Algeria must relaunch consumer loans, IMF says

The government should relaunch consumer loans and make more efforts to improve business climate and stop inflation, said International Monetary Fund (IMF) Chief of Mission for Algeria.

“The tax on professional activity should be reviewed and consumer loans must be relaunched to enhance consumption in the market,” Zain Zidane told reporters in Algiers.

“There is a need to diversify the Algerian economy and cut the serious dependence on hydrocarbons,” he added.

The Algerian official, who is on a visit to Algeria as part of annual talks with member states believes that the government faces a big challenge: how to stop inflation.

Inflation is expected to reach 8.5 percent by the end of the year on an annual basis.

“The biggest challenge is to end dependence on hydrocarbons and develop local industries to satisfy domestic needs.”

Zidane highlighted reforms carried out by Algeria on many levels but “it should improve business climate and work on attracting more direct investments.”

He believes that capacities in world market are still available and Algeria can use them provided that it improves its domestic laws and business climate.

The official stressed the necessity of revising the 51/49 % ownership rule saying it should be applied on strategic sectors only in order to attract direct foreign investments as much as possible.

“According to a recent study conducted by the World Bank on 88 countries, Algeria is the only state in the world which implements such legislation,” he said.

According to Zidane, the Algerian economy growth is expected to be estimated at 2.5 percent only while the government was hoping it would reach 4.5 percent.