With a subsoil rich in oil and, above all, gas, and growing economic resources, the 2000s got off to a good start for Algeria and its 40 million inhabitants. Until 2015, hydrocarbons provided the country with growing prosperity and stabilityThis enabled the country to pay off its foreign debt and build up solid financial reserves. At the time, the sector contributed 35 % of GDP. A considerable part of the Algerian economic model that soon showed its limits.

"A certain caution

Today, with the slowdown in hydrocarbon exports and ageing oil fields, you don't have to look very far to understand the reasons for the slowdown in Algeria's enthusiastic business climate. There is no widespread panic, but as most local observers point out, "a certain caution" is noticeable among potential investors.

That's right, the slowdown in oil and gas exports This year, the economic slowdown has resulted in a 9 % drop in public spending and a reduction in subsidies. This is a major blow to an economy that had sheltered itself from social tensions during the Arab Spring thanks to public spending and consumer support.

The country still has the highest GDP per capita in North Africa. But for this still under-exploited economic force, it is high time to reinvent itself, in particular by promoting high value-added exports. Hence a new economic growth model that aims to raise higher tax revenues by focusing on investments in promising sectors such as agro-industry, renewable energies, services, the digital economy and the knowledge economy.

Initiatives to boost the economy

In an attempt to boost the economy, the Algerian authorities have turned their attention in particular to small and medium-sized enterprises (SMEs), with a series of tax initiatives and reforms to encouraging growth of these structures. According to some estimates, SMEs account for 95 % of Algeria's productive fabric.

The results of the government's strategy are therefore being closely watched by foreign investors. For, at the same time, the country is suffering from its traditional ills. According to the IMF in its 2016 consultations, "the extent of bureaucracy and the cumbersome nature of administrative procedures"As a result, the authorities, keen to remedy the situation and encourage efforts to diversify the economy, recently amended the investment code. As a result, the authorities, keen to remedy this situation and encourage efforts to diversify the economy, recently amended the investment code. The administrative procedures for investors have thus been simplified, which has Reduced red tape on private sector projects.

Recently, foreign observers have also noted room for potential relaxation of the 51 %-49 % rule. This regulation, under which the majority of the capital of foreign companies based in Algeria must be owned by the Algerian party, is still in place, but it could soon be amended.

Foreign investment in Algeria on an upward trend

These are all signs that are being interpreted positively. The World Bank ranks Algeria at 156^th place out of 190 countries in its "Doing Business 2017" report for ease of doing business, an improvement of seven places on the previous year.

This improved score is due to a reduction in the minimum capital required to start up a business, shorter timescales for obtaining planning permission, greater transparency in electricity tariffs and a reduction in business tax. However, Algeria is well ahead of its regional neighbours, Morocco (68^th place) and Tunisia (77^th place).

This is not stopping foreign companies from setting up here in several key sectorsThe pharmaceutical industry is a prime example. The Algerian government is insisting on a goal of virtual self-sufficiency in pharmaceutical products. The Sidi Abdallah plant is an emblematic project in this area, requiring an investment of €85 million from Sanofi, and will create 130 new direct jobs next year. This plant, which will be added to Sanofi Algeria's two other production units, will make this subsidiary the French group's largest on the African continent.

In the automotive sector, German carmaker Volkswagen recently became the third group to install an assembly plant in Algeria after France's Renault in 2014 and South Korea's Hyundai in 2016. Construction of the Volkswagen plant, 300 kilometres west of Algiers, represents an investment of over €170 million for a site that will produce up to 200 vehicles a day.

The question is whether these diversification efforts, aided by foreign investment, will have a sufficiently rapid impact. The World Bank has noted that "the possibility of social discontent resulting from lower government spending and higher taxes poses a risk for Algeria".

Young people seek their place

So far, the country has withstood the spikes in violence seen in some of its neighbours. But it is also vulnerable to accusations of corruption, nepotism and resistance to modernisation, which have led to social unrest in neighbouring countries.

There are also security and terrorism. In March 2016, three years after the serious incident at In Anemas that caused 67 deaths, a new attack led BP and Norway's Statoil to withdraw their employees from the country. Algeria now has the largest defence budget in Africa and spends a large proportion of its resources protecting its southern borders from the threat of Islamist groups. The country has also considerably increased its police force. There is currently one policeman for every 187 inhabitants.

In this relative lull, while hoping for the best, Algeria lives from day to day. Its society is slowly evolving, far from the stereotypes of the past. In 2016, despite opposition from conservative groups, a new law came into effect to punish violence against women with 10 to 20 years' imprisonment.

But with 46% of Algerians under the age of 25, its young people remain the biggest losers in the economic slowdown. The unemployment rate for young people aged 16 to 24 is officially around 27 %, and a large proportion of young people in cities are employed in one or two irregular part-time jobs. The informal sector still accounts for a major part of the Algerian economyDespite the efforts of ANSEJ (Agence Nationale de Soutien à l'Emploi des Jeunes), 92% of the projects financed are under 35 years old.

Nevertheless, it is in this atmosphere that a new generation is awakening in Algiers and the country's major cities. They are beginning to invest in the economy through start-ups, and in the world of art and culture through associations and collectives. The emergence of visual artists and talent in street art and graphic design symbolises this breath of fresh air for a creative youth who increasingly dream of participating in the country's renewal.

PRACTICAL INFORMATION

Formalities : A visa is compulsory for French nationals wishing to visit Algeria (cost of visa: €90 for less than 90 days, €125 for more than 90 days). The business visa application must be supported by a letter from the employer or a letter of invitation from the partner in Algeria. Hotel reservations or proof of payment by the inviting organisation are also compulsory. The award period varies between 01 and 14 days.
No vaccinations are required on entering the country. No special health precautions are required.

Currency : exchange rate: 1 euro = 133 DZD. International payment cards are not widely used, with the exception of the major international hotels.

Time difference with France : There is no time difference between France and Algeria in winter. However, from the end of March, France switches to summer time.

GETTING THERE

Several Algerian cities are now served by national and foreign airlines. Paris is about a 2-hour flight from Algiers.

Air France

Several weekly flights from Paris and several provincial cities
Address: Tour Algeria Business Center, 16000, Pins maritimes - Algiers
Booking service 
Tel: +213 (0) 21 98 04 04
Fax: +213 (0) 21 98 04 44
www.airfrance.dz

Air Algérie 

Paris and several regional cities are served by the Algerian national carrier
Main branch: 1, Place Maurice Audin, 16000, Algiers
Tel.: +213 (0) 21 63 33 40
Fax: +213 (0) 21 74 44 25
www.airalgerie.dz

Aigle Azur

The airline offers flights from Paris and four other French cities (Marseille, Toulouse, Lyon, Lille, Mulhouse).  
11, avenue Pasteur, 16000 Algiers
Tel: +213 (0) 21 64 13 13/20 20
Fax: +213 (0) 21 64 17 39
www.aigle-azur.fr

PRACTICAL SERVICES

Business centres

Les Pins maritimes Business Centre
https://www.regus.fr/office-space/algeria/algiers/algiers-les-pins-maritimes
Algeria Business Centre, Pins Maritime, Mohammadia, Algiers
+213 21 98 52 50

Bab-Ezzouar Business Centre
Bab-Ezzouar Business Center, Quartier d'Affaires d'Alger, Commune de Bab-Ezzouar, 16000 Algiers
+213 21 98 52 52

Office space and co-working

Buro Club Algiers
Private offices or shared open spaces: 40 workspaces from 10 to 30 m² available.
Les Arcades de l'Amirauté, 1 bd Amilcar Cabral, 16003 Algiers
+213 21 439 425
https://www.buro.com/centre-affaires/alger-algerie-35/location-bureau-professionnel-equipe/

The address
Mohammedia Shopping Centre, fourth floor, office 1163, Algiers
+213 23 80 41 04
E-mail : contact@theadress-dz.com
http://www.theaddress-dz.com

Sylabs
A space for start-ups, Sylabs is located in Algiers-centre, close to the French Institute.
8 rue Capitaine Hassani, Algiers centre
+213 21 739 074
http://sylabs-dz.com/

Car and limousine rental agencies

Dib Location Auto
43, rue Hocine Beladjel (ex rue édith Cavell), 16000, Algiers
+213 021 68 13 54
+213 0770 49 03 79
+213 0770 30 48 09
E-mail : dib_lot@hotmail.fr
http://www.dib-lot.com

Aymen Car Services
Val d'Hydra, 16000, Algiers, Algeria.
+213 0770 562 242
+213 0661 550 439
E-mail : info@aymen-carservices.dz
Website : http://www.aymen-carservices.dz
Facebook page: https://fr-fr.facebook.com/AymenCarservices/

Business information

French Embassy in Algeria 
25 Chemin Abdelkader Gadouche, 16035 Hydra - Algiers
Tel. : + 213 (0) 21 98 17 17
www.ambafrance-dz.org 

Business France Office - ALGERIA 
French Embassy - 25, chemin Abdelkader Gadouche
16035 Hydra, Algiers
Contacts:
AGROTECH sector: +213 (0) 21 98 17 38
AM channel: +213 (0) 21 98 15 66
ITI channel: +213 (0) 21 98 15 77
NTIS channel: +213 (0) 21 98 15 78
MHS sector: +213 (0) 21 98 15 69
Fax : +213 (0) 21 98 17 48
E-mail : alger@businessfrance.fr 

CCIP - Algiers Office (Paris Chamber of Commerce and Industry)
ESAA les pins maritimes, 16130 El-Mohammadia, Algiers
Tel. : + 213 (0) 21 21 98 67
Fax: + 213 (0) 21 21 98 67
E-mail : nsellal@ccip.fr