Algeria

IV

Economy

Algeria is one of the wealthiest nations of Africa. It has the fifth-largest reserves of natural gas in the world and is one of the world’s major oil producers. Efforts to reform one of the most centrally planned economies in the Arab world began after the 1986 collapse of world oil prices plunged the country into a severe recession. In 1989 the government launched a comprehensive programme supported by the International Monetary Fund (IMF) to achieve economic stabilization and to introduce market mechanisms into the economy.

Despite substantial progress, in 1992 the reform drive stalled as the country became embroiled in political turmoil. In September 1993 a new government resumed the structural adjustment process. The slump in world oil prices, with subsequent heavy foreign debt, led to a one-year standby arrangement with the IMF in 1994. Rescheduling of debts was concluded with a number of creditors in 1995 and 1996. A recovery in growth since then has been helped by expansion in the oil and gas industries and increased diversification in other areas. Unemployment is still high and living standards low.

Agriculture plays a declining but still important role in the Algerian economy, while mineral production accounts for the largest part of the gross domestic product (GDP). The gross national product (GNP) in 2004 was around US$73,316 million (World Bank figure) or US$2,730 per capita. The estimated national budget in 2002 included US$20,120 million in revenue and US$13,776 million in expenditure.

A

Agriculture, Forestry, and Fishing

Rich soils are rare in Algeria. The most fertile lands, located in the Tell region, nearest the coast, are relatively poor in humus and have suffered from overcultivation. The plains have considerable alluvial deposits, but the uplands have poorer soils and can support only grasses suitable for grazing.

Although farming employed 21.1 per cent of the workforce in 2001, it accounts for only about 8.5 per cent of GDP (2005 estimate). Productivity is low and foodstuffs must be imported. The principal crops, with production in tonnes in 2005, are wheat (2.6 million), potatoes (1.80 million), barley (1.3 million), oranges (270,000 in 1994), dates (265,000 in 1994), grapes (275,000), and olives (130,000 in 1994). Of the livestock raised, sheep numbered about 18.9 million in 2005, goats 3.6 million, and cattle 1.6 million.

Forests, which contain much brushwood, covered 1 per cent of Algeria’s land area in 2005. Substantial reforestation projects were undertaken in the 1970s. Harvested wood is used principally for heating and industrial needs. Bark is cut for tanning and cork for commercial purposes. Charcoal is also used for fuel.

Fishing is an important industry; in 2004 the total catch was 140,002 tonnes. The bulk of the yield included sardines, anchovies, sprats, tuna, and shellfish.

B

Mining

The chief mineral products are crude petroleum and natural gas from the Sahara. Crude oil production in 2004 was about 1.6 million barrels per day; natural gas production totalled 82.4 billion cu m (2.91 trillion cu ft) annually. In November 1996 a 1,400-km (868-mi) pipeline began transporting natural gas to Spain.

Other major mineral products are iron ore and pyrites, coal, zinc, lead, mercury, and copper. More than 500 million tonnes of phosphates are thought to exist in hilly regions of Djebel Onk in the north. In 2004, phosphate rock production was estimated at 240,000 tonnes. Virtually all mining and industrial activity is state controlled.

C

Manufacturing

Much of the nation’s industry is centred around the cities of Algiers and Oran. Since the late 1960s the government has instituted major industrialization programmes. Major products are carpets and textiles, chemicals, refined petroleum, plastics, construction materials, olive oil, wine, and processed tobacco. Rapidly growing industries include those producing iron and steel, paper, and electrical items.

D

Currency and Banking

The monetary unit of Algeria is the Algerian dinar of 100 centimes (74.14 dinars equalled US$1; early 2007). All government banking and monetary functions are carried out by the Central Bank of Algeria (Banque d’Algerie). Since 1966 all foreign and private banks have been nationalized.