Supported by dynamic oil exports, the Algerian economy enjoyed a certain stability until 2014. Many years of weak investments, mismanagement and even corruption have put the country in a critical situation.
In an interview with local media, the Minister in charge of Economic Projections, Cherif Belmihoub, said that the country’s current economic situation is so dire that Algeria could cease to be an exporter of crude within ten years. coming years. In 2020, the global volume of oil and gas exports reached 82.2 million tonnes of oil equivalent, valued at $ 20 billion.
This represents a decrease of 40% and 11% respectively compared to 2019. While this situation is largely linked to the onset of the coronavirus pandemic, the evil runs deeper. The country is struggling to maintain its normal levels of oil and gas deliveries due to rising domestic demand, while the lack of investment in exploration does not allow a renewal of reserves.
This leaves less and less margins for export. It should be noted that even the recent improvement in the barrel of Brent to more than $ 60 is still insufficient for the country to rebalance its budget, given that it needs a barrel at $ 135 to reach its budgetary breakeven point.
According to sources familiar with the matter, the country is considering calling on the IMF or foreign investors to obtain the necessary liquidity for the further development of its oil operations.
Oil and gas account for 95% of the country’s exports and the sale of fuels alone accounts for 60% of the financing share of the national budget.
Source Ecofin Agency