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Algeria Country Analysis

 

Algeria is the largest continental country in the African continent, located in North Africa. Algeria is bordered by Tunisia in the northeast, Libya in the east, Niger in the southeast, Mauritania and Mali in the southwest, Morocco and Western Sahara in the west. The Mediterranean climate is dominant in the northern part of the country and the desert climate in the south. Algeria is one of the richest countries on the African continent. The Algerian Dinar is the currency of Algeria. Although the official language is Arabic in Algeria, there is also a small group of French-speaking people because of the few French left during the colonial period.

Algeria is an important natural gas and oil producer and exporter. There are iron deposits in the southwest of the country and uranium and zinc deposits in the southern end. Oil and natural gas, released by Sonatrach, a public company, is the country's primary source of income. Algeria has attempted to stimulate its economy through agricultural reform and the modernization of heavy industry, but oil and natural gas products still account for almost all exports.

Mediterranean climate plants such as olives grow in areas suitable for agriculture in the area close to the sea. Algeria ranks 1st in the world in broad bean agriculture, 5th in fig, 6th in date, 9th in apricot, and 10th in almond. However, it cannot export most of the agricultural products.

Algeria is the 4th largest economy in the African Continent (after South Africa, Nigeria, and Egypt). In Algeria, which has been in a gradual transition to a free market economy since the beginning of the 2000s, the problems of this process are still being felt, as in other similar countries. Despite its rich natural resources, the low purchasing power of the people compared to the neighboring countries,  the inadequacy of national and international investments for the diversification and development of the country's economy on a sectoral basis, the slow progress of the privatization efforts of the state economic enterprises in the country, the size of the unrecorded sector, serious economic and social imbalances among the regions (especially between the north and the south) and the youth unemployment which is 30%, constitutes the main part of these problems.

Algeria, which has started to liberalize its trade policies since the mid-1990s, can show significant import substitution and protectionist tendencies despite those problems stated above. Despite import lobbies, which are effective in determining the trade policy in the country, the sensitivities towards the establishment of a national industry are effective in such attitudes. On the other hand, with the Free Trade Agreement signed in 2002 with the European Union and entered into force in 2005, reduced customs duties are imposed on products originating from European Union countries for the import of many industrial products and these taxes have already been reset in some product groups. Although it is not very comprehensive, a mutual quota system is applied in the agriculture and fisheries sector.

 

Algeria’s Foreign Trade

Foreign Trade Figures (Million USD)
 

Years

Export

Import

Volume

Balance

2007

60.163

27.631

99.638

20.688

2008

79.298

39.475

118.556

40.039

2009

45.193

39.258

86.194

4.194

2010

57.050

40.999

104.271

9.831

2011

73.436

47.219

120.920

25.952

2012

71.865

50.369

71.866

24.382

2013

65.998

54.909

120.907

11.089

2014

60.388

58.618

119.006

1.770

2015

34.796

51.803

86.599

-17.007

2016

29.992

47.090

77.082

-17.098

2017

 35.191

 46.053

 81.244

-10.862

2018

 41 608

 47 342

 88 950

- 5 734

Source: ITC_Trademap

The export of hydrocarbons sector accounts for about 95% of total exports. However, it is observed that exports have decreased due to the fall in oil prices in recent years.
 
Due to the inadequacy of agricultural production on the one hand and the industrial infrastructure on the other, Algeria, which has to buy many consumption products from abroad, is importing in increasing amounts over the years to meet its needs. The European Union is the most important trade partner of Algeria.  

 

Turkey-Algeria Free Trade Agreement

With the Free Trade Agreement signed with the European Union in 2002 and entered into force in 2005, reduced customs duties are imposed on products originating from EU countries for the import of many industrial products by Algeria, and these taxes have already been reset in some product groups. Customs tariff reductions within the scope of the Greater Arab Free Trade Zone (GAFTA) were launched in 2009, within the broad exemption lists.
It is seen that the aforesaid FTAs are making the entrance of the products that originate from Turkey difficult to enter the market, and many Algerian companies engaged in imports from Turkey are turning towards Europe (France, Spain, Italy and especially in Germany) and The League of Arab States, (Mainly in Tunisia, Morocco, and Egypt).

Turkey-Algeria Foreign Trade Figures (Million USD)
 

Years

Export

Import

Volume

Balance

2001

422

1 064

1 486

-642

2002

514

558

1 072

-44

2003

573

501

1 074

72

2004

806

626

1 432

180

2005

807

862

1 669

-55

2006

1 021

719

1 739

302

2007

1 232

944

2 176

288

2008

1 614

1 588

3 201

26

2009

1 777

769

2 546

1 008

2010

1 505

1 068

2 573

436

2011

1 471

1 150

2 621

320

2012

1 813

925

2 737

889

2013

2 003

714

2 717

1 289

2014

2 083

921

3 004

1 162

2015

1 826

741

2 566

1 085

2016

1 736

 463

2 200

1 272

2017

1 712

 766

2 479

 946

2018

2 031

1 137

3 169

 893

Source: TUIK

 

In the trade between Turkey and Algeria, the foreign trade balance which was in favor of Algeria before 2005 has started to have a surplus in favor of Turkey since 2006 with the steady increase of the export towards Algeria each year. The foreign trade balance in favor of Turkey reached 893 million USD in 2018.


Turkey’s Export to Algeria

The export from Turkey to Algeria, which was 1.7 billion USD dollars in 2017, surpassed 2 billion USD in 2018.
 
On the other hand, it is estimated that approximately 100-150 million USD worth of export is realized annually through the shuttle trade, which is evaluated within the scope of the unrecorded economy.
 
In addition to this, it is estimated that the goods originating from Turkey came to Algeria through the ports of Spain, France, and Italy, or through transit from the member countries of the Maghreb Arab Union, and the annual total of this trade has reached approximately 300-350 million USD.
 
Main exported products are; parts and equipment for road vehicles, construction equipment, diesel engines, cables, refrigerators, mineral processing machines, plastic rods and profiles, ready-to-wear, iron and steel profiles, fabric, food processing machines, agricultural processing machines, electrical panels and iron and steel stoves. 

 

Source: Ticaret Bakanlığı (www.ticaret.gov.tr), Vikipedia,

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