Algeria
Location:
Northern Africa,
Area:
total: 2,381,741 sq km
land: 2,381,741 sq km
water: 0 sq km
Capital City;
Algiers
Land boundaries:
Total: 6,734 km
border countries (7):
Morocco 1,900 km,
Mali 1,359 km,
Tunisia 1,034 km,
Niger 951 km,
Libya 989 km,
Mauritania 460 km,
Western Sahara 41 km
Coastline:998 km
Total: 7732 km
Algeria



Climate:
arid to semiarid;
mild, wet winters with hot, dry summers along coast;
drier with cold winters and hot summers on high plateau;
sirocco is a hot, dust/sand-laden wind especially common in summer
Terrain:
mostly high plateau and desert;
some mountains; narrow, discontinuous coastal plain
Elevation:
mean elevation: 800 m
elevation extremes: lowest point: Chott Melrhir -40 m
highest point: Tahat 2,908 m
Natural resources:
petroleum, natural gas, iron ore, phosphates, uranium, lead, zinc
Land use:
agricultural land: 17.4%
arable land 18.02%; permanent crops 2.34%; permanent pasture 79.63%
forest: 0.82%
other: 81.8% (2014 est.)
Irrigated land:
13,600 sq km (2014)
Population – distribution:
the vast majority of the populace is found in the extreme northern part of the country along the Mediterranean Coast
Natural hazards:
mountainous areas subject to severe earthquakes;
mudslides and floods in rainy season;
droughts.
People and Society
As of June 2017, Algeria’s population was an estimated 41 million, who are mainly Arab-Berber ethnically. At the outset of the 20th century, its population was approximately four million. About 90% of Algerians live in the northern, coastal area; the inhabitants of the Sahara desert are mainly concentrated in oases, although some 1.5 million remain nomadic or partly nomadic. 28.1% of Algerians are under the age of 15. For the first two-thirds of the 20th century, Algeria’s high fertility rate caused its population to grow rapidly. However, about a decade after independence from France in 1962 the total fertility rate fell dramatically from 7 children per woman in the 1970s to about 2.4 in 2000.
Algeria’s fertility rate experienced an unexpected upturn in the early 2000s, as the average woman’s age at first marriage dropped slightly. The reversal in fertility could represent a temporary fluctuation in marriage age or, less likely, a decrease in the steady rate of contraceptive use. Thousands of Algerian peasants mainly Berber men from the Kabylia region faced with land dispossession and economic hardship under French rule migrated temporarily to France to work in manufacturing and mining during the first half of the 20th century.
Not until Algeria’s civil war in the 1990s did the country again experience substantial outmigration. Many Algerians legally entered Tunisia without visas claiming to be tourists and then stayed as workers. Other Algerians headed to Europe seeking asylum, although France imposed restrictions. Sub-Saharan African migrants came to Algeria after its civil war to work in agriculture and mining. In the 2000s, a wave of educated Algerians went abroad seeking skilled jobs in a wider range of destinations, increasing their presence in North America and Spain. At the same time, legal foreign workers principally from China and Egypt came to work in Algeria’s construction and oil sectors. Illegal migrants from sub-Saharan Africa, particularly Malians, Nigeriens, and Gambians, continue to come to Algeria in search of work or to use it as a stepping stone to Libya and Europe.
Population:
40,969,443 (July 2017 est.)
Nationality:
Algerian(s)
Ethnic groups:
Arab-Berber 99%, European less than 1%
Languages:
Arabic (official), French (lingua franca), Berber or Tamazight (official); dialects include Kabyle Berber (Taqbaylit), Shawiya Berber (Tacawit), Mzab Berber, Tuareg Berber (Tamahaq)
Religions:
Muslim (official; predominantly Sunni) 99%, other (includes Christian and Jewish) <1% (2012 est.).
The Berbers were the original inhabitants of the region. The first invaders were the Phoenicians, whose empire covered the area that is today Lebanon. They began establishing ports along the Mediterranean in 1200 B. C. They built the cities of Constantine and Annaba in the east of present-day Algeria, but aside from teaching the Berbers how to raise crops, for the most part, they kept their distance from them. The Arabs swept across North Africa in the seventh century, and again in the eleventh century. The Berbers put up resistance, particularly to the edict that both religious and political leaders could only be Arabian. The second Muslim conquest saw a great shift in Berber civilization, as the people were forced to convert in great numbers or to flee to the hills. However, as internal conflicts began to sway the Muslim stronghold in North Africa in the fifteenth century, Europeans capitalized on this, and by 1510 Spain had seized Algiers, Oran, and other important port cities.
The national identity of Algeria is based on a combination of Berber and Arab cultures. The strong influence of Islam in all aspects of Algerian life creates a sense of identity that extends beyond national boundaries to include other Arab nations. Opposition to the French colonizers also has been a uniting force in defining a sense of identity in Algeria. Many of the villages located in Algeria’s desert region such as the oasis town of El-Oved in the Sahara feature high stone border walls for privacy. Many of the villages located in Algeria’s desert region such as the oasis town of El-Oved in the Sahara feature high stone border walls for privacy.
There is some distrust between the Arabs and the Berbers, which dates back centuries to the conquest of the area by Arab settlers. Although most Berbers have adopted the Islamic religion, they remain culturally distinct, and even when they are forced to migrate to the cities in search of work, they prefer to live in clans and not integrate themselves into the dominant Arab society. The Kabyles are the most resistant to government incursion. The Chaouias are traditionally the most isolated of all the Berber groups; the only outsiders their villages received were occasional Kabyle traders. This isolation was broken during the war for independence, when the French sent many of the Chaouias to concentration camps.
While most of Algeria’s desert is uninhabited, it does have some villages, many of them surrounded by stone walls. Reflecting the same values of privacy and insulation, traditional homes also are walled in. The rooms form a circle around a patio or enclosed courtyard. Most architecture, from modern high-rises to tarpaper shacks, uses this same model. Traditional building materials are whitewashed stone or brick, and in older houses, the ceilings and upper parts of the walls are decorated with tiled mosaics. Nomads of the desert and the high plateau live in tents woven from goat’s hair, wool, and grass. In the Kabylia Mountains, villagers build their one-room homes of clay and grass or piled stones, and divide the room into two parts, one for the animals and one for the family.

Education
The principles governing the Algerian educational system are stipulated in the Algerian Constitution, that education is an inalienable right. Education is one of the major prerogatives assigned to the State, which allocates to it a substantial budgetary envelope. The school system is characterized by the centralization of programs, methods, and schedules. However, the management of institutions and staff is decentralized. The State guarantees the right to education for all Algerians and Algerians without discrimination on grounds of sex, social origin or geographical origin. The right to education is embodied in the generalization of basic education and in the guarantee of equal opportunities in terms of the conditions of schooling and the pursuit of studies after basic education. Education is compulsory for all girls and boys aged 6 to 16 years.
Students are primarily taught in Arabic, although teachers have been allowed to teach in Berber Tamazight as of 2003. Berber teaching is allowed in Algerian schools to remove the complaints of Arabization and need for non-Algerian teachers. Before colonialism, Algeria was home primarily to Arabic and Berber speakers. Due to Algeria’s French colonial past, French was the first foreign language taught in Algerian schools. However, a month before independence, Algerian revolutionary leaders declared that the future State would be committed to arabisation. Ahmed Ben Bella implemented linguistic arabisation laws in primary schools and required teaching in Arabic on all levels from 1963-1964. In 2004, language restrictions were enforced that made 90% of all teaching in Algerian schools in Arabic. In November 2005, Parliament passed laws that banned private schools from teaching in any other language but Arabic.
Algeria has 26 universities and 67 institutions of higher education, which must accommodate a million Algerians and 80,000 foreign students in 2008. The University of Algiers, founded in 1879, is the oldest, it offers education in various disciplines (law, medicine, science and letters). 25 of these universities and almost all of the institutions of higher education were founded after the independence of the country. Even if some of them offer instruction in Arabic like areas of law and the economy, most of the other sectors as science and medicine continue to be provided in French and English. Among the most important universities, there are the University of Sciences and Technology Houari Boumediene, the University of Mentouri Constantine, and the University of Oran Es-Senia. The University of Abou Bekr Belkaïd in Tlemcen and University of Batna Hadj Lakhdar occupy the 26th and 45th row in Africa.
Four million graduates have been trained by the Algerian university in fifty years of existence. Certainly, the qualitative aspect suffered but it was the price to pay for the massification due to a thirst for knowledge. Since then, we have settled into fatality; because qualitatively, the results are not encouraging. Anomalies have been accumulated over time, which cause a long disintegration of the level of studies. Until recently, Algeria no longer meets the criteria for the Unesco baccalauréat. Moreover, the number of pupils turning towards the mathematics or technical mathematics baccalauréat (the royal road) is derisory. As of 2015, Algeria’s literacy rate is estimated to be around 80%, higher than the literacy rates of Morocco and Egypt, but lower than Libya’s literacy rate. Of the 2015 literacy rate, 87% of Algerian males are literate, compared to 73% of Algerian females.

Economy
Algeria’s economy remains dominated by the state, a legacy of the country’s socialist post-independence development model. In recent years the Algerian Government has halted the privatization of state-owned industries and imposed restrictions on imports and foreign involvement in its economy, pursuing an explicit import substitution policy.
Hydrocarbons have long been the backbone of the economy, accounting for roughly 30% of GDP, 60% of budget revenues, and nearly 95% of export earnings. Algeria has the 10th-largest reserves of natural gas in the world – including the 3rd-largest reserves of shale gas – and is the 6th-largest gas exporter. It ranks 16th in proven oil reserves. Hydrocarbon exports enabled Algeria to maintain macroeconomic stability, amass large foreign currency reserves, and maintain low external debt while global oil prices were high. With lower oil prices since 2014, Algeria’s foreign exchange reserves have declined by more than half and its oil stabilization fund has decreased from about $20 billion at the end of 2013 to about $7 billion in 2017, which is the statutory minimum.
The predominance of oil revenues explains the central role of the state in the Algerian economy. Even though foreign oil companies have come to play an important role in the exploration and production, the state has remained the intermediary in these ventures. At the same time, the exchange with the world market is very important at all levels of the economy. The overall liberalization of the economy in the 1990s has meant that the rules regarding foreign investment have been relaxed. The government looks for ways to stimulate foreign investment in the economy. At the same time, it has tried to strengthen the role of domestic capital through the obligation for foreign firms to enter into a partnership with one or more Algerian counterparts, who must have at least a 51-percent ownership. While the official channels are dominated by those who have the right political connections, the extensive black market offers a parallel import channel for the less privileged and creates a welcome avenue for the creation of jobs.
President BOUTEFLIKA announced in fall 2017 that Algeria intends to develop it is non-conventional energy resources. Algeria has struggled to develop non-hydrocarbon industries because of heavy regulation and an emphasis on state-driven growth. Algeria has not increased non-hydrocarbon exports, and hydrocarbon exports have declined because of field depletion and increased domestic demand.
Long-term economic challenges include diversifying the economy away from its reliance on hydrocarbon exports, bolstering the private sector, attracting foreign investment, and providing adequate jobs for younger Algerians. Despite these constraints, Algeria has important assets for further economic development. Its strategic location close to Europe makes it a potential supplier of solar energy, and there are considerable possibilities for international tourism. Algeria has a well-educated population, especially when its extensive migrant community is taken into account.
GDP (purchasing power parity):
$629.3 billion (2017 est.)
$620.2 billion (2016 est.)
$600.4 billion (2015 est.)
GDP (official exchange rate):
$175.5 billion (2017 est.)
GDP – real growth rate:
1.5% (2017 est.)
3.3% (2016 est.)
3.7% (2015 est.)
GDP – per capita (PPP):
$15,100 (2017 est.)
$15,200 (2016 est.)
$15,000 (2015 est.)
Gross national saving:
34.9% of GDP (2017 est.)
37.2% of GDP (2016 est.)
36.3% of GDP (2015 est.)
GDP – composition, by sector of origin:
agriculture: 13.2%
industry: 36.1%
services: 50.7% (2017 est.)
Agriculture – products:
wheat, barley, oats, grapes, olives, citrus, fruits; sheep, cattle
Industries:
petroleum, natural gas, light industries, mining, electrical, petrochemical, food processing
Population below poverty line:
23% (2006 est.)
Budget:
revenues: $52.08 billion
expenditures: $70.74 billion (2017 est.)


Agriculture
The agricultural sector contributes on average about 10 percent of Algeria’s GDP and employs at least 14 percent of the Algerian population. Algeria has about 8.4 million hectares of arable land representing roughly 3.5 percent of its total surface area. Algeria’s agriculture is mostly rain-fed and often suffers from drought over consecutive years. Only 12 percent of this arable land is irrigated. About 51 percent of the total arable land is dedicated to field crops, mostly cereals and pulses, 6 percent to arboriculture, and 3 percent to industrial crops. About 70 percent of agricultural farms are of small scale with less than 10 hectares, and 80 percent of these farms are individual farms. As in ancient times, grain is still the main product, together with citrus fruits and dates. After the war of independence and the departure of the colonists, the colonial agriculture system had largely collapsed.
Although more resources became available over the years, thanks to growing economic prosperity, the agricultural sector lagged far behind the growing industries and was unable to supply the Algerian urban population with sufficient basic foodstuffs. In order to close the gap between supply and demand, the country remained largely dependent on imports, which only aggravated the trade deficit. In recent years, the situation has improved; the Ministry of Agriculture even claims that over 70 percent of all food crops are grown domestically. Despite the modernization efforts, agriculture is still very dependent on rainfall, which may fluctuate strongly from year to year. Insufficient or inferior inputs, such as fertilizers and seeds, together with bureaucratic practices, produce less than optimal results.
The relative improvement in Algeria’s agricultural productivity in recent years is mainly attributed to an ambitious Agriculture Development Plan implemented in 2000 by the Ministry of Agriculture to boost agriculture development and production. In line with this program; the agricultural development strategy was re-oriented in August 2008 to reflect new policy priorities in several areas including intensification of agricultural production, revitalization of natural resources and improved consumption of water resources as well as food safety initiatives.
The government’s vision is to orient agriculture towards intensive models particularly in the grain sector and creates modern agricultural complexes to facilitate the use of public agricultural land. The Ministry of Agriculture has granted land to investors. The cultivation of this land would increase the arable land to 9 million hectares by 2020. Algeria continues to import about $9.33 billion in agricultural commodities and food annually and is one of the world’s largest importers of wheat ($2.39 billion) and dairy products ($1.16 billion). The European Union is Algeria’s major supplier, accounting for almost 45 percent of imports. The United States exports about $200 million in food and agricultural products to Algeria.
Algeria’s agricultural exports to the United States total less than $1 million, mainly dates. This is in spite of the agricultural policy strategy that is supposed to result in increased domestic production, Algeria is famous for the quality of its oasis-grown dates, which are the major export product, after oil and natural gas. The main market for the Deglet Nour variety, grown mainly in Algeria and Tunisia, is southern Europe.
Electricity access:
population without electricity: 400,000
electrification – total population: 99%
electrification – urban areas: 100%
electrification – rural areas: 97% (2016)
Electricity – production:
64.67 billion kWh (2015 est.)
Electricity – consumption:
53.44 billion kWh (2015 est.)
Electricity – exports:
641 million kWh (2015 est.)
Electricity – imports:
610 million kWh (2015 est.)
Electricity – installed generating capacity:
17.12 million kW (2015 est.)
Electricity – from fossil fuels:
97.9% of total installed capacity (2015 est.)
Electricity – from nuclear fuels:
0% of total installed capacity (2015 est.)
Telephones – fixed lines:
total subscriptions: 3,404,709
subscriptions per 100 inhabitants: 8(July 2016 est.)
Telephones – mobile cellular:
total: 47,041,321
subscriptions per 100 inhabitants: 115 (July 2016 est.)
Internet country code:
.dz
Internet users:
total: 17,291,463
percent of population: 42.9% (July 2016 est.)
Manufacturing and Industries
Algeria has struggled to develop industries outside hydrocarbons in part because of high costs and an inert state bureaucracy. The government’s efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector have done little to reduce high youth unemployment rates or to address housing shortages. The industrial areas surrounding major cities such as Algiers, Oran, and Annaba are home to huge refineries and petrochemical complexes and plants for the liquefication of natural gas that is transported in tankers to foreign markets.
Algerian industry has always been dominated by oil and natural gas in two ways. First, the hydrocarbon sector is by far the largest industrial sector. Second, the revenues generated by the export of oil, gas, and related products have been the main source of investment capital for other industries, along with huge loans from the international capital market that form a mortgage on those reserves. From the major production sites in the Sahara desert, oil and natural gas are transported to the Mediterranean coast.
As the main entity responsible for the oil and gas sector, the state oil company SONATRACH (Société Nationale pour la Recherche, la Production, le Transport, la Transformation, et la Commercialisation des Hydrocarbures, National Company for the Exploration, Production, Transport, Transformation, and Commercialization of Hydrocarbons) is often considered a state within the state. After its foundation in 1963, it grew in size and significance with the nationalization of foreign oil interests in the following decade. The 120,000-strong
workforce operates the entire production chain, from exploration to consumer sales. In the 1970s, the government invested billions of petrodollars in the construction of heavy industries, especially the steel industry, supplied by Algerian iron-ore deposits. Together with other basic industries (e.g., cement plants), steel mills were meant to be the basis of extensive industrial development and provide inputs to light industries producing consumer goods. This approach of ‘industrializing industries’ did not work out as planned, due in part to political factors inherent in the rentier economy. Many industries remained inefficient and appeared to be generators of jobs for the regime’s constituency of workers and managers and the bureaucracy at the ministries in charge.
Light industry is more diversified and has always involved greater private entrepreneurship. As with heavy industry, most factories are found near the main urban centers in the north, although the decentralization of the 1980s has also led to the creation of more light industry in the increasingly populous centres of the High Plateaux and some oasis towns. The light industrial sector comprises the processing of food and the manufacture of household appliances and some luxury items. In many cases, though, consumers prefer imported goods that bring higher social status.

Banking and Finance
Algeria’s banking sector is characterized by low intermediation and penetration rates, although both have increased dramatically in recent years thanks primarily to ample liquidity stemming from abundant hydrocarbons revenues. In light of the rapid decline in hydrocarbons receipts in late 2014, the authorities have accelerated implementation of planned reforms and announced new measures to empower the sector to finance broad-based economic development. In 2015 important steps were taken to integrate the very large informal economy into the formal financial system.
Today Algeria’s banks are seeking new revenue streams as they adapt to the demands of an evolving macroeconomic climate. Algeria’s capital markets offer considerable potential in light of the size of the country’s economy but have historically been fairly shallow. Few corporate stocks and bonds have traded on the market since it opened in 1998, and the last initial public offering (IPO) was in 2013. Trading has been comparatively light in recent years as investors await the listing of several state-owned companies to increase capitalization and breathe life back in the markets.
The insurance sector has grown more than five-fold since the 1990s, but it still remains small relative to the size of the economy. The market is characterized by low penetration and density of coverage and is dominated by non-life coverage, representing some 93% of premiums, with automotive lines alone accounting for half the sector’s revenues. Better efforts to raise public awareness, coupled with expanding networks of sales channels, can help the industry navigate the expected risks and challenges precipitated by the drop in oil prices and state spending. This chapter contains interviews with Mohammed Laksaci, Governor, Bank of Algeria; Boualem Djebbar, President, Professional Association of Banks and Financial Institutions, and President, Economic Interest Group; Mohamed Krim, Banque de Developpement Local; and Brahim Djamel Kassali, President, Algerian Union of Insurance and Reinsurance Companies; as well as a viewpoint from Adel Si-Bouekaz, Managing Director, Nomad Capital.
The Central Bank of Algeria, created in December 1962, was the sole bank of the issue at that time. Following the separation of the French and Algerian treasuries in late 1962, the Directorate of Treasury and Credit was established as the government’s fiscal agent. The state also established cooperative banks. It wasn’t until 1996 that private companies were permitted to set up money-changing shops following a directive issued by the Central Bank initiating open market operations. This opened a field previously restricted to state-owned banks. Bank base interest rates officially fell from 18.5 to 15% during 1996, according to the prime minister, Ahmed Ouyahia. In 1998, local commercial banks cut interest rates on loans to between 10% and 12.5%, down from a range of 18.5–23.5% in 1996. The Bank of Algeria’s primary method of financial control was to limit lending, and interest rate cuts were aimed at encouraging growth.
Foreign banks ceased operations after the nationalization of banks in 1963 and were absorbed by three government-owned banks including the Foreign Bank of Algeria, the National Bank of Algeria, and the People’s Credit of Algeria. There were also four government banks for financing economic development and a savings institution that offered housing loans. These included the Algerian Development Bank, the Agricultural Bank for Rural Development, and the Maghreb Bank for Investment and Commerce. In 1997, the banking industry of Algeria included one Central Bank (Banque d’Algerie), six state-owned banks, one public development bank and one private bank (Union Bank, concentrating on merchant banking since 1995). In 1998, five new private banks opened, including one US-based bank.
The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate is commonly known as M1—were equal to $16.0 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $26.9 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 3.35%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 6%.
Tourism
The tourism sector has been sidelined since the country’s espousal of socialism. In the 1990s, the civil war dealt the already fragile sector a heavy blow. Battered by a sharp decline in its international reserves, Algeria made of tourism a key sector to relieve its economy from an acute dependency on oil revenues. However, little is done to boost the contribution of tourism in GDP, which remains limited to 1.4% in 2016 with most tourists being Algerian expatriates returning to visit their homeland.
As of 2008, authorities made of tourism a “national imperative” and struggled to improve the country’s image with the goal to expand from 1.74 million tourists in 2007 to 20 million tourists by 2025. With over 1600 km of Mediterranean coastline, important cultural and historical sites, and the vast desert, Algeria is endowed with a potential that could enable it to be a leading tourist destination. Nevertheless, the country is falling short of establishing a reputation as a tourist-friendly state as it continues to be perceived as lacking tourist infrastructure coupled with serious security concerns.
The lack of incentives for private foreign and local investors is another impediment. In a country where foreign investors are only allowed to own 49% of shares, it is hard to lure global tourism operators to the Algerian market. Algeria’s visa regime has long been an obstacle to attracting foreigners to the country. Algiers imposes nearly visas on all foreigners. This burdensome process further undermines Algeria’s competitiveness globally. By imposing strict visa processes, Algeria is sending the world a message that it does not want tourists. Some analysts deem that Algeria is only interested in domestic tourism since it cannot protect foreign tourists.
Algeria is the largest country on the African continent and the 10th largest country in terms of total area. Located in North Africa, one of the main tourist attractions is the Sahara, the second largest desert in the world. Some sand dunes can reach 180 meters in height. This State has been a member of the World Tourism Organization since 1976, but tourism in Algeria report of the World Tourism Organization published in 2014, Algeria is the 4th tourist destination in Africa in 2013 with 2,7 million foreign tourists, and ranks 111st on the international tourism scene, according to the London-based World Tourism and Travel Council (WTTC). The tourism sector in Algeria accounts for 3.9% of the volume of exports, 9.5% of the productive investment rate and 8.1% of the Gross Domestic Product.
Beni Hammad Fort also called Al Qal’a of Beni Hammad is a fortified palatine city in Algeria. Now in ruins, in the 11th century, it served as the first capital of the Hammadid dynasty.
Djémila is the Beautiful one, Latin: Cuicul or Curriculum), formerly Cuicul is a small mountain village in Algeria, near the northern coast east of Algiers, where some of the best preserved Berbero-Roman ruins in North Africa are found.
Casbah of Algiers is specifically the citadel of Algiers in Algeria and the traditional quarter clustered around it. More generally, a kasbah is the walled citadel of many North African cities and towns.
M’Zab Valley, or Mzab, (Mozabite Aghlan, is a natural region of the northern Sahara Desert in Ghardaïa Province, Algeria. It is located 600 km (370 mi) south of Algiers and there are approximately 360,000 inhabitants.
Other sites includes Timgad, Tipasa, Tassili n’Ajjer, Djamaâ El Djazaïr, Ketchaoua Mosque, Notre-Dame d’Afrique, and more.