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The World Bank Shines a Light on Algeria’s Economic Transformation

On April 18, 2025, the World Bank published an insightful article titled “How Algeria is Shaping its Economic Future”, offering a nuanced yet clearly optimistic perspective on the country’s ongoing economic transformation. Long regarded as a hydrocarbon-dependent, mono-export economy, Algeria now appears to be at a historic crossroads. At the heart of this shift lies an ambitious target set by President Abdelmadjid Tebboune: reaching a Gross Domestic Product of $400 billion by 2027.

A Diversification Strategy in Motion

The figures released by the World Bank are telling: non-hydrocarbon exports have tripled since 2017, reaching $5.1 billion in 2023. Though they still represent just 2% of GDP, this trend signals a critical shift in Algeria’s economic model, one that is moving away from structural dependence on oil and gas.

Among the country’s most exported goods are now fertilizers, steel products, and cement — a reflection of a deliberate strategy rooted in wide-ranging structural reforms. Initiatives like the Algerian Port Community System (APCS), which has digitized and streamlined port operations, and the 2022 Investment Law, implemented via the new Algerian Investment Promotion Agency (AAPI), have paved the way for greater ease of doing business and access to fiscal incentives.

The World Bank’s Institutional and Technical Support

The World Bank has played a key role in Algeria’s transition, offering both technical expertise and strategic guidance. Its support has bolstered sectors such as agriculture — with a focus on fresh produce exports — and enabled the development of value chains in leather, cork, and precision mechanics.

Significantly, support for ALGERAC (the Algerian Accreditation Body) led to an increase in accredited laboratories from 77 to 135 in just three years — a major step toward international market access.

The APCS has been hailed as a “game changer” by Meriem Ait Ali Slimane, Lead Economist at the World Bank, for its transformative impact on Algerian trade. Meanwhile, the AAPI has modernized the state's relationship with investors through a digital interface that facilitates investment procedures.

Structural Challenges Still Loom

Despite notable progress, critical challenges remain. Low productivity, persistent bureaucratic hurdles, and dependence on carbon-intensive industries such as fertilizer and cement pose significant risks to sustainable growth. Moreover, with the EU’s Carbon Border Adjustment Mechanism (CBAM) set to take effect, Algeria’s exports could face competitiveness issues unless industrial processes are swiftly decarbonized.

To address these concerns, the World Bank recommends a threefold strategy:

  • Carbon pricing,

  • Export market diversification,

  • Targeted investments in renewable energy and ICT.

Looking Ahead to 2027

As Algeria enters this pivotal phase, one central question arises: can the country achieve its goal of reaching a $400 billion GDP by the end of 2027, as pledged by President Tebboune?

With GDP standing at approximately $206 billion in 2023 (according to World Bank data), doubling that figure in just four years would require an average annual growth rate of nearly 18%. While ambitious, this target is not entirely out of reach, especially in a context of economic catch-up, rising commodity prices, and large-scale investments.

Several key factors will determine success:

  • The ability to attract foreign direct investment (FDI) in high-potential sectors like green energy, manufacturing, agribusiness, and digital technology.

  • Effective integration into regional markets through mechanisms such as the African Continental Free Trade Area (AfCFTA), potentially opening access to over one billion consumers.

  • Swift alignment with international environmental standards to protect the competitiveness of industrial exports.

  • Regulatory and monetary stability to reassure investors and strengthen trade partnerships.

Conclusion

Algeria stands at a defining juncture. Between a rentier past and a productive future, the country now possesses the momentum and the means to reinvent its economic model. Yet the journey toward a $400 billion GDP will be far from linear. It will demand strategic foresight, bold reform, and an unwavering commitment to innovation, sustainability, and inclusivity.

The Port of Algiers — once a symbol of energy dependence — is gradually becoming a testament to economic resilience. And beneath the towering cranes, among crates of dates and spools of steel, one might finally glimpse the true face of Algerian economic sovereignty.

By Belgacem Merbah

Sources:

  • World Bank (2025), How Algeria is Shaping its Economic Future

  • World Bank Data, Algeria – Macroeconomic Indicators

  • Algerian Government, Investment Law 2022

  • African Economies Observatory, AfCFTA and Regional Integration: What’s at Stake for Algeria

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