Stagnation or Growth? Algeria’s development pathway to 2040

The document examines Algeria's struggle to attract foreign direct investment compared to other middle-income countries, citing regulatory hurdles and the dominance of state-owned enterprises. It notes a shift in investment sources from Europe toward China and Gulf investors, while highlighting the positive impact of remittances on poverty and inequality reduction.

• Algeria attracts significantly lower levels of foreign direct investment (FDI) as a percentage of GDP than the averages for upper-middle-income countries (UMICs) and other lower-middle-income countries (OLMICs), with the stock of investment being nearly three times lower than the UMIC average and only 42% of the OLMIC average.
• Investment patterns have shifted; while FDI from Europe has declined since the Arab Spring, China has become the largest investor, primarily in mining and construction, and Gulf investors have shown increased interest.
• Significant barriers to investment include a low ranking in the World Bank's Doing Business 2020 (157th out of 190), corruption, protectionism, bureaucracy, and the prevalence of state-owned enterprises (SOEs) that lack efficiency and accountability.
• The Complementary Finance Law of 2020 introduced reforms to attract investment by removing the 51/49 domestic ownership rule for foreign businesses, cutting corporate taxes in specific locations, and providing tax exemptions for exporting projects.
• Remittance inflows, valued at approximately €1.6 billion in 2018 (1% of GDP), contribute to poverty reduction and have reduced regional Gini indices by nearly 4% in two Algerian regions, particularly through foreign pensions.

APA

Cilliers, J., & Kwasi, S. (2022). Stagnation or Growth? Algeria’s development pathway to 2040. Institute for Security Studies. https://futures.issafrica.org/special-reports/guide.pdf?report=country/algeria&topic=11-foreign

Chicago

Cilliers, Jakkie, and Stellah Kwasi. Stagnation or Growth? Algeria’s development pathway to 2040. Institute for Security Studies, 2022. https://futures.issafrica.org/special-reports/guide.pdf?report=country/algeria&topic=11-foreign.

Wikipedia

{{cite report |last1=Cilliers |first1=Jakkie |last2=Kwasi |first2=Stellah |title=Stagnation or Growth? Algeria’s development pathway to 2040 |publisher=Institute for Security Studies |date=28 June 2022 |url=https://futures.issafrica.org/special-reports/guide.pdf?report=country/algeria&topic=11-foreign |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cilliers2022stagnation, author = {Cilliers, Jakkie and Kwasi, Stellah}, title = {{Stagnation or Growth? Algeria’s development pathway to 2040}}, institution = {Institute for Security Studies}, year = {2022}, month = jun, url = {https://futures.issafrica.org/special-reports/guide.pdf?report=country/algeria&topic=11-foreign}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }