Algeria's Strategic Move in the African Free Trade Zone
Algeria has officially joined the African Free Trade Area (AFCFTA) as of November 1, 2023, marking a significant step towards enhancing its economic landscape. This agreement, which includes 54 African nations and represents a consumer market of over 1.3 billion people with a combined GDP of approximately $3.4 trillion, aims to eliminate trade barriers and boost continental income by an estimated $450 billion by 2035.
In 2023, Algeria's foreign trade with African nations reached $4.6 billion, reflecting an impressive growth rate of over 18% annually. The country exported $2.7 billion worth of goods while importing $1.87 billion. With the government targeting $30 billion in non-hydrocarbon exports by 2030, the AFCFTA presents a vital opportunity for Algeria to diversify its economy, currently heavily reliant on oil and gas.
Economic Diversification and Challenges Ahead
Experts, including Professor Fawzi Mahriq, emphasize that the AFCFTA will facilitate Algeria's access to regional markets, fostering mutual investments and reducing trade costs. The agreement is expected to stimulate various sectors, promote infrastructure development, and enhance the marketing and distribution of goods across the continent. However, Algeria faces internal challenges, such as the need for productive sectors to expand and improve quality, alongside external issues like inflation, unemployment, and security concerns in the Sahel region.
Former Trade Minister Mustapha Ben Bada highlights Algeria's economic indicators, such as a growth rate of 4.3% and foreign reserves exceeding $70 billion, as favorable conditions for playing a pivotal role in Africa. He advocates for continued efforts towards economic diversification, modernization of infrastructure, and strengthening governance to improve competitiveness in the African market.
