Hafez Ghanem: “We Offered Loans To Algerian Officials But They Rejected Them”

Algerian officials received warnings from the World Bank about the risks of printing money, as Bretton Woods Commission called on Algeria to be cautious and vigilant in light of the possibility of recording inflation risk while proposing external loans to fund projects in Algeria.

Algerian officials responded by rejecting what they called “Bad Experience of the 1990s “.

The World Bank’s Vice President for the Middle East and North Africa, Hafiz Ghanem told Echorouk, on the sidelines of a regional high-level seminar on the new economy of North Africa and the Middle East, which ended on Tuesday at Algiers Palais des Congrès, that the negotiations that were initiated by the World Bank with Algerian officials enabled benefiting from Foreign loans, but Algerian officials refused, preferring to inject foreign investments to the Algerian market, instead of external borrowing.

The international official said that the Algerian government’s choice to borrow from the central bank and print more money should be a cautious decision in light of the possibility of recording the risk of currency inflation, as the process should be done under the supervision of the central bank and to find mechanisms to control inflation.

Hafez Ghanem called on the Algerians to get out of the cloak of oil, saying that the barrel, which is sold today at 70 dollars will not return like it was before July 2014, as all the data in the international market has changed, and there is no room to rely on the recovery of the treasury as was the case in the past, and this is related primarily to the technological development that is witnessed by the world, and the ratio of supply and demand and the attempts of many countries to change their resources, which makes Algeria, like other countries that are affected by the oil crisis, to diversify their sources of income.

“Algeria is only one of the Arab and foreign countries that are affected by the repercussions of the oil crisis”, referring to the Gulf states.

“What is required of them today is the search for alternatives, investment in new sectors and exploitation of the sleeping resources”.

The World Bank official confirmed that if Algeria refused the option of foreign borrowing, it chose to inject new investments, but this would require a revision of the regulation that is governing the entry of foreigners to the Algerian market 51/49, which he described as one of the obstacles that are preventing the flow of foreign investors.