Trading with Algeria

Main Industry Sectors

12% of Algeria’s GDP is contributed by the agriculture sector, which provides employment for 20% of the active population. Wheat, barley, oats, citrus fruit, wine grapes, olives, tobacco and dates are some of the significant crops being produced. Cork and livestock farming are also prominent products of the agricultural sector.

55% of Algeria’s GDP is contributed by the industry sector, which employs 25% of the active population. The main goods that the manufacturing sector produces are textile, metals, construction materials, chemical products and some industrial food processing. Almost all of the country’s export income is contributed by oil and gas, which is not surprising since Algeria is the 2nd largest exporter of gas in the world, ranking 18th for petroleum reserves and 10th for gas reserves.

33% of Algeria’s GDP is contributed by the service sector, which employs more than 50% of the workforce.

Trade Overview

With over 28% of imports coming from France, it is Algeria’s biggest trading partner. The trade with France is an important factor for the Algerian economy. France, however, is dependent on Algerian oil and natural gas, as the North African country is one of the main suppliers.

That being said, Algeria’s main exports partners are the United States, Italy, Spain, France and Canada, while its main import partners are France, China, Italy, Spain and Germany.

Algeria signed an Association Agreement in December, 2012, following the framework of the Euromed partnership. The agreement established guidelines for all areas of trade between both sides and trade volume increases of 9.3% were observed between 2003 and 2009. 98% of Algerian export to the EU in 2009 was of oil and natural gas, Algeria ranking as the EU’s fifth biggest supplier of energy products.

Algeria’s Balance of Trade averaged 6.85 billion USD from 1992 to 2011, with an all time high of 34 Billion USD in December of 2006 and low of -2.34 Billion USD in June of 2009.

Positive Points

  • Low cost of energy products like natural gas, fuel and electricity. Compared to the European average, the price of industrial gas in Algeria is 22 times lower, while electricity is 6 times cheaper.
  • Skilled and low cost workforce.
  • Algeria is very close to Europe and allows relocation of many different business activities.

Negative Points

  • Administrative procedures can prove to be slow.
  • Complex legislation and tax law.
  • It can prove difficult to acquire industrial property.