Algeria must relax its foreign investment regulations and lift its import barriers, Spanish Commerce Secretary María Luisa Poncela said Tuesday in Algiers, where she is accompanying Spanish Prime Minister Mariano Rajoy.
Several industrial and commercial partners in Algeria have recently called on Algiers to open up its economy, which they believe is too closed to foreign investment and imports.
Rajoy participates Tuesday in Algeria at the 7th “high-level meeting” between the two countries. He met with Algerian Prime Minister Ahmed Ouyahia at midday and will speak later at an Economic Forum bringing together businessmen from both countries.
With more than 7 billion euros of trade, Spain is “among the most important partners of Algeria”, of which it is the 3rd customer and 5th supplier and where 450 Spanish companies operate, recalled the minister Algerian Minister of Industry and Mines, Youssef Yousfi, opening this forum.
Yousfi nevertheless regretted relations “below potential” and “below expectations” of the two countries.
Restrictive measures imposed “by Algiers
Algeria should “revise the regulations governing foreign investment in Algeria to stimulate them,” responded, without further details, Ms. Poncela, estimating foreign investment “vital to strengthen the Algerian entrepreneurial fabric.”
Among the most controversial rules is the so-called “51/49” law forcing all foreign investors to associate with one or more Algerian partners holding 51% of the company’s shares.
Ms. Poncela also lamented an “11% drop” in Spanish exports to Algeria “because of the restrictive measures imposed” by Algiers.
“Spain does not consider the trade deficit (…) with Algeria as a problem, we consider as a problem the restrictions placed by the country on imports of certain products that significantly affect Spanish exports”, launched the Secretary of State.
Crude oil prices, which account for 50 percent of GDP, 60 percent of budget revenues and 95 percent of foreign exchange, hit the Algerian economy severely.
To stem the rapid melting of its foreign exchange reserves, in 2016, Algiers set quotas for imports of certain products, replaced since 1 January by the total ban on the import of 900 families of products into Algeria.