Algeria at a glance
Full Name: People’s Democratic Republic of Algeria
Capital: Algiers
Area: 2,381,740 square kilometres
Population(m):  37.9 (2013)
Head of state: President Abdelaziz Bouteflika (since April 1999)
Currency:  Dinar
Religions: Sunni Muslim (state religion) 99 per cent; Christian/Jewish 1 per cent
Languages: Arabic (official); French; Berber dialects
International organisations: UN, African Union, Arab League, Arab Maghreb Union, Opec, IMF, WTO (observer), IAEA

The second largest country in Africa, the People’s Democratic Republic of Algeria is bordered by Tunisia in the northeast, Libya in the east, Niger in the southeast, Mali in the southwest, Mauritania and the Western Sahara in the west and Morocco in the northwest.

Its name derives from El-Djazair, the Arabic name of the capital Algiers, meaning ‘the islands’. The name refers to the four islands that lay off the city’s coast until they were incorporated into the mainland in 1525.

The vast majority of the population is concentrated in towns near the Mediterranean coast, the largest towns being Algiers (with a population of about 3 million), Oran (2 million) and Constantine (750,000). The larger part of the country, south of the Atlas Mountains, is covered by the Sahara Desert.

Government

Algeria is a republic with a socialist legal system based on French and Islamic law. Most executive power is invested in the president, who is elected by popular vote for a five-year term. Voting is by universal suffrage for all those aged 18 or more. All ministers, including the prime minister, are appointed by the president.

It has a bicameral legislature consisting of the National People’s Assembly (lower house) and Council of Nations (upper house). Members are elected to the assembly by popular vote to serve five-year terms. One third of members of the council are appointed by the president and two-thirds indirectly by the electorate to serve six-year terms. Half of the council members are renewed every three years.

Last presidential election: April 2009

Next election: 2014

Last elections to the National People’s Assembly: 17 May 2007

Next elections: 2012

Last elections to the Council of Nations: 2009

Next elections: 2012 (Half the Council of Nations renewed every three years).

Click here for government ministries information

Recent history & politics

Until it gained independence on 5 July 1962, Algeria was a French colony, and officially part of France from the late nineteenth century until the collapse of the fourth republic in 1958. The French invaded Algiers in 1830, but the violent conquest of the country, which resulted in the disappearance of about a third of its population, was not completed until the early 1900s when the last Tuareg (Berbers) were conquered. The population voted overwhelmingly in favour of independence in a plebiscite that ended the Algerian war of independence, an eight-year guerrilla campaign begun by the National Liberation Front (FLN) in 1954.

The country’s first president, FLN leader Ahmed Ben Balla, was overthrown by former ally and defence minister Houari Boumedienne in 1965. Boumedienne was heavily reliant on the army and reduced the country’s only political party to a largely symbolic role. Opposition parties were officially outlawed and state media control cemented in the 1976 constitution, while agriculture was collectivised and oil extraction facilities were nationalised as a massive industrialisation drive was launched.

Boumedienne was succeeded in 1978 by Chadli Bendjedid and the socialist autocracy became increasingly bureaucratic. Left-wing and Islamist opposition to the regime grew and mass protests in autumn 1988 resulted in the end of one-party rule. But when the first round of the country’s first elections, in December 1991, brought victory for the Islamic Salvation Front (FIS), the military intervened and the elections were cancelled. Bendjedid was forced to resign, and in March 1997 all parties based on religion were banned.

A bloody civil war between Islamists and security forces from 1992 to 2002 resulted in the deaths of more than 150,000 people in what became known as the ‘black decade’. Elections resumed in 1995, and after 1998 the violence began to wane. After a series of short-term military leaders, President Bouteflika, running as an independent, was elected to power in April 1999.

Economy

Algeria’s economy is based overwhelmingly on oil and gas. The hydrocarbons sector accounts for about 60 per cent of budget revenues, 30 per cent of gross domestic product (GDP) and more than 95 per cent of export earnings. Economic growth is strong, at around 3 per cent a year, and GDP was about $100 billion in 2006. Hydrocarbons earnings have enabled Algeria to accumulate more than $90 billion of foreign currency reserves. In 2006, repayments to its London Club and Paris Club creditors reduced Algeria’s external debt to less than 10 per cent of GDP. The medium term outlook is good, with continued high oil earnings expected to underpin real growth in GDP of 3-4 per cent a year for the next five years.

There are serious weaknesses in the economy, however. The jobless rate in 2006 was about 16 per cent and for the under-30s it is estimated to be more than double that. The country’s industrial base is poorly developed and its huge earnings from oil and gas have provided little incentive to accelerate a sluggish economic diversification programme. About 1,200 companies are tabled to be privatised in some way and some form of private investment has been introduced to about 300 firms. But many larger state institutions, such as oil giant Sonatrach and state-energy company Sonelgaz, have been excluded from the process due to their strategic value, while plans to sell off Air Algerie, Algerie Telecom and state-owned cement companies have stalled.

The banking sector is held back by its domination by relatively inefficient state-owned banks, which account for 85 per cent of the market. A number of foreign banks have applied for licences to operate in the country, but the market for international finance is weak, with Algiers preferring to fund projects either with equity or debt raised from state banks. The first privatisation of a state-owned bank, though, is under way. Six banks are prequalified to bid for a majority stake in Credit Populaire d’Algerie and the sale of a stake in two further state banks is also planned.

While economic diversification has been slow, Algiers has committed to spend $60 billion in the development of basic infrastructure under the 2005-09 Complementary Programme for the Support of Economic Growth (PCSC) and could invest up to $100 billion in the scheme. It includes the erection of 1 million low-cost houses, the upgrade and expansion of the Algiers metro system and the construction of 1,200-kilometre East-West motorway, which will link the border with Morocco in the west to that with Tunisia in the east.

Oil & gas

Hydrocarbons are the backbone of the country’s economy, accounting for some 95 per cent of export earnings. In 2009, Algeria accounted for about 2 per cent of the total crude produced globally. It has oil reserves estimated at 12.2 billion barrels or 0.9 per cent of the world total. Its gas endowment is much richer, at 159.1 trillion cubic feet, some 2.4 per cent of global gas reserves. But mismanagement has prevented Algeria hydrocarbons sector from living up to its potential in recent times and has also delayed much needed investment in new infrastructure.

Having built the world’s first liquefaction unit and begun liquefied natural gas (LNG) exports in 1964, Algeria has long dominated the European LNG market. Its shipments in 2008 totalled about 15 billion cubic metres (cm). Algeria has an export capacity of about 42 billion cubic metres a year (cm/y) through its Maghreb-Europe and Transmed pipelines.

In 2004, Algeria set itself a target of increasing its gas exports to 85 billion cm/y by 2010. But the date has repeatedly been pushed back due to a combination of robust growth in domestic demand, technical problems that impeded production increases from its gas fields and an accident in 2004 that took an LNG facility out of service. Last year, Algeria’s combined pipeline and LNG exports totalled 60 billion cubic metres. It now hopes to achieve the 85 billion-cm/y target by 2013.

To facilitate this boost in output, and to meet local demand, an intensive programme to extend the internal transmission and distribution pipelines is under way in the country. But Algeria is also hoping to implement a joint project that would involve Nigerian gas being piped into Europe through its export network.

Nigeria has the largest gas reserves on the African continent, estimated at 5.2 trillion cm. The planned $10bn Trans-Saharan pipeline would span 4,100 kilometres, starting from Warri in Nigeria, passing through Niger and then connecting with the Algerian gas export infrastructure at Hassi R’Mel.

The project is currently being studied, but it is proposed that the pipeline would have a capacity of 20-30 billion cm/y and would be completed by 2016.

Algeria average daily crude oil production
Year Thousand barrels a day
1960 181.1
1970 1,029.10
1980 1,019.90
1990 783.5
2000 796
2009 1,216
Source: Opec

Power

Demand for power in Algeria is growing at a rate of 6.7 per cent a year, according to state-energy company Sonelgaz.

Sonelgaz forecasts that peak power demand will reach 12,410MW by 2017, or as much as 15,000MW under a high case scenario. To ensure enough capacity to meet this demand, Sonelgaz’s subsidiary, La Compagnie de l’Engineering de l’Electricite et du Gaz (CEEG), is planning to build an additional 4,000MW of generating capacity between 2012-17.

Algeria power fact file, 2009
Installed generating capacity (MW) 11,324
Peak power demand (MW) 7,718
Growth in peak power demand (%) 7
Reserve power margin (%) 32
Largest generator Sonelgaz 
Number of power customers (million) 6.8
Number of IPPs/IWPPs concluded 2
Additional capacity requirement by 2019 (MW) 6,000
Estimated cost of required capacity ($bn) 7.2
IPP=Independent power project; IWPP=Independent water and power project. Source: MEED Insight