Algeria has launched the latest wave of its extensive privatization program while the country’s unions have threatened to try to hold back the rising tide of sell-offs.
On September 1, the industry and investment promotion ministry launched the initial call for tenders for 13 state-owned enterprises. In a statement accompanying the call, the ministry said at least 50% of the capital of each of the companies being put on the block would be on offer to private bidders.
This round of privatizations mainly focuses on the state divesting itself of manufacturing firms, with white goods producer Enien; Electro-Industries, which makes electric motors; and battery producer Enpec all being put up for sale. Also listed for privatization are road construction companies EVSM and Sonatro; chemical manufacturers Enasel, Alphyt and Aldar; and Alfel, Alfet and Alfon, all operating in the metals sector.
To date, the state has sold off well over half of the enterprises slated for privatization, with 430 enterprises having gone under the hammer so far, and another 300 listed as being eligible for transfer to the private sector.
One of the jewels in the crown of the privatization program is Algérie Télécom, with the state planning to sell off between 35% and 51% of the company before the end of this year. Among the 45 potential bidders who Post, Media and Information Technologies Minister Boudjemaa Haichour said have expressed interest in the sale are Portugal Telecom, Saudi Telecom and British Telecom, with the privatization tipped to bring in around $3 billion.
Big-tickets items up for privatization
Another of the big-ticket items being offered by the state is the bank Crédit Populaire d’Algérie (CPA). On September 4, Finance Minister Karim Djoudi said technical submissions by six foreign banks would be assessed in early October, followed by a final decision on which of the bidders would be allowed to take part in the auction for the 51% stake in CPA.
With some 70,000 clients and around 130 branches, CPA is one of Algeria’s larger banks in a market that is still dominated by the state, which accounts for 95% of bank assets and loan portfolios.
the state has sold off well over half of the enterprises slated for privatization
Algeria’s banking industry is one that has so far been little touched by the privatization program, but the planned sale of a controlling interest in CPA indicates that the government has heeded calls for the country’s financial sector to be opened up and improved.
BNP Paribas, Société Générale, Crédit Agricole and Natexis, all of France; US-based Citibank, and Spain’s Banco Santander have all been short-listed for the CPA sale, though the total number is expected to be whittled down in the technical assessment process, with the final sale expected to take place before the end of the year.
Yet another state enterprise attracting international interest is the state-owned tobacco company Société Nationale des Tabacs et Allumettes (SNTA), with British American Tobacco and Altadis reported to have sought details of the firm and any planned sale.
However, Algeria’s privatization program is not without its critics. Many have described the sell-off of state enterprises as being carried out with undue haste and have claimed that not enough consideration has been given to employees. Another criticism has been the large numbers of Algerian firms that are winding up in foreign hands.
Sell-offs protested by unions
In July, the umbrella group representing workers on the country’s docks and in its maritime sector, Coordination Nationale des Syndicats des Ports d’Algérie (CNSPA), said the proposed sale of a 50% stake in the container terminal at the port of Djen Djen to Dubai Ports World was contrary to national interests. The waterfront unions have threatened strike action if the government continues holding talks with the Emirati firm. Discussions with DPW are apparently continuing with the government, with the end of the year indicated as the date for concluding the deal.
Other unions have also flagged industrial action in other sectors of the economy, to voice opposition to the privatization program and to protect the interests of their members.
However, while strikes and calls from Algeria’s unions to reverse the privatization program may dig a few potholes in the road of the state’s plans to sell off more enterprises, they are unlikely to sway the government from its path.
