Algeria ready to strengthen trade and industry ties with South Africa

Algerian ambassador to South Africa Abd-El-Naceur Belaid called for stronger economic partnerships between Algeria and South Africa at an Algeria-South Africa trade and investment summit held in Johannesburg.

Algeria is bordered by the Mediterranean Sea on the north, Morocco, Western Sahara and Mauritania on the west, Mali and Niger on the south, and Libya and Tunisia on the east. It is the largest country on the continent and has a diversity of climate and landforms. (Image: Wikipedia)

Chris Anderson

Belaid was speaking at a gathering in Johannesburg on 22 March 2017 with members of the South African business community, the Department of Trade and Industry (DTI), Industrial Development Corporation (IDC) and other groups, organised by Brand South Africa.

The ambassador presented an overview of his country’s economic climate, as well as the huge investment opportunities offered to foreign investors and the measures taken by the Algerian government to encourage them.

This latest conference followed a visit by South African business representatives to Algeria in December 2016. Reaction on that visit was positive regarding Algeria’s vast investment in infrastructure, the development of strong international relations, and a keen enthusiasm for engaging with good, solid ideas from the rest of Africa.

Those at the March 2017 conference who had been part of the earlier visit to Algeria, spoke informally of the exciting growth and potential in the country’s economy, and the government’s desire to make investment and business relationships both easy and beneficial.

Not just oil

Algeria is still considered one of the largest and most important producers and exporters of oil and natural gas in the world. While the country had suffered huge losses as a result of the drop in oil prices over the past 10 to 15 years, the Algerian government, said Belaid, had constantly been engaged in creating reforms to cushion the impact of this decline.

Traditionally having a state-controlled, more bureaucratic-oriented economy, the country was now actively encouraging a diverse private sector. Relaxed government legislation had allowed for more foreign investment, modern industry diversification and business partnerships.

This new model for growth had enabled Algeria to achieve lower national debt and stabilised reserves. Taking note of this, in their latest reports the World Bank and International Monetary Fund forecast that the country’s growth could hit 3.9% in 2017.

However, said Belaid, there was still much reputation-building to be done for Algeria.

Algeria and North Africa

In what he diplomatically called a “lack of information” about Algeria and its relation to the often turbulent politics of North Africa, Belaid said that over the past 20 years his government had made a concerted effort to defeat terrorism threats that were prevalent in the country in the 1990s, striving to remain immune to its effects while countries around it went through more troubling times.

Realising that solutions to growth were more often than not economic rather than political, the Algerian government would begin a huge campaign of economic development and infrastructure investment, “across the board”, in all sectors of industry, from agriculture and mining, tourism and technology, to industry and finance.

Notable Algerian infrastructure investments

He highlighted a few infrastructure projects, specifically the Trans-Saharan Highway. It dissected the famous desert that makes up much of the country’s landmass. For centuries, the Sahara remained impenetrable for the economic expansion of Africa, but thanks to the impressive road system built across it, the highway was now “a modern (economic) connection between Europe and Africa, with Algeria as its centre”.

A modern port system, outside the capital Algiers, was fast becoming part of the global shipping system – alongside Cape Town and Durban harbours – that connected Europe and Africa with Asian markets.

Water infrastructure had been another of Algeria’s favoured investments, with more than 40 dams built over the past 10 years. These had boosted an agriculture sector that would otherwise have been stifled by the desert.

The Algerian motor industry was another success. A number of big global names were building manufacturing plants in the country – Volkswagen, Hyundai and Toyota had increased their presence in the industry. Belaid also said there was a large automotive parts manufacturing industry in Algeria.

Tourism was also another big focus for the country. Belaid said Algeria, as the largest country in Africa, offered a variety of landforms – mountains, deserts, ocean – and diverse and comfortable climates. While still underdeveloped, Algeria’s rich natural and historical heritages were notable assets for potential investment opportunities.

All this potential for development, Belaid said, had made Algeria a progressive player in the global economy, comparable to Europe, as well as a significant African economic power.

Today, he said, was a crucial time for his country. “We have the resources, we have built the infrastructure… we now need to develop it further, look at diversification of industry, invest in high value and dynamic ideas.” Some of those ideas included an expansion of Algeria’s digital economy, a focus on renewable energy and emphasis on the financial sector.

For more details on Algeria and potential opportunities, click here to read a special feature focusing on the country in the latest issue of Export & Import Southern Africa.

Algeria and South Africa

This is where the relationship with South Africa became so important. As Belaid said, African countries looked to South Africa for that “Madiba magic”, referring to late president Nelson Mandela’s global influence that still permeates the country’s identity even years after his passing.

More than just a marketing idea or window dressing, the “magic” still informed how South Africa presented itself to the world, whether it was economically, socially or politically.

Algeria, Belaid said, wanted to work with that. Specifically, Algeria admired South Africa’s level of professionalism and competence in the financial sector, industry and digital economy.

Joining Belaid for a discussion panel during the conference, representatives from the DTI and the IDC offered plans to support furthering the economic relationship between the two countries.

Lerato Matabage, CEO of Trade Invest Africa at the DTI, in particular, highlighted Algeria as the number one priority in North Africa for South African investment. Currently investing R13-billion in the partnership, the DTI wanted to increase this investment by prioritising a much-needed framework update to the current economic agreement with Algeria. It also wanted a more physical presence in the country through the establishment of more sector-specific missions and expanding the DTI presence in Algiers.

Matabage wanted South African businesses to take the relationship with Algeria seriously, saying opportunities and potential for growth between the countries were vast and dynamic.
Peter Lekhethe, senior development manager at the IDC, emphasised the One Africa ideal for economic growth on the continent.

Nation relationships, he said, should focus beyond political differences and boundary issues, and concentrate on building the economic strength of Africa as a whole. With the right policies and removing bureaucratic limitations to trade and investment, doing business in Africa would be easier, simple to implement and beneficial to all parties.

Belaid urged potential investors to stay informed about Algeria and understand the differences between it and the rest of North Africa. “Algeria is a beautiful and strong country, with strong economic ideas and a huge potential for developing stronger relationships with South Africa and the rest of the continent. We are open for business,” he concluded.

Source: Embassy of Algeria South Africa, Export & Import Southern Africa magazine

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