BY: Hana Saada
ALGIERS- Two experts from the World Bank, Cyril Desponts, senior economist in the Global Macroeconomics, Trade, and Investment expertise group, and Eric Le Borgne, Unit Chief for the Middle East and North Africa (MENA) in the same group, used satellite imagery to supplement data on Algeria’s GDP available until the fourth quarter of 2022. The experts leveraged satellite imagery capturing nighttime light intensity as a timely and reliable indicator of economic activity. Published on Voix Arabes, the analysis notes that oil and gas production and processing “generate significant amounts of light, particularly visible around the Hassi Messaoud oil field (Ouargla province) and the Hassi R’mel gas field (Laghouat, Ghardaïa), as well as in the oil and gas-producing provinces of Adrar and Illizi.”
The correlation between hydrocarbon GDP and nighttime light from oil and gas production and processing sites is described as “remarkable.” The experts emphasize that “non-flaring nighttime light in gas-producing provinces explains 69% of the monthly production level of natural gas, with a statistically significant coefficient on the lighting of the Hassi R’mel gas field. By adding lighting from the flaring of oil refining and gas liquefaction plants in Arzew and Skikda, nighttime lighting explains 80% of the actual quarterly value added of hydrocarbons.” The analysis suggests that “a 1% increase in nighttime lighting is associated with a 0.5% increase in non-oil GDP.”
As a result, “nighttime lighting is a good approximation of economic activity in Algeria and provides insights into regional growth dynamics.” With estimates based on nighttime lighting available with just a one-month lag, the World Bank indicates that strong non-oil growth in 2022 continued during the first nine months of 2023, suggesting a year-on-year growth of 4.5%. Given the stability of hydrocarbon production, “GDP growth would have accelerated to reach 3.6% in the first nine months of the year. This growth would be faster than pre-COVID years and recalls Algeria’s growth performance before 2015.” Considering its value-added, nighttime lighting data analysis “is now an integral part of the World Bank’s semi-annual Economic Situation Monitoring Report on Algeria.”
