Algerian Finance Minister: “The drop in oil prices is transient and won’t affect 2015 state budget”

The recent oil price fluctuations do not represent for now a “threat” to Algeria’s external and internal balances and won’t have a negative impact on the 2015 state budget, affirmed Monday in Algiers the Minister of Finance Mohamed Djellab.

“These fluctuations of oil markets suggest a decline of oil prices and if the trend is confirmed, it doesn’t represent a threat the country’s external and internal balances, it’s rather a warning that the government must seriously deal with,” Mr Djellab said while presenting the Finance Bill 2015 to the Council of the Nation or upper house of Parliament.

Oil prices tumbled in recent weeks, reaching less than $90 a barrel due to excess output by some oil producing countries and the geopolitical tensions now besetting some parts of the world.

Oil revenues have relatively plummeted during the first nine months of 2014 due to lower prices, said the finance minister.

The evolution of budgetary indicators for the first seven months of 2014 posted a 3.8% continuous increase  in revenues compared with the same period of 2013 and a 2.4% decrease in royalties from oil taxation amid increased normal tax by 11.4%, which allowed, according to the minister, to offset against the decline in oil taxes.

As for the internal balances, Mr Djellab underscored that the drop in the activities of the hydrocarbon industry had a negative impact on the national economy development, which fell by 2.8% in 2013 against 3.3% in 2012, while key sectors such as agriculture, housing, construction, public works and services grew respectively 8.8%, 6.6% and 7.8%.

The Finance Bill 2015 was drafted by taking into account the international situation  marked by persistent threats of the continuing slowdown of developing countries’ growth, the geopolitical hotbeds of tension in some countries and the slump recorded in the economic activity in the industrialized countries notably in the Euro zone,” Mr Djellab assured.

The Algerian government is committed, he said, to pursuing efforts to create a coherent and sustainable development and shoring up the basic needs of the Algerian citizens in the four corners of country.

For the minister, these efforts will be translated into the pledge to devote all the funds with the aim of encouraging the creation of jobs and wealth and upgrading the quality of life especially in health, housing and education in addition to basic infrastructure consolidation.

Meanwhile, Members of the upper House of Parliament or Council of the Nation for their part insisted Monday in Algiers during the first day of the debate on the Finance Bill 2015, on the diversification of the national economy through the use of alternative industries, so as to foster wealth and job opportunities.

The Parliamentarians also highlighted the imperious need to enhance the potentialities and resources of Algeria with on focus agriculture revival in order to halt the country’s heavy dependence on hydrocarbons but also to ensure national food security.

It should be noted that the 2015 finance bill has already been examined and passed by the members of the National popular Assembly or lower house of Parliament earlier this month.