On July 5, 1962, Algeria became independent. However, the oil resources remain the property of the concessionaires as long as their permits expire. It was in 1971 that Algeria took full control of its hydrocarbons. But sixty years later, the “trap” of oil revenues has not been overcome.
On February 24, 1971, President Houari Boumédiène announced the nationalization of the hydrocarbon industry. The state takes control. Since then, independent Algeria has mainly lived off oil revenues. They contribute almost 60% of the state budget.
Oil shocks But Algeria is also dependent on fluctuations in hydrocarbon prices. An external factor over which it has little control and which cyclically fuels social discontent. The country is experiencing the full force of the shocks of 1973, 1986 and 2014. On the contrary, in the early 2010s, Algeria is going through a flourishing period. The Ukrainian crisis and rising current prices point to a new period of significant inflows of foreign currency for Algeria.
Few industries Sixty years after independence, the problem of “diversification is the same”, emphasizes Professor Youcef Benabdallah. The country is very little industrialized: the sector weighs less than 5% of GDP. The challenge is to escape this cyclical system that is facing new challenges such as the global agenda for climate change and the goals of a carbon-free economy.
►Also read: 2020, annus horribilis for Algerian finances(January 19, 2021)