Interview with H.E. Mr. Djamel Moktefi, Ambassador of Algeria to Finland
What are the main business sectors in Algeria?
The main business sector in Algeria is energy. Oil and gas account for the main part of the country’s GDP. Algeria is an important exporter of hydrocarbons. In fact, Algeria is the 18th largest oil producer in the world and the largest gas producer in Africa as well as the 9th largest gas producer in the world.
The Algerian economy is dominated by public companies. However, the government’s action plan aims to implement reforms to shift the economy toward a sustainable, private sector-led model and engage a new industrial policy focused on 12 strategic sectors, and to mention few of them : the steel and metalworking, industrial chemistry, pharmaceutical production, food processing, timber products, wood and furniture industry, tourism development, agricultural products, and renewable energy. Today, Algeria is enlarging the scope of investment by foreigners with a revised catalogue of industries in which foreign investment is encouraged and embraced. In fact, the doors are open to more dynamic economic activities.
Which kind of business opportunities are there for Finnish companies in Algeria in these or other sectors?
Algeria is a developing country, classified as an upper-middle-income country by the World Bank, with a large market of consumers (around 50 million inhabitants). Moreover, the Trans-Saharan road, a highway crossing the Sahara desert and a direct link to six African countries will help Algeria to become an economic engine on the continent and a platform for exports to Africa. In addition, Algeria is a member of the African Continental Free Trade Area; therefore, it can be said Algeria is the gateway to the African market.
No doubt, Algeria offers great business opportunities for Finnish companies. They could be involved in areas where they have expertise such as circular economy, renewable energy, water management, forestry management, waste management, and cybersecurity. Currently, several Finnish companies are operating successfully in Algeria.
If a Finnish company decides to invest in Algeria, what are the most important issues this enterprise must take into consideration to succeed in the market?
The tips for a successful new market entry strategy are almost the same as in any other country. To succeed in the Algerian market, a Finnish enterprise must consider the legislation, administrative procedures, large public sector, and other requirements specific to Algeria. Furthermore, building trust and establishing a local network of people to support the Finnish company is recommended.
Some of the main advantages in Algeria include: many natural resources, a strategic geographical location (connecting Africa, Europe and the Middle East), low energy costs, a skilled and affordeable workforce, a good infrastructure and easy communications that will benefit any investor.
In addition, through its network, the National Agency for Investment Development (ANDI) supports foreign operators in their search for partners and projects in Algeria at a central and local level.
Which kind of assistance and which kind of benefits/incentives are there in Algeria for Finnish companies which would like to invest in Algeria?
The Algerian government offers various incentives to foreign companies wishing to invest or do business in Algeria. The aims of such incentives are to attract and encourage foreign investment.
There are substantial fiscal advantages such as 10-year tax exemptions depending on the location and size of the project; exemption from VAT; customs duties; a reduction in employers’ contribution to social security for the recruitment of young job seekers; renewable land concession over periods of 33 years; and tax exemptions for the duration of the project for export operations; temporary 5-year exemption from the company benefits tax, global income tax and turnover tax.
Other incentives are related to financial assistance through the banking system. Foreign companies can benefit from zero interest loans, and bonus interest rates from 2 to 4 per cent. For instance, 3 percent on bank loans granted to investments in certain activities. Another advantage for foreign companies is that they can borrow money from leasing companies and investment funds such as the National Investment Fund.
Furthermore, the current investment policy focuses on facilitating investment by streamlining procedures for setting up a company, conducting business, supporting investment projects, time saving as well as reducing administrative costs. However, a new investment law will be adopted soon to improve the investment climate by greater benefiting both local and foreign private investors and will provide even more new incentives. Therefore, there are favourable conditions for Finnish companies willing to invest in Algeria. Additionally, Algeria already has a bilateral investment convention with Finland in place.
Algeria’s culture is strongly influenced by the country’s history, as well as other aspects such as its literature, music, arts, crafts, and cuisine. Islam gives Algeria its cultural and social identity, particularly as most Algerians are Muslim. The official languages of Algeria are Arabic and Tamazight (Berber). Algeria has produced a variety of poets, novelists and artists. Furthermore, Algeria has a thriving handicrafts industry (carpets, ceramics, leather, lute making, pottery, silverwork, etc.).
Places to visit in Algeria?
As the largest country in Africa, there are plenty of wonderful places to visit in Algeria. My country is home to amazing archaeological sites dating back to the Roman and Phoenician periods. Seven Algerian landmarks are now listed as World Heritage sites by UNESCO : the Kalaa of Beni Hammad, Djemila, Tassili n’Ajjer, Timgad, Tipaza, Valley of M’Zab and The Casbah of Algiers.
To name other attractive places, there is the capital, Algiers, in the north, on the Mediterranean coast, with its oldest part: the Casbah where you can find a market of serpentine alleyways and intricate arches where a variety of traditional crafts are sold. There is also Oran, to the west of Algeria, the second biggest city where you can visit Fort of Santa Cruz, the highest point of Oran. Other urban centres include Constantine, City of Bridges, Tlemcen named the Capital of Islamic Culture in 2011, and Annaba in the northeastern part of the country.
Algeria’s Sahara, the second largest desert in the world, is one of the most important tourist destinations in Algeria. The top attractions in the south of Algeria are: the oasis cities of Taghit and Beni Abbes surrounded by huge sand dunes, Ghardaia founded by the Mozabites, and Tamanrasset, the chief city of the Algerian Tuareg.
What is your main goal as Ambassador during your stay in Finland?
As Ambassador of Algeria in Finland, my main goal is to further strengthen the established bilateral relations and cooperation between our two countries. To achieve this goal economically and commercially, I intend to implement a roadmap which, among other things, includes organizing trade missions, establishing a business council, promoting business opportunities for Finnish companies in Algeria, to take part to business events in Finland, to visit Finnish companies around Finland. In this context, I will give particular focus to the Finnish innovative sectors. Indeed, these sectors offer promising opportunities for cooperation between our two countries.
Thank you for the interview, Mr. Djamel Moktefi, Ambassador of Algeria to Finland!
Photos provided by the Embassy.