Economy: World Bank congratulates Algeria for progress made in implementing structural reforms- report
BY: Hana Saada
ALGIERS- The World Bank welcomed the progress made by Algeria in terms of the implementation of the various projects of structural reform initiated over the past two years to improve the economic and financial environment, according to a press release released yesterday by the Ministry of Finance.
In fact, the World Bank hailed Algeria’s economic reforms as a catalyst for the country’s economic growth. Algeria has been working towards diversifying its economy for years now, with the hope of moving away from an over-reliance on oil revenues. The reforms introduced are aimed at enhancing investment and increasing the country’s overall competitiveness.
Growth and business climate
One of the striking features of the Algerian economic reforms is the increased focus on entrepreneurship and innovation. The country has adopted several policies to support the small and medium-sized enterprises (SMEs) sector, which is critical to achieving a diversified and inclusive economy. Research has shown that SMEs are significant drivers of job creation and economic growth, particularly in developing countries. By providing an enabling environment for these businesses to thrive, Algeria can unlock the potentials of its vibrant young population, reduce unemployment, and increase productivity. The World Bank has commended the Algerian government on these initiatives and encouraged more efforts in this direction.
In fact, in its latest report monitoring the economic situation in Algeria, published last January, the WB notably anticipated a continuation of the recovery in growth in 2023, supported in particular by non-hydrocarbon activity. The report underlined that Algeria’s real GDP should “grow by 2.3% for this year, driven by its non-hydrocarbon component (+3.1%) and that of hydrocarbons (+0.5%).”
Economic growth should be “supported by the full recovery of the service sector,” “the rebound in agricultural activity,” and “the increase in public investment,” particularly in “the industrial and construction sectors,” further specified the WB, expecting an increase in the country’s gross domestic product to nearly 198 billion dollars in the current fiscal year.
In terms of structural reforms, the WB report also highlighted the advent of the new investment law, indicating that it aims “to improve the business climate in order to increase private, national, and foreign investments in the activities of the production of goods and services”.
This new text, further explained the Bretton Woods institution, “defines the rights and obligations of investors as well as the incentive regimes granted to investments”, while carrying important regulatory changes aimed “to strengthen the attractiveness of the country and to simplify the administrative procedures for the establishment and operations of investors”.
Similarly, it is mentioned in the same report that the new investment law introduces “the principle of freedom to invest and equal treatment of investments, as well as the guarantee of transfer for foreign investors.
It should be emphasized that the recent favorable findings drawn up by the WB on the evolution of the Algerian economy are also corroborated by those of the other Bretton Woods institution, in this case the IMF, which underlined in substance, through its latest report on Algeria, that “the legislative reforms recently adopted or in progress, in particular the new investment bill and laws relating to auto-entrepreneurship and renewable energies, could help create an environment more conducive to private sector activity.”
In conclusion, Algeria’s economic reforms are a positive step towards achieving a more diversified and resilient economy. The country’s focus on entrepreneurship and innovation is a welcome development that can unlock economic potential and reduce unemployment. The World Bank’s recognition of these efforts is undoubtedly a sign that the country is on the right path.
