Hyper-dependent on oil revenue, which provides the bulk of its revenues, Algeria is facing a serious risk of economic slump. This has led the president Abdelmadjid Tebboune to proceed Tuesday evening at a cabinet reshuffle, part of which aims to finance and energy, two key sectors. Most of the regalia ministries, foreign Affairs, Interior and Justice, retain their holders, with the exception of the strategic portfolios of Energy and Finance.
Attar to Energy, Ben Abderrahmane Finance
The first returns to Abdelmadjid Attar, former CEO of the oil giant owned algerian Sonatrach (1997-2000), which replaces Mohamed Arkab, propelled to the head of the ministry of Mines, says a terse statement from the official news agency APS posted late Tuesday night. The second major change concerns the department of Finance, where Abderrahmane Raouya yields his chair to the governor of the central Bank, Aymen Ben Abderrahmane. The reorganization of the government, including the rumor the last few days in Algiers, also affects higher education, agriculture, transport and tourism.
Read also the Maghreb : the savings seek oxygen
The economic and social challenges of specific…
Algeria, very vulnerable to the drop in oil prices and faces a crisis of the political system coupled with a health emergency, sees approaching the threat of a financial collapse and social unrest. The central Bank has recently published alarming figures on the collapse of the banking liquidity. With regard to foreign exchange reserves, they melt. They fell under the 60 billion dollars (55 billion euros) at the end of march, against 79,88 billion dollars (73 billion euros) by the end of 2018 and 97,22 billion (with 88.8 billion euros) by the end of 2017. According to some economists, these reserves may be depleted in the very short term.
also Read Algeria : traders relieved, but the crisis continues
given the collapse of crude prices in recent months, the reference price of a barrel of oil has been reduced from 50 to 30 dollars (from 45 to 27 euros) in the recent finance act complementary. Algeria is particularly exposed to fluctuations in the price of oil per barrel because of its dependence on oil revenue, which represents more than 90 % of its external revenue, and the low diversification of its economy. To face this worrying situation, the government has decided to reduce by half the operating budget of the State and announced that it will reduce the huge import bill 41 to $ 31 billion (38 billion to 28 billion euros).
also Read Algeria : the private sector at the edge of the precipice
also Read Algeria : the conspiracy for dummies
… but Algiers refuses to resort to external actors
Algiers is also waived recourse to the firms expertise foreign to his great plans to save $ 7 billion (6.5 billion euros) per year. And the giant public of hydrocarbons, Sonatrach will reduce its budget in 2020 by 50 %, or the equivalent of $ 7 billion (6.5 billion euros). The president Tebboune, who was excluded in the name of “national sovereignty” of contracting loans from the IMF and international financial organizations, has itself recognized “the vulnerability of the algerian economy” because of our neglect for decades to the release of the oil rent “. According to forecasts of the IMF, Algeria is expected to experience a recession in 2020 (to 5.2%), as well as a budget deficit among the highest in the region due to the oil crisis and the pandemic of sars coronavirus.
also Read Algeria : should it be “déconfiner” the hirak ?
writing will advise you
Algeria : the private sector at the edge of the precipice Maghreb economies seek oxygen Algeria : the conspiracy for dummies Algeria : traders relieved, but the crisis persists Algeria : should it be “déconfiner” the hirak ?
