Algeria's economy has seen significant reforms in recent years. Continuous improvements to the economy of Algeria are being made by the government, which has had a positive impact on investment in a number of different business sectors. According to international standards, Algeria is categorized as a lower middle-income country. Let us consider the history of Algeria's economy and its current status.
Algeria obtained its independence in 1962. Before this time the economy of Algeria was largely based on agriculture. During the 1960s and 1970s oil revenues began to rise dramatically and thus the government shifted its economic sights to the oil industry. Extensive industrialization took place and the economy flourished. Unfortunately oil prices dropped in the 1980s, negatively impacting on Algeria’s economy which had become almost completely dependent on oil.
Today the hydrocarbons sector remains the principle industry of Algeria’s economy. Algeria is currently the world’s second biggest exporter of gas and it possesses the world’s fifth largest natural gas reserves. The hydrocarbons sector makes up approximately 52% of budget revenues, 95% of the country’s export earnings and 25% of the GDP (gross domestic product). Despite efforts to diversify the Algerian economy, the government has not been able to do much about unemployment or raise the population’s living standards.
Although agriculture doesn’t play as large a role in Algeria’s economy as it did in the past, it is still an important sector for the country. Around a quarter of Algeria’s population is involved in this sector. Over 30,000kms of Algeria’s land is used in cereal grain farming, which takes place chiefly in the Tell region. The main crops are wheat, oats and barley whilst many citrus fruits are also exported. Fishing forms a small percentage of the economy. Fresh fish such as bonito, sprat and smelt are sent to France whilst preserved fish are exported to Italy and Spain.
The government is working hard to improve Algeria’s economy and, at the same time, the situation of its people. With increased foreign interest and investment the country can look forward to growth in the future, particularly as the economy becomes more diversified.