ESCWA Publication: E/ESCWA/CL3.SEP/2021/TP.17
Country: People’s Democratic Republic of Algeria
Publication Type: Working papers
Cluster: Shared Economic Prosperity
Focus Area: Trade & regional connectivity
Initiatives: Transport and trade connectivity
SDGs: Goal 9: Industry, Innovation and Infrastructure
Keywords: Exports, Export diversification, Finance, Arab countries, Trade financing, Technical cooperation
The natural resource curse unmasked: the economy and trade finance in Algeria in the shadow of COVID-19
February 2022
The underdevelopment of Algeria’s trade finance market can be attributed to the country’s overreliance on oil and gas exports and the little attention given to the development of non-oil exports. The Algerian financial system is ill equipped to support the unsophisticated local industrial complex in times of economic distress and much less so to promote an export-led growth model. This is a major limiting factor for the economic growth and is exacerbated by the COVID-19 pandemic, which has left small firms in the country in real danger with no clear rescue strategy by the Government. Nevertheless, the crisis is a good opportunity for the Government to rethink its trade finance ecosystem and encourage and promote the introduction of more tools and liquidity for businesses to recover and prosper in the future.
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Trade & regional connectivity
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The underdevelopment of Algeria’s trade finance market can be attributed to the country’s overreliance on oil and gas exports and the little attention given to the development of non-oil exports. The Algerian financial system is ill equipped to support the unsophisticated local industrial complex in times of economic distress and much less so to promote an export-led growth model. This is a major limiting factor for the economic growth and is exacerbated by the COVID-19 pandemic, which has left small firms in the country in real danger with no clear rescue strategy by the Government. Nevertheless, the crisis is a good opportunity for the Government to rethink its trade finance ecosystem and encourage and promote the introduction of more tools and liquidity for businesses to recover and prosper in the future.
