Algeria Drops Privatization Plans

Algeria Drops Privatization Plans

Saturday, 13 January, 2018 - 08:00
A view of Krechba gas treatment plant, Algeria, December 14, 2008. REUTERS/Zohra Bensemra/File Photo
London - Asharq Al-Awsat
The Algerian presidency has totally rejected the government’s plans to partly privatize state-owned companies, reports have said.

During a meeting held last month with the Labor Union and business owners, the cabinet expressed readiness to privatize the firms in order to help the country's stumbling economy.

But Algerie 1 news website quoted informed sources as saying that the presidency has informed Prime Minister Ahmed Ouyahia of its total rejection of any privatization process.

The presidency’s instructions include big firms and small and medium enterprises, the sources said.

In 20016, Reuters said that Algeria plans to allow its dominant state banks to list on the local stock exchange to help develop its financial markets and diversify sources of funding after the oil price slide.

If implemented, the plan will open the door for foreign investors to acquire controlling stakes in banks, reversing a rule requiring Algerian firms to keep a majority shareholding in any partnership with foreigners, it quoted a senior financial official as saying.

The oil price drop since 2014 has put Algeria under financial pressure, forcing the government to trim spending and search for alternative financing sources.

Algeria’s parliament has approved increases in subsidized gasoline and diesel prices for the third straight year as part of the 2018 budget, amid government attempts to compensate for the sharp fall in oil and gas revenues.

The budget also includes higher and new taxes on some imported and local products in a bid to diversify funding away from oil and gas exports.

Earlier in the week, Algeria banned the import of 900 products including cell phones, household appliances and vegetables in a bid to cut spending following a drop in earnings from oil and gas.

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