO economic Institute, while in 2015, the balance of payments surplus of China totalled $ 293 billion and that of Germany was $ 257 billion and the United States run a deficit of $ 478 billion.

For 2015, its main customers were: United States (9.5%), France (8.6%), United Kingdom (7.5%), Netherlands (6.6%), China (5.9%), Italy and Austria (4.8%) and suppliers (2015): China (9.7%), Netherlands (9.3%), China (9.7%), Netherlands (9.3%), France (7.1%), United States (6.3%), Italy (5.3%)


What prospects for cooperation?

According to the Secretary of State at Germany’s Ministry of Economy and Energy and co-Chair of the economic joint commission, Germany and Algeria since its independence had good relations of friendship, and I quote him :

“We are aware of the political importance of Algeria in the Arab world and Africa. Algeria is a major and reliable political partner of Europe, for example in the areas of security, regional stability and our common fight against terrorism which are the subject of a close and trusting cooperation between our countries since many years. In addition, Algeria is one of the largest national economies in Africa. It is located at the interface of the Western world, of the Eastern world and the African world, and connects, because of its geographical location, the markets of Europe, Africa and the Arab world.”

Algeria at current prices Gross Domestic Product according to the World Bank was for 2015 at $ 214 billion, with as at January 1st, 2016 a population of 40.4 million inhabitants and an economy that directly and indirectly relies on hydrocarbon exports for 97 / 98% of its foreign exchange earnings.

The volume of bilateral trade between Algeria and Germany recorded in 2014 about € 5.1 billion and no significant change between 2015 and 2016. Germany imported from Algeria for an amount of € 2.5 billion (mainly oil) and exported at a cost of about € 2.6 billion to Algeria. According to Reuters News Agency and the information site “Deutsche Welle”, there was a signing of a major contract of armament between Algeria and Germany (to be confirmed) and exports in armament of Germany destined for Algeria would have reached during the period of January to September 2016 over € 4,029 billion.

In 2015, the bulk of the external trade of Algeria remained focused on its traditional partners such as China with $ 8.22 billion, France $ 5.42, Italy with $ 4.82, Spain with $ 3.93 and Germany $ 3.38 billion. In the first eleven months of 2016, Algerian Customs data show $ 42,78 billion for imports of goods, services not included.

Italy preserved its traditional first customer position of Algeria’s in the first eleven months in 2016, by absorbing $ 4.41 billion of exports, or 17.24% of Algerian overall exports during this period. It was followed by Spain, France and the United States, as well as by Canada that have imported for respective amounts of $ 3.24 billion (12.67%), $ 2.95 billion (11.53%), $ 2.79 billion (10.9%) and $ 1.25 billion (4.91%). Paradoxically Germany does not show in this section of the Algerian exports for these seem not exactly high enough to be classed within it.

In terms of imports, China remains at the top of the supplying countries of Algeria with $ 7.7 billion representing 18.01% of imports overall Algerian between January and November. France with $ 4.37 billion (10.22%), followed by Italy with $ 4.26 billion (9.96%), Spain with $ 3.29 billion (7.71%) and Germany with $ 2.7 billion (6.34%).

So what are these prospects for the Algero-German cooperation? 

Several areas of cooperation have been identified, but the main hurdle would be that most German operators appear not to be attracted by investments in Algeria, for at least as long as the regulatory framework is really not in their favour.  According to numerous statements of many German operators and government agencies, the Algerian rule 51/49 share ownership split, that is applied to foreign investments, with total disregard for either strategic or non-strategic sectors would be the main culprit for all potential German investors including SMIs/SMEs like from many other countries to stay away from Algeria.

However some 4400 family-run companies in Germany form the backbone of the German economy, not to mention an Algerian diaspora evaluated to approximate 30,000 in Germany, are rather “well integrated”. According to German data, about 220 German companies are located in Algeria and employ around 2000 people, operating in different sectors of activity such like energy, services, hydraulics, transport and construction technology and the development of renewable energy in which Germany has a great experience. Algeria import essentially mechanical, electric, steel, equipment vehicles and chemical products and fats from Germany.

Algerian exports are, conversely, made up mainly of hydrocarbons (oil and gas) and derivatives. Despite this minimal trading far below the potential, the ‘shared’ political of the two capitals and their economic and geostrategic interests, remain, despite the world economic and financial crisis, in support of the strengthening of all economic exchanges and bilateral cooperation in all sectors. The main objective is to strengthen the partnership, while studying the economic market of the two countries to seek opportunities of cooperation so as to increase trade and bilateral cooperation especially in the sector of energy (solar, wind, and solar) and technologies.

Algeria, prioritised for next years, despite the existence of several other options, resourcing of renewable energy whilst pursuing at the same time win/win partnership with Germany for an integration and advancement of technological and managerial know-how of Algerians, with the aim to concluding contracts of cooperation with Algerian companies in all sectors including those channels where Algeria has a global comparative advantage to use its international business networks.


In conclusion, Germans that generally have no historical precedent with Algeria, as of their well-reputed pragmatic attitudes and well-known frankness did recently approach the Algerian Government confirming that their readiness to intensify cooperation, was it not for those recent Government measures of Algeria.  These were qualified as being counterproductive, administrative in their outlook whereas what is required should focus as the economic reference of the currency exchange balance as well as the accumulation of organisational and technological knowledge. The Algerian economy predominantly bureaucratic and rentier economy that produces the informal sphere could do with a financial and socio-educational reform, in addition to the lifting of the land system.  And it is up to the Algerians to remove those obstacles for the good implementation of the business, assuming of deep structural reforms, good governance and a visibility and coherence of socio-economic policies of the Government.  It is under these reservations, that any Algero-German cooperation could be and intensify in the context of mutual respect.

Updated on February 22, 2017.

The planned visit to Algiers was put off at the request of the Algerians, the German government spokesman said.

“The Algerian government asked at short notice for it to be postponed, the federal chancellor complied with this wish.”