Algeria Economy

By | September 29, 2021


Despite domestic political unrest and the state of emergency that ran from 1992 to 2011, Algeria is still an important industrial state in the Arab world. The dominant branches of the economy are the extraction and processing of oil and natural gas. As a result of the falling income from the oil business due to a drop in prices on the world market, economic growth fell from (2014) 3.8% to (2017) 1.5%. Problem areas of the Algerian economy are the widespread corruption and nepotism in the public sector the official unemployment of (2017) 10%; for youth unemployment (15 to 24 year olds) of 24%. Around 10% of the population live below the poverty line. In terms of economic policy, Algeria is endeavoring to open up industries outside of the oil sector and to expand trade and infrastructure as well as improvements in education and health care. Visit weddinginfashion for Economy of Northern Africa.

Foreign trade: The scope of foreign trade is largely determined by the development of sales and prices on the world energy market. Algeria traditionally generated a foreign trade surplus, which, however, only lasted until 2014 due to the unfavorable development of the oil price on the world market (2017: import US $ 46.1 billion, export US $ 35.2 billion). Oil and gas as well as refined products are practically the only export good; they account for 96% of total exports (2017). Capital goods and machines, industrial intermediate products, food (especially grain) and consumer goods are imported. The main customer countries are Italy, Spain and France; The main supplier countries are China, France, Italy and Germany.


Although 85% of the country’s area consists of desert and only 3.5% is used as arable land and for permanent crops, (2017) 12.8% of those in employment work in the agricultural sector. A narrow strip of land between the Mediterranean Sea and the Schotts highlands offers favorable conditions for growing grain, fruit and vegetables. The most important staple foods are wheat, barley, millet, legumes and vegetables. Other agricultural products are sugar beets, potatoes, dates and wine. The livestock industry is concentrated in the Schotts highlands, the Sahara Atlas and the steppe areas to the south. Sheep, goats, cattle and chickens are dominated. Although in the 1980s it was mainly through the conversion of the former socialist villages into smaller, collectively farmed agricultural units,

Forestry: Only 1% of the country’s area is forested. Cork and holm oaks, Aleppo pines and various types of eucalyptus are of little economic importance as timber. Almost 100% of the logging is used as firewood. Since the 1970s, pines have been planted in a 1,500 km long and 20 km wide green belt at the foot of the Sahara Atlas to protect against desertification, which is advancing northwards (green wall).

Fisheries: The great abundance of fish along the 1,200 km long coast is still little used; both the fishing fleet and the infrastructure are outdated. The catch was (2015) 97 700 t. The main catches are sardines, anchovies and tuna.

Natural resources

The most important natural resources are oil and natural gas. Algeria also has – still largely untapped – deposits of mineral raw materials such as iron ore (Ouenza iron ore mines near the border with Tunisia), lead, zinc, uranium, gold (deposits in the south of the country), copper, mercury, pyritic sulfur and barite. Algeria also has large phosphate deposits (in Djebel Onk) and is one of the major phosphate producers (2016: 1.5 million t).

Energy industry

The energy industry has been the engine of the Algerian economy since the early 1970s. Around 96% of the annual export income comes from the export of crude oil and natural gas. The OPEC -member Algeria is one of the largest African oil producer. The main extraction areas are Zarzaitine-Edjeleh near the border with Libya and Hassi-Messaoud 500 km south of Constantine. This was discovered in 1956 as the first oil field in North Africa. While the proven oil reserves (2017: 1.5 billion t) will be exhausted in the foreseeable future if the production volume remains the same, Algeria has significant natural gas reserves. The secured stocks amount to around 4,300 billion m 3. Hassi Rmel, the largest natural gas field by faris 500 km south of Algiers. The Trans-Med pipeline, which was opened in 1982 and transports up to 16 billion m 3 of natural gas annually from Hassi Rmel via Cape Bone (Tunisia) through the Mediterranean to Sicily (1,070 km) and into the European natural gas pipeline network, is of central importance for natural gas transport feeds. The Maghreb – Europe (GME) gas pipeline from Hassi Rmel to Córdoba (Spain) and Camp Mayor (Portugal) has been in operation since 1998.


After gaining independence in 1962, building up industrial production capacities was a focus of the Algerian development strategy. In the 1970s, Algeria advanced to become the Maghreb country with the most efficient manufacturing industry thanks to its foreign exchange income from oil exports. Due to the restrictions on private and foreign investments that lasted until the end of the 1980s, the industry fell into a deep structural crisis. Since the mid-1990s, under pressure from the International Monetary Fund, the government has pushed ahead with the restructuring and privatization of the large state-owned companies that make up the majority of Algerian industry. The most important sectors are the metal, electrical, textile, chemical and food industries as well as the construction industry. Arzew and Skikda are major centers of the petrochemical industry with petroleum refineries, natural gas liquefaction plants and fertilizer plants. The iron and steel industry is concentrated in Annaba. Since 2002 the government has been investing more and more outside the energy sector. Small businesses and private handicrafts predominate in the private sector.

Algeria Economy