A “new business pact” is one of the conclusions of the annual Forum of the French Council of Investors in Africa held last week (July 1, 2021) in Paris, face-to-face and virtual.
A new pact to promote economic recovery after the Covid-19 pandemic. All over the world, countries have had to adapt, sometimes by groping, to the health crisis in order to limit its impact on the economy.
Among the many political and economic personalities at the CIAN Forum on “the contribution of companies to economic recovery”, there was an Algerian delegation representing the business world. “We are here to affirm that Algeria has returned, with its geostrategic position,” affirms Reda Tir, the president of the Economic, Social, and Environmental Council. It is the gateway to Africa, it is close to Europe. Algeria has enormous natural resources that must be exploited and we are open to partnership with Europeans and any business.
Algeria is in the process of doing a general overhaul of its financial system and its tax system. Developments that investors are following closely. A country more aware than ever of its dependence on hydrocarbons, explains Reda Tir.
“No more oil revenues for us. Now there is a real policy of economic diversification, through the abolition of the 51/49 rule which concerned foreign shareholding in Algeria [Editor’s note: previously, no foreign investor (or group of investors) had the right to own more than 49% of the shares of a company]. Now there are niches that are completely open to foreigners, such as agriculture, tourism, and other sectors, he lists. Apart from the three strategic sectors of mining and energy, the pharmaceutical industry, and transport in a few segments, everything is open to any foreign investor, to be able to create value in Algeria.”
Energy, a strategic area
A spectacular change in the law on investment, with foreign groups being able to fully own the shares of their subsidiaries in Algeria in certain sectors. One of the three strategic areas not open to foreign investors is energy. But as the country is one of the most electrified in Africa, Sonelgaz, the Algerian Company for the production, transport, and distribution of electricity and gas by pipeline, shares its experience with other countries on the continent.
“Algeria, through Sonelgaz, is already working with many African countries. Our country is 98% electrified, we have gas which penetrates 65% by pipeline, as well as methane and butane gas for the rest. We are among the rare countries, not only in Africa but in the world, which have and which give both energies simultaneously to citizens. We are therefore on an energy model of comfort, explains Chaher Boulakhras, CEO of Sonelgaz. Now, if I have an approach to give in all humility, I would say that we need the most optimal energy model: acting on both consumption and production, avoiding waste by working on the aspects of losses, work on aspects of well-developed tariffs, incentives, and the production model and work on diversified sources.”
Even if the country is not at the forefront in Africa in terms of the use of solar energy, Algeria has developed mini-grids with other energy sources, notably gas, to supply all of its isolated localities in the desert.
