After several postponements, the Algerian state sets a new deadline for opening the capital of public banks to foreign investors. The operation announced for next year could consolidate and strengthen the financial structure of several banking establishments.
From 2022, Algerian banks with public capital will open their capital to foreign investors, assured Aïmene Benabderrahmane (photo), Algerian Prime Minister and Minister of Finance, on December 5, on the sidelines of the National Conference on Industrial Recovery.
According to Algérie-eco.com, which relays the information, the announced measure will be implemented as part of a comprehensive review of the governance system of public enterprises. Among other things, this will result in the IPO of several public companies.
This project is not new. Initiatives in this direction had already been announced and repeatedly postponed. In December 2020, Mr. Benabderrahmane announced for 2021, the opening of the capital of two public banks through the Algiers Stock Exchange. No follow-up has been given to this project as of this date.
More recently, last August, President Tebboune, at a cabinet meeting, instructed his government to open up the capital of public companies, including banks, to foreign investors. This measure has so far not been successful.
However, this financial operation consisting in welcoming new foreign investors in the round table of the six public banks of the country will bring much more than capital to these establishments. To the extent that it is carried out through the Algiers Stock Exchange, it will help boost this financial center, which remains one of the least attractive on the continent. Last April, the Algerian financial market regulator indicated that the IPO of banks will open up promising prospects for the Algiers Stock Exchange.
In 2020, the decline in hydrocarbon revenues led to a sharp decline in Algeria’s bank liquidity, the World Bank reported in its Algerian economic bulletin, made public in spring 2021. According to the institution, bank deposits decreased between May and October 2020.
This situation was aggravated by the withdrawal of savings funds made by depositors from Algeria Post, as well as by the withdrawal by the Treasury of liquidity from public enterprises, in order to finance the overall budget deficit.