Investment & Technology Office (ITPO), TOKYOAlgeria
Economic environment andbusiness opportunities
Lies Kerrar

Forum des Chefs d’Entreprises:Ø Algerian Business Owners AssociationØ Represents major algerian enterprisesØ Think tank focused on the developementof algerian economyØ Advocacy for public policy that stimulate
business development, local value
creation and competivityØ Internationnal presence with theparthership with business associations of
the main Algeria business partners
Ø Recent position: 50 key reforms for adiversified economy

Investment & Technology Office (ITPO), TOKYOHumilis FinanceCorporateFinanceMergers &Acquisitions

ProjectFinanceBusinessvaluation

Private Equity

Corporate
GovernanceCorporate
SocialResponsibility

Investment & Technology Office (ITPO), TOKYOITPO Tokyo, Local Advisors Program

Investment & Technology Office (ITPO), TOKYO§ Mandate to promote and facilitate Japanese companies responsible
investments§ Local presence with local advisors in Algeria, Mozambique andEthiopia§ Available for providing local market knowledge and local facilitation§ Contact: l.kerrar@unido.org

Investment & Technology Office (ITPO), TOKYO

Brief Algeria Economic picture$4 000Algeria$3 000Tunisia$2 000
Middle East & NorthAfrica (developing only)$1 000§ Young population : 68% of the 36
million population is less than 35years old§ This represents a chalenge forjob creation§ One of the most advanced
education system and healthcoverage system in Africa

Investment & Technology Office (ITPO), TOKYO

2010

2009

2008

2007

2006

2005

2004

2003

$-2002§ A demographic economic
endowment:

Arab World$5 0002001§ Abundant natural resources$6 0002000§ Country that has almost noforeign debt and Foreign
Currency Reserves of 190
USD billions (4 yearsimports)

GDP per Capita, current USD

MoroccoA decade of GDP Growth that has been resilient tofinancial crisis : Growth disconnected from world trends•••

GDP growth has been above 2%
for the last 10 years.
Non Hydrocarbon Growth of
5.9% in 2013
Accounting for approximately
40-45% of the country GDP and
98% of its exports, thehydrocarbon sector remains the“engine” of the Algerian
economy (provide government
financing and infrastructure
financing).
Government recently announced
objective: 7% GDP growth by2019(Source: WB Database)

8,06,96,04,74,0%•GDP Growth Algeria Vs World(%)

5,2

5,1
3,0

2,62,02,02,4Algeria

2,1World(2,0)

2001 2002 2003 2004 2005 2006 2007 2008 2009

(4,0)

Non-Hydrocarbon GDP Growth of 5.9% in 2013
7,1%

8,0%

4,0%

5,9%

4,9%

6,0%

2,4%

3,3%

2,7%

2,0%
0,0%

2011

GDP Growth

Investment & Technology Office (ITPO), TOKYO

2012

2013

Non Hydrocarbon GDP GrowthGrowth was led by the state’s investment package
Growth was led by the state’s
investment package as thegovernment is trying to lessen
economy reliance on hydrocarbons.

State	   Investment	  Plan	  2010-­‐2014
Health	  SantéEducation	  Education

University	  &	  Research	  Enseignement	  supérieur
The released spending focusedon:

Rural	  Development	  •developing non-hydrocarbon Dévelopment	  ruralYouth	  &	  Sport	  sectors,
Jeunesse	  et	  sport•

improving infrastructure,

Ressources	  en	  eau•

expanding local skills base,

Travaux	  publics•

and supporting small andmedium size enterprises.

Water	  Public	  Work	  Housing	  Habitat	  -­‐	  10	  000 	  20	  000 	  30	  000 	  40	  000 	  50	  000 	  60	  000

USD	  million	  The challenge: Economic diversification in order to create sufficientjobs for the growing young population

Investment & Technology Office (ITPO), TOKYONew government plan key announced objectives (2014-2019) 1/2§ Economy diversification in order to reach a 7% GDP growth rate§ Business Environment Reforms (reduction of the procedures, delays
and costs for doing business)§ Legal system reform and anti-corruption enforcement§ Tourism development strategy§ Government spending efficiency monitoring and review of thesubsidies§ Local and Foreign Investment promotion: a review of the investment
rules is currently under review (in order to enhance attractiveness)§ Financial system reforms

Investment & Technology Office (ITPO), TOKYONew government plan key announced objectives (2014-2019) 2/2§ Infrastructure investment should continue with a higher focus onefficiency and PPP could be considered for some sectors§ SMEs development and local subcontracting policy for key industrial
sectors as automotive parts, health & construction.
§ Promotion of developing local supplying for energy, water and agrifood industries§ Mining resources development and related industries (Fertlizers andSteel). New development for Zinc, baryte and Gold§ Fishing development

Investment & Technology Office (ITPO), TOKYONew government plan key announced objectives(2014-2019) for Energy§ Intensification of exploration and development for conventionalreserves§ New production start-ups for conventional Oil and Gas§ Testing activities for non-conventional hydrocarbons (shale gas)§ 14 new pipes projects§ 6 new refineries§ Electricity: doubling the electricity production capacity by 2017
§ Renewable energy development (mainly solar)§ Petrochemical industry development

Investment & Technology Office (ITPO), TOKYO

Business and investment opportunities

EnergyPetrochemicals

MiningConstructionmaterials

Engineering

Health(pharmaceuticals& medicalequipment)

Consumers
products

Hospitality

Financialservices

Investment & Technology Office (ITPO), TOKYOCar market: above 500 000 vehicules per year with a 18%
yearly growthCompounded Annual Growth: 18%

Car imports
700 000

605 312600 000

554 269

500 000
390 140400 000
285 337

+55%

+37%

200 000
100 000-8%

300 000

2010

2011

2012

Investment & Technology Office (ITPO), TOKYO2013

Financial Services: Attractive Fundamentals
Reforms would create opportunities•The financial systems has not been
affected by the financial crisis…
But the financial intermediation is still
not performing: 40% of deposit are notconverted into loans to the economy•

High level of liquidity on the market•

The banking system is still focused onoffering trade services•

Algeria
Tunisia
MoroccoLebanonJordanEgypt-30%-20%-10%0%10%20%30%

Bank Credits vs Deposits

Great development opportunities:•Banking services

6 000

•

Electronic banking

5 000

•

Mobile banking•

Under developped stock market•

Professionnal asset management

DZD Billions•Banks' Return on Equity : Selected
MENA Markets (2008)

4 000
3 000
2 000
1 000Deposits-Credits
2 001

Investment & Technology Office (ITPO), TOKYO

2 009

40%

Algeria investment rules§ 51/49 rule: Foreign Shareholding in Algerian companies limited to 49%
Ø Specific corporate governance should be organized in line with strategic objectives
Ø Explore the wide range of local shareholding possibilities:§ Equity funds§ Local IPO§ Public companies§ Strategic local investors§ Consider M&A, JVs, Partnership options for entering the market§ The Business environnement is challenging: 4 basic rules for sucess§ Prepare: Do market research and monitor market opportunities in your sector.
§ Plan for the long term: It will take time to get results.
§ Patience: The business environment is different.

§ Persevere: If you are considering this market for the right reason, you should success.

Investment & Technology Office (ITPO), TOKYO

Questions and Contact

Investment & Technology Office (ITPO), TOKYO