Diversifying Algeria’s exports challenges and prospects relating to the African market

Abstract

The purpose of the present study is to analyze the diversification of Algerian exports, and its export growth to sub-Saharan Africa. Algeria aspires to increase its trade with the rest of the African continent significantly, from what is admittedly a very low base. In 2014, Africa accounted for only 0.2 per cent of Algeria’s total exports, and 0.8 per cent of its imports. With its total exports excluding hydrocarbons (but including their derivatives) currently at less than $800 million, Algeria has considerable scope to improve those figures. The first section of the present report provides an overview of the country’s macroeconomic performance, while the second section looks at Algeria’s external trade, its regulatory framework, and public policies to promote exports. A third section examines the reasons why the country has failed to diversify its exports and explores a number of theories that were tested in a survey of business leaders in Algeria. The conclusion of the report sets forth public policy recommendations that could accelerate export diversification and increase trade with the African continent the obvious place for Algeria to enhance its economic footprint.