This Algerian industry will be the first to open up more to foreign investors

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Algerian Minister of Industry and Mines affirmed that foreign investors in the automotive sector will be required “to provide financing and know-how”, instead of the obligation to associate to a local operator.

The vagueness that reigns in Algeria around the easing of the 51/49 rule, which limits the share of foreign investment in a project carried out in Algeria, contained in the 2020 finance law to 49%, has just been dispelled for the automotive sector. Indeed, the Minister of Industry and Mines, Ferhat Aït Ali Braham, announced Tuesday, February 18 in Algiers that the new specifications will not force foreign investors to associate with a local partner, but with conditions, reported Algeria Press Service (APS).

“We will not force the investor to associate with a national partner but we will impose it to bring the financing and the know-how”, declared the minister, specifying that the government will also act to help the operators of the automobile industry existing in Algeria to “be integrated into the clauses of the new specifications”.

In addition, Mr. Aït Ali Braham said that potential investors will be required to carry out in a first phase certain equipment such as the camber, in order to have from the start an Algerian hull and chassis.

The relaxation of the 51/49 rule divides in Algeria

The Algerian government’s decision to abolish the 51/49 rule for certain sectors has been welcomed by many experts who foresee a welcome opening up for the national economy on foreign direct investment (FDI). Algerian employers remain divided on the issue.

In fact, in a press release, the General Association of Algerian Entrepreneurs (AGEA) declared itself firmly opposed to the government’s decision, a position motivated by the fact that “companies, like the construction industry, manufacturers of construction materials. construction, services and electronics are weak and not helped to develop in the current environment ”. Thus, she suggests that the government explore “other avenues” to find “other thoughtful and adequate regulation” to “encourage local business first”.
Unlike AGEA, which opposed the removal of rule 49/51 for “non-strategic sectors”, the Forum of Chief Executives (FCE) is quite supportive of the measure. “I think it is a law to repeal, perhaps to keep it on strategic sectors, and not to generalize it,” said Sami Agli, president of the FCE, in an interview granted to Channel 3 of national radio. .

In 2018, Algeria received $ 1.5 billion in foreign direct investment, one of the lowest in the region.

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