Benkhalfa: “The Government Doesn’t Rule Out Resorting To Foreign Debt Option”

All remnants of payment of capital public equipment projects, relating to the fiscal years 2014 and 2015, were settled during the first quarter of the current year, said Tuesday, the Finance Minister Abderrahmane Benkhalfa at a press conference in Algiers.

Citing fiscal reports pointing to a deficit of the Treasury amounting to 1.404 billion dinars (DA) during the first two months of 2016, the finance Minister explained that the increase in the deficit was caused by the completion of the investment schemes under the programs of 2014 and 2015.

He also said that bank savings (excluding Sonatrach’s deposits) currently stand at more than 5,000 billion DA.

According to Mr Benkhalfa, the banks and the Treasury “have great funding potential” that will encourage the state to go further towards the promotion of new investment projects: “With the country’s solid base infrastructure built since the year 2000, the government, will now focus increasingly on fostering economic investment”, he explained 

In this regard, Mr Benkhalfa stressed that economic projects planned by various ministries numbered in the dozens.

Also present at the press conference, was the Minister in charge of Budget and Prospective, Mr. Hadji Baba Ammi, who asserted for his part that the state would soon arrive at a rate of expenditure which tallies with its own financial resources.

“We can’t reasonably stop in a brutal way the economic machine. But within three or four months, we’ll reach a rate of expenditures in line with our revenues. It is in this perspective that we have frozen a number of new projects to prioritize ongoing programs,” he argued.

Asked about the possibility of the government to resort to foreign debt due to the country’s dwindling revenues because of the steady oil price decline, Mr. Baba Ammi indicated that it was another capital project funding option: “External debt is not a defect, unless it is not well controlled. If we’re going to use this option, we will maintain a sustainable debt that will be intended only to finance important investments. “

In this sense, he recalled that the country’s public debt represents 8.5% of GDP and the external debt is set at 0.3% of GDP only.