The North Africa Country Series: People’s Democratic Republic of Algeria

As part of its initiative to introduce non-conventional markets to Pakistani businesses, the Pakistan Business Council (PBC), in 2019, has initiated the North-Africa Country Series. The North Africa Country Series features four countries; Algeria, Egypt, Morocco and Tunisia. This profile of the People’s Democratic Republic of Algeria (Algeria) is the first in the series.

Bordered by Mali, Morocco, and Tunisia, Algeria enjoys proximity with France, Italy and Spain in Europe. Algeria was one of the first countries to be conquered by the Muslim Arabs in the 8th century. The Ottoman Turks replaced the local Arab rulers in the 1500s before losing Algeria to the French colonists three hundred years later. The French ruled Algeria as a colony from 1830 to 1962, when wide-spread resentment among the locals and the European settlers forced the French authorities to grant independence to the locals.

For the past few decades, Algeria has been mostly dependent on its hydrocarbon resources and these in 2007 accounted for 25% of the GDP and 95% of export receipts. However, the oil-price shock of 2014, compelled the Algerian policy-makers to rethink their policies and to consider diversification of the economy. As of 2017, Algeria had a current GDP of USD 167.56 billion and a GDP per capita of USD 4,123.39 both of which have decreased in absolute terms. Low inflows of oil income and FDI coupled with a 13.6% unemployment and a 5.6% inflation rate have resulted in a general slow-down of the Algerian economy.

Algeria's Trade Overview

Algeria’s trade balance, as shown in the figure above, has worsened in the last five years, from having a surplus of over USD 11.0 billion in 2013, Algeria recorded a trade deficit of USD 10.9 billion in 2017. The reason for the worsening of the BoT is primarily the relatively sharper decline in exports whereas imports declined gradually. While oil dominates exports, imports comprise mostly of machinery and food products which are relatively inelastic.

Italy, France and Spain are the major export destinations for Algerian goods and, all three countries primarily import fossil fuels. On the import side, we find that the USD 46.05 billion worth of imports in 2017, were dominated by imports from China followed by imports from France, Germany & Italy. In 2017, Algeria’s imports were dominated by wheat, sugar cane and motor cars.

Algeria’s trade with Pakistan is not very significant. The 2017 Algeria’s exports to Pakistan were a mere USD 80,000 against a potential of USD 132.25 million whereas imports were valued at USD 24.9 million with an untapped potential of USD 849.12 million. Currently, Pakistan’s exports to Algeria comprise of articles of apparel, cereals and other textile products whereas zinc and paper products were the major imports from Algeria.

The PBC is a private sector not-for- profit advocacy platform set up in 2005 by 14 (now 78) of Pakistan’s largest businesses. PBC’s research based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about PBC, its members, objectives and activities can be found on its website: