Algerian president urges ministers to make reforms to save $20bn during crisis

14 Jul 20

Urgent reforms could save the Algerian government $20bn by the end of the year, the country’s president has told ministers.

 

Abdelmadjid Tebboune told a cabinet meeting to accelerate reforms in sectors including energy and the banking system to save money for the state, which has been hit hard by Covid-19 – and a corresponding drop in oil prices.

Algeria’s economy is heavily reliant on sales of oil and gas, which account for 93% of the country’ total export revenues.

The economy is highly cash-based, and Tebboune said measures should be taken to “recover the money available in the informal market”, according to a statement released by the government.

Improving Algeria’s tax system is “a primary objective” of the government, according to the finance ministry.

Last year the government received 2.7trn dinars ($21bn) of its total 6.8trn dinars ($52bn) tax receipts from petroleum taxation, and with oil tax revenues predicted to fall by 500bn dinars ($3bn) in 2020, the government wants to decrease its reliance on fossil fuel sales.

Tebboune’s reforms will also include helping to set up a system of Sharia-compliant financial services with the hope of encouraging investment in the north African economy.

He also told ministers to reduce the level of imports in order to preserve foreign exchange reserves.

Also at the meeting, finance minister Aimen Benabderrahmane said he was ready to “immediately” put 1trn dinars ($7.8bn) into the economy to help it recover from the shock caused by the pandemic.

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