Algeria open for business
Investors from Saudi Arabia, Kuwait and Egypt are stealing a march on most of the rest of the world, providing between them almost half of Algeria’s entire foreign direct investment (FDI) in 2005.
The achievements—and profits—racked up by these three countries are significant. The Egyptian conglomerate Orascom in telecommunications (Djezzy), construction and building materials (Orascom Construction), as well as their subsidiary Algerian Cement Company for cement, have foreign investors eyeing the country’s potential. The other notable foreign success stories include Kuwaiti firm Watanya, which owns local telecommunications player Nedjma, and Saudi Arabian company Sidar, which is involved in construction and real estate.
To spread the message that Algeria is open for business—and specifically geared to Arab states—Algeria will hold the 10th Congress of the Union of Arab Businessmen in Algiers on November 18-19. One of the other main objectives of this congress, which is estimated to attract over a thousand Arab businessmen, is to deliver tangible investment projects to further Algeria’s ongoing development.
This event, to be staged for the first time in Algeria, is backed by the office of the president of Algeria and the prime minister. Several chambers of commerce, notably Abu Dhabi and Dubai, as well as the Employer’s Association in Egypt have teamed up to promote and assist this international event, one of the largest of its kind for the Arab business world.
Omar Ramdane, the president of Algeria’s Managers Forum (FCE), said many Arab businessmen ignore the structural and economic changes in Algeria in the past few years. Indeed, in the last Investment Code released last month, Algeria has proposed more tax cuts and considerable financial incentives for potential investors across all sectors.
Lack of knowledge, lack of investment
The secretary-general of the Union of Arab Businessmen, Ali Youssef, a Jordanian, agreed. The lack of foreign investment in Algeria is principally due to the paucity of economic information, but also certain archaic and preconceived ideas which have persisted about Algeria, he said.
However, Arab investors’ interest in Algeria has grown in recent years, and not only as a result of the marketing and promotional efforts from different players. Brahim Benabdeslesm, the vice-president of the FCE and president of the commission overseeing the congress, said it is the successes of foreign investors in Algeria that is a key factor in the country’s rising international profile.
Massive hotel expansion
UAE group Emaar, one of the largest property development firms in the world, is on the forefront of several mega-projects aimed at redesigning and developing plots in Algiers and its surrounding areas. Next year, Emaar plans to invest in high-end, high-capacity hotel projects, with more than 20,000 beds. Sidar, already present on the market, is also seeking to join the fray, with plans for hotel and tourist developments with more than 5,000 beds.
As of late, Algeria has followed the path of neighboring Morocco and Tunisia in becoming a land of opportunity for Arab investors. The country’s geopolitical importance and large, underdeveloped market make it attractive to regional firms looking to expand their international presence. In addition, the ongoing liberalization of state-owned companies and the strengthening of economic and diplomatic ties with other regions of the globe, Algeria is truly becoming a focal point for foreign investment in North Africa, particularly from sources in the Middle East.
In the recent World Economic Forum’s influential Global Competitiveness Report, Algeria placed 76th, up six spots over 2005. As the report also highlighted though, the country’s major weaknesses remain the financial services sector, the general business climate and the heavy bureaucracy, which slow the pace of economic reform.
