Algeria: 2019, year of non-hydrocarbon exports?

While the price of the barrel of Brent are unstable and experiencing another significant decline, falling below the symbolic threshold of 50 dollars, Algeria wants to focus on the export of domestic production to increase foreign exchange earnings. The Algerian government is making ambitious declarations on this subject, but constraints still exist …

By Zahra Rahmouni, in Algiers

« The Algerian product can compete with the products of other countries in terms of quality and price, » said Said Djellab, Minister of Commerce, in an interview on Algeria’s national radio. In 2019, his department wants to promote exports by placing them at the center of economic debates. A roadmap that will cover the necessary aspects for the development of exports, will be promulgated in January 2019. These include involving Algerian economic operators and improving the role of support organizations such as the National Promotion Agency. Foreign Trade and the Algerian Society of Fairs and Exports (Safex).

According to the Minister of Commerce, the total amount of non-hydrocarbon exports is expected to be $ 2.8 billion for the year 2018. « We have had an increase of more than 50% in exports of non-hydrocarbon products (…) Apart from the products of the petrochemical sector, the bulk of exports are for industrial products and then for agri-food products, « says Said Djellab. Logistics, transport and repatriation of foreign currency are among the main export challenges for economic operators.

It will ease a device that « is heavy and hinders the act of export, » concedes the minister who also recalls that a 50% support already exists for shipping, land or air transport through the Export Fund.

Internationalization of Algerian banks

« If we talk about export’s improvement, it should perhaps be better to listen to our banks, » suggests Mustafa Bordji, Deputy Sales Director of Cobra Electronics Group. « Banks need to deepen their follow-up with their clients because when it comes to delivery and export, the war of nerves is money. However, sometimes we are confronted with files that take time in terms of repayment or repatriation of foreign currency, « he adds.

To support these operators, the government announced the installation in France of the Bank of Algeria (BEA), the largest public financial institution in the country. « Before that, there is already a measure that has been taken with the creation of an entire department to support exporters, » says Djamila Aguentil, BEA’s communications officer. « The experience began with five companies including the Industrial Group of Cements of Algeria, Venus, or Sonatrach that are among our customers. We give advice on the export procedure, how to make transfers especially for money transfers and repatriation of foreign currency, « she adds.

Scheduled for the year 2018, the public bank will finally open its first branch in Paris in 2019 and is currently studying a facility in thirteen departments. « The advantage is that we have a European approval and not only French so we can open throughout Europe. Subsequently, we are aiming for openings in Africa, « adds the manager.

Priority for African markets

« The future market for the next thirty years is Africa. It’s not just the export, but the presence on the African market, « said the Minister of Commerce. Negotiations have begun with Mauritania for the establishment of a preferential agreement that aims at reducing tariffs, said the same official.

For Algeria, Mauritania is also a gateway to West Africa, which represents a market of 300 million consumers. This summer, the two states inaugurated their first land border crossing to facilitate the transit of goods, and in December 2018, a first convoy of 400 tons of agricultural, household and sanitary products made their way to Nouakchott. It will be followed, in the coming days, by two other export operations, one of which will go to Dakar, Senegal.

 Public policies’ accompaniment

Even if the difficulties persist, the entrepreneurs meeting in the alleys of the National Production Fair in Algiers are optimistic. They note a real involvement of the state in recent years. The event that took place in December 2018, was also under the theme of exports.

« The state encourages us and opens all doors for us, » says Boudjemaa Kemiche, CEO of Ifri Group. « We have never had any difficulties from 1994 to date. We have always been accompanied by the Minister of Commerce and especially by Safex. We do all the fairs in the world for which we have an 80% drawdown. It is during these fairs that we can attract customers, » adds the same speaker whose products are consumed in Canada, China and South Africa.

« We always have a priori on the administrative side but for my part it was erased after the first test export we managed thanks to the Algerian Chamber of Commerce and Industry (CACI), » recalls Mustafa Bordji evoking an operation towards Tunisia. « If the teams of the CACI had not helped us on the various steps, we could not have delivered within 48 hours. If all the documents are ready then the files are looked after very quickly, « he explains. The company has also benefited from export training programs for its teams. « We have been invited to conferences with different ambassadors in Algiers including that of Mali and Senegal. In 2019, we will do everything possible to participate in the fairs that are proposed by the CACI and the Ministry of Industry and Mines to assess opportunities and get in touch with the ambassadors, « says Mustafa Bordji who pointed out that the company intends to do well in 2019, the year of exports.

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