Agriculture, mining and industry offer clearest path for Algeria's economic diversification
In a bid to diversify its economic revenue sources, Algeria has been attempting to raise domestic and foreign investment in non-energy sectors.
Al-Monitor Pro Members
Francisco Serrano
Journalist and analyst specialized in North Africa
April 18, 2023
In a bid to diversify its economic revenue sources, Algeria has been attempting to raise domestic and foreign investment in non-energy sectors. The increase in non-hydrocarbon exports, which went from $1.7 billion in 2019 to $7 billion in 2022, suggests how other sectors of the economy are improving their performances and finding markets abroad. Authorities have set the target of reaching $10 billion in non-hydrocarbon exports in 2023. While this can be seen as an improvement, non-hydrocarbon exports continue to be dwarfed by the country’s exports of oil and gas, which accounted for $38.6 billion in 2021 and $60 billion in 2022. High energy prices and bigger orders for Algerian hydrocarbons following Russia’s invasion of Ukraine in February 2022 have allowed the North African country to muster vast financial reserves over the past couple of years. But to translate this current increase in revenues emanating from oil and gas into meaningful economic diversification would require addressing three longstanding challenges: easing investment regulations, reducing the role of the state in the economy, and bolstering domestic production.
