Algeria, the leading market in North Africa
Located at the point of convergence of three worlds: Mediterranean, Arabic and African, Algeria holds a strategic geographical position. Today it is the third largest economy in the Middle East and North Africa (MENA) zone. The main cities, agricultural land and industrial activity is concentrated in the North. To the South, the Sahara Desert is a region that abounds with natural resources and hydrocarbons. Algeria is undeniably a land of opportunity.
- 42.4 million inhabitants (2019)
- $4,024 GDP/capita (constant USD, 2019)
- GDP growth: 2.1% in 2018 (excluding hydrocarbons)
- Literacy rate: 90.5%
- 70% urban population
- Official languages: Arabic and Tamazight. French is spoken by 11 million people and is used everywhere in the business world
- Algerian dinar: €1 = 134.1 AD (May 2019)
- 9.2% budget deficit
- Public debt: 31.3% of GDP
- Inflation: 6.5%
- Unemployment rate: 11.7%
Source: Algeria fact sheet, Business France
Main partner of Algeria: European Union
The EU accounts for 49.2% of Algerian imports and 68.3 percent of Algerian exports. In 2017, an Algerian-European cooperation programme was launched, entitled Pilot Actions Programme for Agriculture and Rural Development in Algeria (PAP-ENPARD-Algeria). Worth €20 million and funded in equal proportions by Algeria and the European Union, the programme aims to support the strategy to diversify the Algerian economy and revitalise rural territories through productive activities with the aim of increasing revenue and employment.
And yet the leading supplier to Algeria is China (16%), ahead of France (10.5%), Italy (9.4%), Spain (7.6%), Germany (6.6%), the USA (5.3%), Turkey (4%), Argentina (2.5%), the Republic of Korea (2.3%), and Brazil (2.2%).
A growing agri-food industry
- 2nd biggest industry in the country
- 140,000 employees, 17,000 industrial companies, including 95% managed by the private sector
- Leading African buyer of foodstuffs
- 75% of its requirements are provided for by imports
- A strong desire for agricultural and rural development: 20 billion USD*
- Launch of National Agri-Food Industry Development Plan: increase of proportion of food industry in GDP (excluding hydrocarbons) from 50% to 60%
- Creation of four technology hubs of 500 agri-food industry firms
* Source: 2015-2019 five-year plan.
Food accounts for an average of 42% of Algerian household spending, and mainly concerns relatively unprocessed basic products. Indeed, the government maintains the prices of staples such as sugar, seed oil, bread, semolina and bagged pasteurised milk at a low level by “administrating” their prices. This means that their consumption remains high. However, it should also be noted that the middle class is beginning to emerge, with higher demands relating to the quality, availability and practicality of products that it consumes. Meanwhile another even wealthier class is in search of more refined products with Algerian and Muslim characteristics.
The Algerian food sector could also develop much more quickly if modern distribution was itself sufficiently developed. While large and medium-sized firms are modernising, many small firms do not master processes, traceability, filling and packing, international standards or banking and tax procedures. Food industry firms must sometimes manage their own distribution networks themselves. They provide assistance to their wholesalers to enable them to acquire their equipment. For example, the cold chain is not secure in all sectors, and some ice cream firms provide their wholesalers with freezers.
Algeria’s leading goal today is to develop local production to increase its self-sufficiency in fast-moving consumer goods. Subsequently, and when this production complies with international standards, Algerian firms will be able to begin to export. Today there is demand in Europe for certain typically Algerian products, offering new opportunities to large Algerian groups which are ready to export.
For more than 15 years, DJAZAGRO has been working for the benefit of Algerian food industry firms to enable them to find foreign suppliers of machinery and inputs who are ready and willing to support them in their growth.