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Algeria: A “Start-Up Nation” with Global Aspirations

22 January 2024 Comments (0) Politics

Algeria, traditionally known for its rich history and vast natural resources, is increasingly being recognized as a burgeoning “start-up nation.” This North African country, with a young and tech-savvy population, is making strides towards establishing itself as a hub for innovation and entrepreneurship, aiming to leave a significant footprint on the global digital economy.

The Current Landscape

Algeria’s start-up ecosystem is still in its nascent stages, yet it shows immense promise. The government, realizing the potential of digital transformation, has been instrumental in fostering a conducive environment for start-ups. Initiatives like the National Startup Fund, established to finance innovative projects, and the implementation of the “Start-up Act,” which provides legal and financial support to young entrepreneurs, are pivotal in this journey.

The country’s youthful demographic is a key asset. With over 70% of the population under the age of 30, Algeria boasts a large, dynamic workforce eager to embrace new technologies and innovation. This demographic dividend, combined with increasing internet penetration and mobile usage, sets the stage for a thriving digital economy.

Innovative Projects and Sectors

Algerian start-ups are making waves across various sectors. In tech, there are burgeoning developments in AI, fintech, e-commerce, and renewable energy technologies. Notable examples include TemTem, a successful ride-hailing app, and Djazair Ta3mal, an online platform helping Algerians enhance their employability.

The agricultural sector, integral to the Algerian economy, is also seeing a digital overhaul. Start-ups are leveraging technology to improve agricultural productivity and sustainability, addressing challenges such as water scarcity and food security.

The Future Outlook

The future looks bright for Algeria’s “start-up nation” vision. The government’s increasing focus on digitization and economic diversification, away from oil dependency, signals a commitment to nurturing the start-up ecosystem. Moreover, the growing interest from international investors and venture capitalists in African tech start-ups could bode well for Algeria.

Advantages and Opportunities

Algeria’s strategic location as a gateway between Africa and Europe, combined with its large, young, and increasingly well-educated workforce, presents significant advantages. The country’s rich cultural heritage and diverse landscapes also offer untapped potential in sectors like tourism and cultural industries.

Furthermore, the government’s push towards enhancing digital infrastructure and the gradual shift in societal attitudes towards entrepreneurship are creating a fertile ground for innovation and business growth.

Challenges and Problems

However, the journey is not without its challenges. Bureaucracy, regulatory hurdles, and limited access to funding remain significant obstacles for many start-ups. Additionally, while the government has shown support, more consistent policies and effective implementation are needed to sustain long-term growth.

The education system, though improving, still needs to align more closely with the evolving demands of the digital economy. Bridging the skills gap and fostering a culture of innovation and critical thinking is crucial for the sustainable development of the start-up ecosystem.

Not Just a Dream but an Evolving Reality

Algeria’s aspirations to become a “start-up nation” reflect a bold and forward-thinking approach to economic development. While there are challenges to overcome, the country’s advantages, such as its young population, strategic location, and evolving digital landscape, provide a strong foundation for growth. With continued government support, international collaboration, and an emphasis on education and skills development, Algeria is well-positioned to realize its aspirations on the global stage. The nation’s journey towards becoming a hub of innovation and entrepreneurship is not just a dream but an evolving reality, paving the way for a vibrant and diversified economy.

Photos : israelvalley.com / jeuneafrique.com

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Algerian president fires central bank governor

1 June 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

ALGIERS (Reuters) – President Abdelaziz Bouteflika on Tuesday fired Algeria’s central bank chief, who had been under pressure from ruling party critics over his management of fall-out from the global oil price drop, two government sources said.

No official declaration had been made so far about the dismissal of Mohammed Laksaci, who had been the central bank governor for more than a decade. Bouteflika had held a cabinet meeting early on Tuesday, according to state news media.

 

(Reporting by Lamine Chikhi; Writing by Patrick Markey; Editing by Mark Heinrich)

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Algeria GDP growth at 3.9% in 2015

25 April 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

ALGIERS (Reuters) – Algeria’s economy grew by 3.9 percent in 2015, up from 3.8 percent the previous year, boosted by higher output in agricultural sector, the government said.

Last year’s growth was slightly higher than the 3.8 percent government forecast and the 3.7 percent International Monetary Fund (IMF) expectations.

Algeria relies heavily on oil and gas, which make up 60 percent of the state budget and 95 percent of total exports.

After the fall in crude oil prices, which has significantly hit its finances, Algeria has been trying to diversify the economy through incentives to develop the non-petroleum sector but those efforts are still in their infancy.

Hydrocarbon sector grew 0.4 percent last year after a 0.6 percent decline in 2014, according to the National Statistics Office data released on Sunday.

Growth in the non-oil sector stood at 5.5 percent in 2015 slightly lower than the 5.6 percent the previous year.

But agriculture output grew 7.6 percent, up from 2.5 percent in 2014, the figures showed. Algeria’s grain output in 2015 reached 4 million tonnes, a 14.3 rise from 20114.

 

(Reporting by Hamid Ould Ahmed Editing by Jeremy Gaunt)

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Algeria seeks to boost its tiny stock market

7 April 2016 Comments (0) Business, Featured, Middle East

Challenges include lack of knowledge of stock investment in the domestic market, lack of liquidity in investments and competition from more traditional investments.

Algerian officials are looking for ways to boost investment in the country’s stock exchange, which is one of the world’s smallest.

The relatively young exchange, based in Algiers, lists only four companies and has a capitalization of less than $140 million.

Officials hope to increase the capitalization to $1 billion in 2016 by listing additional companies.

The stock exchange faces several challenges, including lack of knowledge of stock investment in the domestic market, lack of liquidity of investments and competition from more traditional investments.

Biopharm offering attracts little interest

A recent initial public offering by the Algerian pharmaceutical company Biopharm had a lackluster start, raising only $6 million in its first week, far less than the $5.5 billion, or 20 percent shares in the company, on offer.

According to experts, Biopharm has clear advantages as an investment. It operates in the health sector, which is expected to grow as the population ages. It has a solid record of financial results, including net revenue of $32 million in the first three quarters of 2015 and promises a return of 14 percent.

Stock market is seen as a novelty

Investing in the stock market is a relative novelty in Algeria, which only established the exchange in 1999. Instead consumers favor more traditional investments, such as real estate, which are seen as more stable and safe. Another popular investment is to convert Algerian dinars to Euros, which in recent years has yielded higher returns than the Algiers-based stock market.

Another problem is the lack of liquidity of stock investments. Given low consumer interest in the exchange, it can be difficult for those who want to sell to quickly find stock buyers.

The stagnant Algerian exchange contrasts with the largest stock exchange in the region, in Saudi Arabia, which is also the largest economy in the region.

Saudi market capitalization is $570 billion

The Saudi market capitalization is $570 billion, or about one percent of the world stock market and larger than the main market in Russia. The exchange is highly liquid, with a daily trading volume of $2.5 billion, making up 65 percent of the trading in the entire region.

Saudi stock exchange

Saudi stock exchange

The Saudi exchange, which has issued several initial public offerings, opened to foreign investment in 2015. The exchange is primarily geared to larger foreign investors in order to promote stability.

Other large exchanges in the region are in the United Arab Emirates, with a market capitalization of $245 billion, and in Qatar, where the stock market is capitalized at about $200 billion.

Algeria’s neighbors also have active stock exchanges. Morocco’s exchange is capitalized at approximately $48.8 billion with 77 companies listed. Tunisia’s exchange has a market capitalization of $9.2 billion with more than 70 listings.

Algerian government seeks to boost exchange

Some have said the Algerian government should be doing more to promote that nation’s stock exchange.

Algerian Finance Minister Abderrahmane Benkhelfa recently met with representatives of the stock exchange, bank managers and other key players to explore ways to “boost the stock market.”

Benkhelfa stressed “the need for synergy and dialogue among the organizations to give more credibility to the financial market.”

The minister said the stock exchange needed to be modernized with improvements in company transparency, including regular publication of their financial statements, and efforts to improve competitiveness. He appealed to Algerian companies to join the market to fuel their growth.

He said the upcoming listings of Biopharm in April and of Aïn Kbira of Sétif, a cement company, in May, would help boost the market’s value significantly.

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Algerian telecom Djezzy sees path forward

5 April 2016 Comments (0) Business, Featured, Middle East

Djezzy

A tax dispute behind it, Djezzy receives approval to expand its 3G network in the fast-growing mobile market.

Djezzy, a long-troubled Algerian telecom, says it is on a path to growth after receiving approval to upgrade its network to 3G nationwide.

The upgrade could put Djezzy on a par with rival companies Mobilis, which offers 3G coverage in all 48 of Algeria’s provinces, and Ooredoo, which offers 3G in 36 provinces.

Djezzy currently has more than 18 million subscribers, almost half the market, but it offers 3G coverage in only 30 provinces. The company, in which the Algerian government has a 51 percent stake, said it would extend service to the remaining provinces this year.

Tax dispute slows Djezzy growth

Algeria’s mobile market is booming. However, Djezzy’s growth has been slowed by a lengthy dispute over back taxes that culminated in the Algerian government’s purchase of a majority share in the company in 2014.

VimpelCom, owned by Telenor ASA of Norway and Russian billionaire Mikhail Fridman, retained the remaining 49 percent of the Djezzy, and continued to operate Djezzy through their Optimum Telecom Algeria.

VimpelCom recently reaffirmed its commitment to the Algerian market.

Company will expand 3G nationwide in 2016

Vincenzo Nesci, executive chairman of Optimum Telecom Algeria, said in March that the company had received government authorization to deploy 3G services in all provinces of the country and would implement the expansion during the during the ‘first months’ of 2016.

The expansion follows a long period of crisis for the company.

The Algerian government barred Djezzy from importing SIM cards and other equipment starting in 2010 and the Algerian central bank blocked overseas transfers of funds – including paying dividends to the parent company – in a dispute over taxes Algeria said the company owed.

The government said Djezzy, at the time the country’s largest operator with 14 million subscribers, owed $600 million in back taxes.

Government buys share of company

Algerian regulatory hurdles also derailed a proposed sale of Djezzy to MTN, a telecom based in South Africa, for $7.8 billion.

Instead, the Algerian government bought a majority stake in Djezzy in 2014, in a deal that provided the parent company with $4 billion in cash and dividends after paying a fine of $1.3 billion to settle the Algerian tax claims.

Djezzy faces competition from two other major mobile network operators, Mobilis and Ooredoo, seeking to serve Algeria, which has a population of about 40 million.

Djezzy leads market, lags in 3G

According to an August 2015 report by Algeria’s Post and Telecommunications Authority, Djezzy leads in the total number of subscribers with 18.6 million, nearly half of the market. Mobilis has 13 million subscribers and Ooredoo has 11.7 million.

However, Mobilis leads in 3G subscribers, with 3.8 million, followed by Ooredoo with 3.4 million. Djezzy brings up the rear in 3G with only 1.25 million subscribers.

The regulatory agency said the market grew by 22.7 percent in 2014, compared to 2013. The total market generated revenues of about $3 billion in 2014, 8 percent higher than in 2013.

One study found that Algeria was one of the fastest growing mobile markets in the region along with the United Arab Emirates and Saudi Arabia, while the market was stagnant in Egypt, Kuwait and Israel.

Mobile revenue in the Middle East and North Africa was expected to grow from a total of $50.4 billion in 2013 to $59.1 billion in 2018. As more people consume information on their mobile devices, the study said primarily spending on handset data would drive growth.

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Algeria’s Sonatrach awards $100 mil pipe deal to foreign firms

23 March 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

ALGIERS (Reuters) – Algeria’s state energy firm Sonatrach has awarded a $100 million contract to supply oil and gas drilling tubes to five foreign firms as part of its drive to increase production, a document seen by Reuters on Tuesday showed.

The companies named in the Sonatrach document are Germany’s CCC Machinery, Dutch firm Van Leeuwen, Vallourec Tubes France, Kurvers Piping France, and High Sealed&Coupled from China.

OPEC member Algeria, which has been hurt by a 70 percent fall in oil prices since mid-2014, is campaigning for more foreign investment to increase oil and gas production to sustain exports and meet growing local demand.

But recent bidding rounds have failed to attract much interest from foreign oil producers.

Sonatrach also said on Tuesday it had made a new oil find with Thailand’s PTTEP and China’s CNOOC following successful drilling in the Hassi Bir Rekaiz area in Algeria.

“This represents 20,000 barrels per day,” a Sonatrach source told Reuters.

Sonatrach holds a 51 percent stake in the project, with the other two companies owning 24.5 percent each.

The state energy company is focusing on developing areas around existing fields and hiking production at its mature fields. It will also invest $3.2 billion over four years to increase pipeline capacity as natural gas output rises from new and existing fields.

 

(By Lamine Chikhi. Editing by Patrick Markey and Susan Thomas)

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Algeria’s Sonatrach to invest $3.2 bil in pipelines

8 March 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

SIDI REZINE, Algeria (Reuters) – Algerian energy company Sonatrach will invest $3.2 billion over four years to increase pipeline capacity as natural gas output rises from new and existing fields, a top company official said on Tuesday.

OPEC member Algeria has been hurt by a 70-percent fall in oil prices since mid-2014. Its revenue from energy fell by half last year, forcing the government trim spending and freeze some infrastructure projects.

But the government, despite struggling to attract foreign oil companies in recent energy bidding rounds, is determined to increase oil and gas production to keep up exports and meet growing local demand.

“Sonatrach will invest $3.2 billion from 2016 to 2020 to boost its transport capacity, including $530 million in 2016,” Arbi Bey Slimane, Sonatrach’s vice president for pipeline transportation, told Reuters at the company’s Sidi Rezine office east of Algiers.

He said the company wanted to guarantee increased supplies to European clients. The additional transport capacity aims to deliver more volume as new fields in southeast and southwest add production soon. He did not give specifics on amounts or timing.

Algeria produces 1.1 million barrels per day of oil, and 27.44 billion cubic metres of gas, according to official figures.

Sonatrach’s CEO Amin Mazouzi has pledged a “sizeable increase in production” in 2016 as Algeria looks to end more than a decade of stagnation in energy production.

“We will build 1,650 km of pipeline, and six compression and pumping stations by 2020. Our goal is to transport output from new fields located in the south east and south west,” Slimane said.

Algeria is in talks with the European Union as the EU looks to diversify its energy sourcing away from Russia, which supplies around 30 percent of the EU’s gas.

Slimane said Algeria would remain a stable gas supplier for southern Europe.

“The volume exported in 2015 increased by 2 million tonnes equivalent oil (TEP) to reach 99 million TEP. The 2 million were delivered to southern Europe,” he said.

 

(By Lamine Chikhi. Editing by Patrick Markey and Jason Neely)

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