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Algeria Investment Guides

Creation

Established by the article 8 of the legal fiat no 93-12 of October 5th, 1993 related to the investment fostering, the single wicket gathers all corporations, administrative bodies, and institutions concerned by investing in Algeria through the "Agence de Promotion, de Soutien et de Suivi des lnvestissements"(APSI) (i.e. the Agency for the investments promotion; support and follow up).


Scope of works and services

The single wicket has been set out to ensure an optimal user friendly investment transactions and to be the investors’prefered financial intermediary before the concerned public authorities:

You may carry out the following transactions, in particular:

  • obtain information;
  • to lodge and register the investment statement;
  • to lodge and register the "profits award demand" related to your project;
  • to acknowledge the "profits award decision" notice;
  • originate the appropriate administrative pipelines of projects and investments
  • to be provided with advisory services, guidance and attendance covering every and all investment project aspects.

Industrial Restructuring and Privatisation Process

The restructuring of the industry is one of the priorities in the government action (principally public); the Algerian industry knows a deep reforms since 1988 beginning by the EPE (Economic Public Enterprise) which though its important weight in the public industry 70% of the production, 76.7% of the national industrial employment and 400,000 workers, seems to be financially destructed, highly dependent of foreign markets for its supplies in raw materials and half products and therefore suffer from first, the weakness in the use of their established capacity, the deficit in the organisation and management and last but not least a weak competitivity in external markets.

While the actual restructuring marks deep changes, it aims to realize three essential objectives the improvement of the performance of the EPE; the development of non-hydrocarbon products the introduction in the world market and the adaptation to the structural and organisational changes of the world industry. To this effect, the institutional framework of the EPE was modified by the promulgation of two more important legislative texts the law of August the 26th 1995 relating to the privatisation and the law of October the 6th 1995 relating to the management of the trade equity; this last one gives the management of the EPE’s capital to eleven holdings replacing by this means the participation funds which managed the portfolio of public enterprises during the last seven years. The holding constitute then a privileged mean for the State to promote strategy of management in conformity with the targets of growth industrialisation and privatisation. The grouping of the public enterprises in a holding will therefore make more easier the economical and industrial redeployment into the public sector and will develop a comparative advantages in foreign markets concentrating on the basic crafts and a competitive valorization of the national resources.

Being part of the industrial restructuring, the process of privatisation is henceforth included in the program of the government comformably to the law of privatization, the opening to the private must concern in first step the competing sectors touring, hotels, transport, services, housing and public works, agro-industries and finally process industries in mechanics, electric and electronic fields. Besides the case of privatisation of the management, the operations of cession of capital may be realized in financial market (stocks and bonds) or by biding and mutual agreement contract and for this reason a National Council of Privatisation was put in place, having for mission the execution of the privatization’s program, the evaluation of the situation and the assets of public enterprises, study and selection of offers.

At the end of 1996, nearly 110 privatization operations were implemented in which 88 ones were privatised by cession of assets and in order to accelerate this process, the government steps to introduce new facilities to the law of privatisation by the introduction of the possibility of the installment sale and, in addition the resort to the privatisation methods by the sale of the privatisation bills to all the population.

Support for the Investors

Instituted by the Investments Code, the "Agence de promotion, de soutien et de suivi des investisements" (APSI) has all necessary authorities to assist and attend promoters of investments in their different steps in the realization of their projects. It has to this end a unique wicket instituted to ensure an optimal fluidity to operations of investment and to be the preferential investor speaker.

The single wicket is composed of different offices, representing organisms and institutions concerned by the investment APSI, taxes, Bank of Algeria, National Center of the Register of Trade, customs, administration of areas, commune, environment, job.

By means of the single wicket, the Agency is held to notify in a maximum period of 60 days the concession or refusal decision of advantages asked by investors as well as to deliver all documents legally required for the realization of the investment.

Fiscal advantages consent in the framework of the promotion of the investment are modulated according to the nature of the regime to which is fastened the investment: General Arrangement Scheme or Specific Areas Scheme (expansion zone and developing area).

Investment Environment

"Prudent investors are those that know how to look into events and economic trends."This message, is reiterated such a leitmotiv to all promoters concerned by the opportunities offered by the Algerian market. Well beyond cyclical declines, we have no choice but to admit that today's Algeria answers all requirements to win over the investors.

The batch of economic reforms has hence reached its cruising speed, thanks to the severe financial policy set out with the contribution of international banking institutions, that allowed budget shortage curtailment, and a sensible inflation slackening, as well as, important trade surpluses build-up and exchange reserves recovery.

Besides, Algerian economy overtures will is a noticeable fact through the promulgation of a new investments code, which dedicates solemnly free practises of trade and industry, and sets out the institutions and gardefous that will enable Algeria to recover its final steadyness. After the presidential elections of 16th November 1996, the year 1997 will see the subsequent organization of legislative elections and the local government committee.

These reforms committed at the institutional level will allow Algeria to stand in a privileged contending position at the regional level, with respect to foreign investment inflows. With its important energetic resources, its human potential, its reserves of productivity in the agriculture, its touristic wealth still unlapped, an industrial and facility web of its own in the Maghreb area, Algeria is, at the end of this century, a market of 30 millions of residents, that offers an interesting and large scale of investment prospects. Aiming at establishing Euro-Maghrebian free-trade area, Algeria is set on securing a leading position that will keep it abreast with its possibilities and assets. In a strong confidence because of these guarantees, the "Agence de promotion, de soutien et de suivi des investissements * (APSl)", for its part, will spare no effort to assist and lead the investments’ promoters in their steps for the realization of their projects.

Political and Structural Adjustment

The need to a-dynamic entry within the world economy has led the public authorities to commit a sizeable and global economic reform program, in 1988.

Applied within an economy-intensive public sector and State-managed economy, these reforms aim, on the one hand, to rehabilitate the enterprise as an economic factor totally autonomous vis-a-vis of the State and, on the other hand, to put in place the legislative device to allow the State to play a regulatory public power role in the economy.

The State is engaged to put in place the necessary legislative framework for preparing the transition to the market economy.

Several legal texts have been promulgated or amended to this effect:

  • monetary and loan-credit law;
  • the trade code
  • legal-fiat for the creation of stocks and bonds;
  • the investments code
  • ordinance related to the management of State’s trading capitals
  • ordinance related to the public enterprises privatization.

These reforms have been committed at a moment where the Algerian economy, gravely affected by the fall of export receipts of hydrocarbons, entered a phase of instability characterized by a strong recession, increasing inflation and a scarcity of financial resources.

The external balances attrition at the end of 1993, the debt servicing reaching 80% of export revenues has pushed to negotiate the rescheduling of the public debt and to sign with the International Monetary Fund (IMF) successively a stand-by agreement of stabilization (April 1994-March 1995) followed by a financial facility agreement covering three years (April 1995 - March 1998). Negotiations leaded in the course of years I 994 and 1995, with the Club of Paris and the Club of London, have allowed the rescheduling of fifteen billion dollars.

The structural adjustment policy implemented since 1994 has allowed to record notable progress in the restoration of macro-financial balance. The stock debt has reached, in 1996, 30.5 billion dollars, while the debt servicing has been reduced to 32% of exports revenues (48.7 % in 1994, 43% in 1995).

The inflation rate has been reduced in 1996, to 18.7% (29.8% in 1995, and 29% in 1994) and estimates for 1997 count for a rate under 10%. Reserves of changes registered a substantial improvement. Under the policy of adjustment, and the increase of the oil price and a good agricultural season for 1996. The reserves culminated to 4 billion dollars in December 1996. The budgetary deficit was brought from 6 % of the Gross Domestic Product (GDP) in 1994 to 2.1 % in 1996.

The negative growth in 1994 (- 1%) has known a real growth 4% in 1996. Devoting the dismantling of monopolies, the liberalization of the foreign trade is total since January 1995 (no more product is suspended to import). The commercial convertibility of the dinar allows henceforth-private operators to invest largely in the import/export field.

The hydrocarbon position (93%) stays predominant in the sector of exports, but exports out-hydrocarbon (agricultural products, iron...) records a net growth going from 275 millions of dollars in 1994 to 860 millions in 1996.

Last Updated on Monday 14th December 2009

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