A general election in 2023 has encouraged the Algerian government to push through reforms against the tide of rising inflation and cost of living crisis. Public revenues are stretched following the COVID-19 pandemic and low hydrocarbon prices. While the domestic market has been slow to recover, exports are bolstering producer revenues.
Algeria’s businesses are set to benefit from diversification policies that were introduced by the government in October 2022. Seeking to reduce dependency on oil and gas revenues, new investment codes with cash incentives for non-oil exporters have been put in place. The government’s diversification programme aims to protect public revenues in the face of a contraction in hydrocarbon revenues, such as the 25 per cent shortfall in 2020 reported by the Africa Housing Finance Yearbook 2021. As a result of reduced hydrocarbon revenues, the fiscal budget saw an overall deficit of 16.5 per cent of GDP in 2020, compared to 9.6 per cent of GDP in 2019, according to the World Bank.
