The increase in oil prices caused by instability in Iraq and the boost in investor confidence caused by the stable transition of power has given the Algerian government a generous boost in revenue, which it plans to spend on boosting the country's manufacturing capabilities and solving our rather rampant youth unemployment. Furthermore, it will take advantage of Algeria’s strategic location and internal stability relative to its neighbours to make the country a major transhipment hub for Europe and the rest of Africa.

Algiers

The Algiers provincial government has rezoned a large parcel of land on the outskirts of the city for the development of a major logistics hub, which will support the planned growth in manufacturing in the region. It will feature space for storage and fulfilment warehouses, administration buildings, offices for logistics and shipping companies, small scale onsite manufacturing and assembly facilities, vehicle refuelling depots and a loading dock for land based shipments. Incentives will be provided for companies, both foreign and domestic, to establish operations here, including the ability to write off 10% of the value of warehouses on top of their construction cost. Companies operating within the hub will also be exempt from land taxes for the first 5 years of operation. This hub will also be ideal for ecommerce companies seeking to break into European and African markets, a move that is hoped to boost Algeria’s infant ecommerce industry.

To make full use of these new facilities, a heavy industrial park will open nearby, specialising in auto assembly, electronics and heavy industry, catering to European manufacturers wishing to save on labour costs without paying the extra cost of shipping from Asia and Asian manufacturers wishing to lower the price of transport to better compete in the European market. Furthermore, companies operating here will be perfectly poised to access African markets that have demand for heavy industry and auto manufacturing but lack the infrastructure or security environment to have them produced locally. The perfect example of this is Libya, which has a rapidly rebounding consumer base, but whose port and manufacturing sectors have yet to recover due to the long maturation period of such projects. To facilitate this, import tariffs will be slashed to 15% for products relevant to the supply chain of these new industries and final products 70% produced from domestic components are subject to free trade legislation with Turkey and the African Union. This incentive will be vital for creating a downstream network of local parts manufacturers. In order to support this rapid expansion of industrial and shipping activity in the region, the El Hamdania will receive a $900 million expansion by 2 million TEUs, making it the largest port in the Mediterranean. This will include 2 more berths, further seabed dredging to increase the size of potential cargo ships, more high capacity container cranes and increased storage and processing facilities. We will reach out to China’s Belt and Road for this funding.

The hope is that the new factories will create jobs for low-skilled and young Algerians, while the logistics facilities, with their need for data-driven solutions and supply chain innovation, will provide high-paying employment for many university graduates.

Oran

To ensure that development is not only concentrated in the capital, the Oran region will receive a smaller logistics and transhipment centre along with the associated investment incentives provided in Algiers. Although it will also begin zoning for an industrial park, the focus of this will be on light manufacturing and high-tech production. The hope is that the lighter industry and manufacturing involving more innovative products will generate less pollution and industrial waste, reducing the impact on Oran’s current tourist oriented economy.

However, the city has also been selected as a hub for the export and refining of Algeria’s mining operations in the west and south of the country. To do this, the railway station will be expanded and upgraded to a rail transshipment hub, capable of receiving high quantities of raw minerals and offloading them onto trucks for transportation to refineries and the port. The $50 million upgrade and expansion will include new tracks, freight cranes, more roadways, short-term storage facilities and administration buildings.

Beyond the view of the tourist hotspots along the coast, a $150 million jewellery production complex will be built to turn gold mined in Tamanrasset into higher value goods for export. A $500 million steel mill will also begin being built, expected to be complete in 2029, to turn some of Algeria’s iron ore into steel to satisfy the growing construction industry. Investors are looking to Chinese companies to invest up to 60% into this mill to diversify their sources amid strife with Australia. To cope with the influx of demand for mineral and industrial export from Oran, the port will receive a $400 million expansion to increase its capacity from 1.5 million TEUs to 2.5 million.