The country indicators may be struggling, but spirits are high. For every $1 drop in the median price of a barrel, $600 million worth of revenue evaporates from the country’s coffers every year. For the 18^th-largest producer in the world, these drops in the price of oil could mean a catastrophe, as more than $80 billion of Forex reserves have been lost in the last two years. Nevertheless, Algiers absorbed the loss and refused to cut its development programs or social policies.

Its growth potential and stability make the nation a noteworthy case in the MENA region. But with 97 percent of its GDP derived from hydrocarbons, how does the country manage?

Amid difficulties and adverse circumstances, it’s a matter of resilience. If you see an obstacle as a barrier instead of a launch pad, you don’t see Algeria clearly. “To manufacture remains a difficult commitment” said Ali Boumediene, chief executive of Bomare, a leader in electronics manufacturing.

“It’s not easy at the beginning. But from beginning to end, we’ve learned the ropes of the job in this environment. Our determination has become greater, as our ambition and expertise continue to grow,” said Boumediene, who manufactures Algeria’s second largest brand of mobile phones.

The private sector contributes around 80 percent of the GDP and pushes to invest in new niche positions and state monopolies like aviation, or even hydrocarbons.

“We are in a country of free trade, but the economy is mainly under state control. If you want to do business you don’t need authorization unless you produce or manufacture something. To have that authorization isn’t easy. So it means there are very few of us,” said Abdelouahab Rahim, chairman of Arcofina Holding.

“In Algeria, we believe in the virtues of pragmatism and common sense, and we affirm that the economy of our country and its laws guarantee proper business conditions for any operator,” said Abdelaziz Bouteflika, President of Algeria.

Everything is possible

Alger Marina Bay, the future business district on the outskirts of the capital, is taking shape on 75 hectares at Pins Maritimes, in an alluring project that will completely change the eastern face of the city. Abdelouahab Rahim intends to make this seaside urban complex a landmark attraction that includes an aquatic park and a marina able to hold up 700 boats, restaurants, boutiques, a shopping mall, upscale apartments and hotels. The entrepreneur strives to make it the greatest real estate project in the Maghreb region. “Alger Marina Bay is proof of what we are capable of doing,” he said. To re-launch productive investment and growth, Arcofina creates 3,500 direct hires and 500 jobs a year.

Now, what about the crisis? Algerian entrepreneurs don’t complain about it. Their biggest nightmare is bureaucracy and the informal economy; the whole of the private sector suffers from it, although it remains dynamic and the greatest supplier of jobs, as it continues to absorb an ever-growing working force.

A new model for growth

At less than 50 dollars a barrel, income is shrinking. Today, black gold doesn’t generate more than 21 billion dollars in net profit a year for Sonatrach, the national hydrocarbons company.

The energy transition cannot wait any longer. Even as the largest gas producer in Africa and 9th largest in the world, the country foresees $60 billion of investment in the next 14 years in solar and wind power. In addition to environmental benefits, this has a lot to do with saving and stockpiling some 300 billion cubic meters of natural gas between now and 2030 to prepare for future domestic consumption.

The state plans to put foreign investors in competition with each other to build large-scale electrical infrastructure. Diplomatic efforts are ongoing to service the economy, and are already playing a role in negotiations to aid stability in the continent. Algeria can count on its army as one of the best prepared and best equipped in the region. Its experience in the fight against terrorism and radicalization makes it a key partner for the United States and the rest of the world.

Abdelaziz Bouteflika, President of Algeria

Along the Trans-Saharan road, Algeria will become an economic engine on the continent and a platform for exports to Africa. It will complete its part of the continental highway in 2018, when 9,500 kilometers of road will link six African countries. A massive project for a mega-port will add to this powerful development: El Hamdania, the largest port on the Mediterranean Sea, will connect Algeria to Africa, Southeast Asia and the Americas.

Our entrepreneurs dream with their eyes open. They know that there are no economic miracles. They know the importance of private investment, and they’ve come to believe in the boom of their capital investments.

Outlook on Algeria

WHAT’S HOT

• Strategic opening on the African market
• Top-notch transportation network
• Low energy costs
• 40 million consumers
• Active SME fabric
• Investment incentive policy
• Qualified labor force
• Political stability

WHAT’S NOT

• The 51/29 law
• Bureaucracy
• Legal instability
• Repatriation of dividends
• Real Estate deficit
• The informal sector

A member of the first generation to be educated in an independent Algeria, the head of the Algerian government considers public service to be a sacred issue. “Africa is today in motion, and in many areas it will fashion a future for the world,” Sellal said.

Can you explain your administration’s political trend and how this translates into the decision-making process?
We are for a strong state and regulator of a society free in its initiatives and supportive of those who are the weakest. Our economic patriotism doesn’t prevent us from seeking out expertise where it is found, and foreign investments should not only be welcome—they should also be encouraged.

What is your ‘new economic model’ and how do you intend to boost a productive economy?
Our strategy is simple: growth as a permanent priority and entrepreneurship as a means of accomplishment. Everything is done to encourage investment and a better business environment. Algeria is among the rare oil producers that continue to create growth and employment. The number of declared investments in the last three years represents 70 percent of activity since 2002 (24,386 projects launched between 2013 and 2016).

The oil crash was sudden and brutal. It considerably reduced our currency income by more than half, but thanks to our prudent monetary policies and to the decision to anticipate debt reimbursement, we can manage these treasury difficulties and maintain a growth rate over 3 percent.

What can you tell us about Algeria’s new investment code?
It is simple and it works. It enshrines the freedom to invest in Algeria; it facilitates the granting of automatic and preset benefits and redevelops the powers of the bodies responsible for investment. We have also established a simplified procedure to oversee the management of industrial land, which is now open to private investment and can be controlled locally.

How can the United States cooperate with Algeria in diversifying its economy? The coming years will have to be a change in our economy. The Americans already accompany us in this ambitious undertaking. Their experiences in Algeria are all successes, whether in petrochemicals, energy, public works, the pharmaceutical industry, the service industry, agriculture or other areas—the opportunities are numerous. It’s up to them to be audacious and creative.

Our relations are excellent at the political level and need to be more dynamic in the economic and trade domains. I think that American authorities have had, in all these years, the benefit of Algeria as a stable and reliable country and an honest and loyal partner. American politicians and entrepreneurs must maintain the optimism and willpower of the pioneers that built their nation. They should envision Algeria as a chance and opportunity for collaboration and mutually beneficial cooperation.

What is your most audacious project?
To firmly establish the country on the path to long-lasting development and prosperity, and to successfully change some of our society’s mindsets and old habits.

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“While remaining attached to the ideals that have always guided our diplomacy, it will continue to prove its capacity of adaptation and creativity,” said Ramtane Lamamra, minister of foreign affairs.

Algeria’s ambition as an essential and powerful speaker for all African and Maghreb affairs dates to when the capital was a Mecca for independent-minded revolutionaries.

“If Muslims pray in holy places and Christians in the Vatican, revolutionaries do it in Algeria,” said Amilcar Cabral, the father of Guinée-Bissau independence. And in a popular gathering before imprisonment, Nelson Mandela, who spent early days training here, said, “Algeria is my second country” during an era when Pan-Africanism was on the rise.

During the 1990s, Algeria had to fight on its own against the scourge of terrorism. It was not until 10 years later after the 9/11 attacks that the world paid attention to this transnational threat.

“This challenge that we were able to overcome thanks to our own sacrifices and the merit of our people and our armed and security forces, applies today like an individual and collective antidote against any adventurism elicited by obscure and evil groups elsewhere” explained the minister of Foreign Affairs, Ramtane Lamamra.

Is the country equally immunized against another Arab spring?

For Lamamra, the head of Algerian diplomacy, it’s “a phenomenon of destabilizing transition, if not violence, not only for the country and the people who were targeted, but the fake ‘spring’ has equally favored the birth and expansion of a terrorist monster that attacks all countries and all its people.”

Security-related issues constitute a top priority in Algeria’s foreign policy agenda, which includes the 5+5 Western Mediterranean Dialogue, the European Union, Mali, Libya, France, and so forth. Algiers has always been against an interventionist, hegemonic or conformist diplomacy.

The fight against terrorism requires a “multidimensional approach” to eradicate it, Lamamra said, and in Libya, the solution “cannot be anything but political.” Algeria plays a crucial role in Mali with the signature of the Algiers Agreement for Peace and reconciliation in Mali. Algeria works to bring together Libyan protagonists, and brings financial aid to Tunisia and other neighboring countries, namely in the Sahel.

Its recent victory has banning ransom payments to terrorist groups by European states in exchange for the freeing of their hostages. Its active campaign with international bodies allowed for its universalization at the United Nations in 2014, a major blow to financing, an important niche of terrorism.

Diplomacy that serves the economy

To reduce Algeria’s dependence on oil, Algerian diplomacy is mobilized to promote Algeria as destination and attract foreign direct investment. The use of diplomacy to serve the economy is an integral part of the Algerian foreign policy.

Asked about its relevance today, Lamamra noted its ability to adapt. He is convinced that “Africa constitutes an attractive economic hub that could be an important source of worldwide economic growth.”

A privileged partnership lies with the United States. “Our American partners recognize in Algeria an efficiency unequalled in the region in security matters; our ambition at the moment is to carry Algerian-American cooperation further.”

The multiplication of partnership agreements outside the hydrocarbon sector, in the economic, scientific and cultural domains, as well as the opening of the American International School in Algiers, are proven examples of increased momentum in Algerian-American relations.

“We hope that the number of American visitors increases as they become more aware of Algeria’s attractiveness. The majority of American citizens who visit Algeria do so for professional reasons; those who come for tourism are less numerous, but are regulars who return for the unique tourist potential and above all because of the legendary hospitality of the Algerians,” Lamamra said.

The head of Algerian diplomacy is convinced that the influx of American tourists will reach a crescendo: “They will be welcome in a country that is safe, stable and hospitable.”

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Abdesselam Bouchouareb, Minister of Industry and Mines

To strengthen the new approach to growth, the Ministry of Industry presents a roadmap for growth and structural opportunities. “We want to boost collaboration within and between activities likely to support a move towards higher-value market segments” Bouchouareb said. The two main performance indicators are employment and balance of payments.

Growth activities cover: energy, which includes renewables. The country wants to evolve from supplier of crude oils to producer and exporter of refined products, chemical and petrochemicals, and digital industries. The country’s strategic structural activities include steel and metal industry.

$13 billion production stimulus

The first measure taken by Bouchouareb targeted public sector organizations. These companies have been transformed into 12 independent industrial groups recognized and trusted by major global firms, such as: Massey Fergusson, Liebehrr, Sampo, General Electric, Alstom, Renault, Deutz, Mercedes Benz, ZF and more. Following are some noteworthy examples of restructured industrial groups.

Algeria Mechanical Group (AGM) aims to reach $1 billion turnover by 2020, from $600m currently. It operates in mechanical subcontracting, construction, agricultural machinery, and industrial equipment. Over the last three years the company has been operating at highly integrated levels with Ferguson, with eight industrial partnerships amounting to $470m investment and new projects proposed to American partners.

Algeria Chemical Specialities (ACS) is a smaller group that aims to produce the raw materials needed to substitute imports and become an incubator for start-ups. It has already started to do so by investing in grassroot companies. The group has six operational segments and is exporting glass, paint, raw materials, cardboard, waste re- cycling and hygiene and pharmaceutical products.

Dr. Ismael Chikhoune, CEO, USABC

“We are witnessing increasing foreign investor interest in health care and agriculture,” said Dr. Ismael Chikhoune, chief executive of the U.S.-Algerian Business Council. The pharmaceutical industry is among the country’s most vibrant sectors with investments of $1.12 billion and more than 400 million units produced locally. Growth in this sector builds on strong partnerships with foreign pharmaceutical companies.

Five years from now, Algeria is expected to cover 100 percent of its medication needs, standing today at 61 percent. And Saidal is the leader in the manufacture of generic products and seventh in sales. It is 80 percent state-owned and floated in the Algiers Stock Exchange. It focuses on bio-technology and runs the only bioequivalence center on the continent.

Mines, an untapped resource

Algeria wants to double this sector’s added value in 2017. The total amount of investments projected for the next five years is around $15 billion, according to the minister of industry, whose strategy relies on the processing of mineral products, iron, zinc, lead, marble, non-ferrous alloys, granite, salt, aggregates, gold and tungsten deposits. The Algerian Geological Service Agency (AGSA) and its U.S counterpart—U.S. Geological Services (USGS)—are working on a strategic cooperation agreement that will help to better assess this mineral potential.

Public group Manal comprises nine companies and undertakes mineral surveying, prospecting, development and extraction. The main one is Somiphos, which specializes in phosphate with a turnover of $95 million. The company wants to capture part of the international fertilizer market with Indonesian partner Indorama.

The Office for Mining and Geological Research also part of the group in charge of prospecting, exploration and development. Messaoud Houfani, Manal’s chief executive, explained, “The country is 2,380,000 square kilometers and remains largely unexplored. There are numerous geological formations and therefore a range of metals and minerals. We have identified several structures of interest and deposits to be explored. We support partnerships, particularly with U.S. companies that have the technical know-how and experience prospecting for new deposits.”

Algeria has gold deposits in the Hoggar Mountains, along with tungsten deposits and potential diamond resources that Manal wants to explore further with technological partners. “We want to start preliminary exploration. USGS can help us undertake focused aerial mapping in order to look for these diamonds and kimberlites.” He confirmed that all projects will start production by the end of 2017 and into 2018.

Agriculture: A strategic priority

Agriculture contributes around 10 percent of GDP in Algeria, which recorded a sector growth rate of 6.84 percent in 2015.

Several investments are under development, including the U.S.-Algerian joint venture El Firma El Asria (“the modern farm”), a $300 million investment covering 20,000 hectares with an annual production potential of 245 million liters of milk, 10,000 tons of red meat and 100,000 tons of animal fodder. The expected impact is 1,500 direct jobs and the transfer of technological knowhow.

Chikhoune said, “Our trade missions have resulted in several successful joint ventures over the past two years. We take U.S. companies to Algeria and set up meetings with officials and companies. They discover hidden potential and are surprised at Algeria’s development level.”

The private sector, a stable force

The Algerian private sector accounts for 80 percent of GDP, creating two out of every three jobs, and acts as a stable economic force.

Many success stories could be mentioned here—some with unusual trajectories—but all have economic patriotism as a common denominator. We have spoken to them.

Arcofina

“In 1992, Algeria was bankrupt. Economic liberalisation had started at the same time as terrorism was rising. I decided to move back from Switzerland and start my own business,” said Abdelouahab Rahim, chief executive of Arcofina. He worked in pharmaceuticals and insurance, and purchased the Alger Hilton hotel from Korea’s Daewoo. He secured a lease for 75 hectares adjacent to the hotel from the state, and worked to build the Algeria Business Centre tower there before getting involved in web-based technologies.

In 2006, he signs a franchise agreement with the French chain Carrefour, which through its real estate subsidiary Dahli launched Alger Marina Bay, a major development that changed the seafront of the capital. Arcofina created 3,500 direct jobs, and twice this number indirectly.

Bomare Company

Ali Boumediene started off by importing and distributing household appliances in 1992. In 1997, the young director was invited to South Korea by Samsung. “While walking around their factories, I discovered a different world. Their knowhow and precision fascinated me.” Back in Algeria, the company was launched in 2001. In two years, manual insertion becames automated and the company slowly started to export to Europe, receiving ISO certification for its products and establishing a sub-contracting partnership with LG Electronics.

Ali Boumedienne, CEO, Bomare Co.

Bomare Company is the leading manufacturer of electronics in Algeria. Its brand of mobile phones, Stream System, ranks second on the Algerian market. It has an exclusive contract with Blue Vision for distributing its products (TV, smartphones and tablets) in the Spanish and Portuguese markets, at 250,000 units over five years for $50 million.

The Algerian brand will next expand to France, Germany and the Ivory Coast. Exports account for 15 to 20 percent of the company’s turnover. Boumediene wants to increase this share to 30 percent in 2017 and reach a 70 percent value-added ratio. “We have put everything in place to compete internationally among industrial sub-contractors. We have expert knowledge of the technology.” In 2015, Bomare Company recorded a turnover of $42 million.

Geir Security

Geir is the national leader in security and perimeter protection. “We secure state institutions, including all public and private banks in Algeria,” explained chief executive Noureddinne Yebdri.

Geir’s knowhow revolves around the supply of fire doors, access control systems, armored doors, windows and bank counters, as well as hospital structures such as hermetic bridges for clean and radioactive rooms, operating theaters and emergency room access. Economically, Geir’s protection systems are 80 percent Algerian. Its electronic technology is imported from Germany, the United Kingdom and the United States.

“The Government has taken a proactive approach to preserving macroeconomic balances,” said Hadji Baba Ammi, minister of finance.

Hadji Baba Ammi, Minister of Finance

“Thanks to these efforts, and as a result of high levels of public savings, sound currency reserves and very low internal and external debt, the Algerian economy has proved resilient.” Baba Ammi is confident, but realistic, stating that “controlling public spending, particularly operating expenditure, calls for a review of current subsidy arrangements.”

In Algeria, social welfare spending amounts to more than 25 percent of the state’s budget, over 10 percent of GDP on average. The state’s policy influences the price of mainstream consumer products and supports access to housing, education, pensions and health care. State intervention is widespread and includes additional measures not accounted for in the budget. These cover fiscal advantages allowed by the state, land sales to deliver social housing programs and energy subsidies.

“These support measures amount to almost 20 percent of GDP and are focused on energy products which account for two-thirds of the total amount spent on indirect transfers,” said the finance minister.

Better targeted subsidies

Diminishing budgetary resources have pushed public officials to develop several measures in the 2017 budget that will target low-income groups to reduce public spending to a manageable level. The total amount of direct subsidies included in the state budget is rising, but its share of GDP dropped from 10.3 percent in 2010 to 9.5 percent in 2013. The aim is to bring it down below 9 percent by 2017, Baba Ammi said.

In 2015, energy subsidies amounted to 14 percent of GDP; in 2014 state support reached $15.568 billion. Domestic consumption of fuel has continued to increase by 6 percent per year between 2010 and 2015.

The 2016 budget introduced a review of indirect fiscal measures related to fuels, electricity and gas. Taxes on household consumption increased by 45 percent for gas and 35 percent for electricity. In 2016 prices rose by 37 percent for gas and oil and 36 percent on average for petrol compared to 2015. “These adjustments to energy prices will continue progressively,” Baba Ammi said.

Optimizing resources and controlling spending

The finance minister’s approach is “controlling operating expenditure, reducing imports and improving the performance of public investment schemes.”

The 2017 budget’s operating expenditure is estimated at $45.91 billion and capped at $68.832 billion. In 2016, the total was $70 billion. With regard to public investment, the priority is to complete projects already underway, within budget and time, and commercial projects funded by the private sector or through public-private partnership outside the budget’s balance sheet. This should translate into an 11 percent increase in non-fuel related revenues.

The role of the Bank of Algeria

Financing the public deficit for 2016 will be guaranteed by the country’s revenue regulation fund and through national debt using treasury bonds. According to Mohamed Loukal, the governor of the Bank of Algeria, this approach has yielded $5 billion. It was aimed at “mobilizing available resources tucked away in drawers.”

“With regard to the balance of payments, the aim is to reduce the current account deficit by reducing and better managing imports whilst supporting exports,” said Loukal, who  promises to launch “ambitious reforms” to enable and support exports other than fossil fuels by extending the period for currency repatriation—currently deemed too short for exporters—and by creating a market for currencies to “allow exporters to control costs and protect imports of raw materials against a potential depreciation of the dinar.”

Mohamed Loukal, Governor, Bank of Algeria

Loukal urges for relaxation in currency control and promises measures to improve market operation. The dinar is stable and the Bank of Algeria expects this trend to continue. The 2017 budget projects an exchange rate of 108 dinar against the dollar.

“The dinar has depreciated against the American currency. This flexibility has allowed the exchange rate to act as a shock absorber and to limit the impact of external shocks on the balance of payments and public finances.” According to Loukal, the Bank of Algeria will remain a lender of last resort and will ensure the necessary resources are available to ensure the financial health of the economy.

The banking sector in Algeria is dominated by six state banks and includes 14 private banks with foreign capital. The main challenge now for all Algerian banks is to help and support the diversification of the national economy. This will require business creation and development. Ninety percent of the Local Development Bank’s (BDL) portfolio is made of private-sector Algerian SMEs.

“We are helping businesses secure the imports needed to enable production growth. In 2016 the prospects for this bank were promising, on June 30, its turnover reached $160 million and profit already equaled that achieved in the previous year—$70 million. The BDL’s 2015 business plan clearly sets out the bank’s objectives and strategy to 2020.

Mohamed Krim, CEO, BDL

“In 2020, the BDL’s position will have improved on today, moving to second place or possibly becoming the leader in the financial and banking sector in Algeria,” said chief executive Mohamed Krim. He feels that it is essential to diversify financial instruments beyond the banking system and to stimulate other levers in the financial market as well as alternative financial products.

Insurance, a growth sector

The Algerian market is dominated by the public sector (almost 66 percent of the market). In 2015, total premiums amounted to $1.279 million, compared to $1.255 million in 2014, a 2 percent increase. However, the rate of growth is the lowest recorded by the insurance sector in the last 10 years, reflecting the country’s current economic context. The sector represents around 0.7 percent of GDP.

The insurance market’s outlook report shows total production of $367 million for the first quarter in 2016, a 7 percent year-on-year increase compared to 2015. It is a market with high growth potential but still under-represented given the size of the country’s population.

Growth has been strong anyway as illustrated by Alliance Assurances, the first private company floated on the Algiers Stock Exchange since 2011. It ranked second among private operators after only three years in operation and has remained there since at a 4 percent market share, 430 employees, five branches and a portfolio of 400,000 customers.

Hassen Khelifati, CEO, Alliance

“We are a young and flexible company, responsive to our clients’ needs; we have a technological lead and every year we bring new products that match the needs of businesses and support their development,” said chief executive Hassane Khelifati. Alliance Assurances offers several products to businesses: “We have a re-insurance system which links us to international reinsurers. For businesses, we provide expert advice on their professional and operational cover.”

Khelifati is looking forward to the implementation of the reforms currently being considered by the finance ministry, particularly to put an end to dumping practices that threaten the sector’s solvency if left unchallenged.

Nacer Saïs, CEO, SAA

“Monopolies tend to produce harmful behaviors. We still retain this attitude, even if efforts have been made to open the market over the last 20 years. With the market opening, only the best will be able to survive in the future,” said Nacer Sais, chief executive of Algerian Insurance Society (SAA). SAA is viewed as the engine of the insurance sector in Algeria with a market share of 24 percent.

In 2015, it recorded a turnover of $270 million and is the insurance sector’s leader in Algeria; it has recorded double-digit growth rates during the past 15 years. Like many, it has benefited from the boom in the car market. Algeria was importing 500,000-600,000 cars per year, which has had a very positive impact on the insurance market, especially on SAA, which is also the country’s second largest agricultural insurer. Today the company wants to diversify its portfolio, by developing the SME market segment.

The Algerian Insurance Company (CAAT) is also owned by the state. Until the late 1980s, it was an insurance company focused on transport but has now become a leader in insurance related to industrial and enterprise risks. It has an 18 percent market share and is ranked second in terms of turnover, which has grown steadily reaching $210 million in 2015.

Foreign companies operating in Algeria through investments, development or large infrastructure projects are familiar with CAAT because it has been involved in most of the major projects implemented in Algeria.

Youcef Benmicia, CEO, CAAT

“We insure the main Algerian companies such as Sonelgaz or Sonatrach. But we are looking to the future. We believe that SMEs are the economic future of the country. Agriculture and tourism have huge potential,” said chief executive Youcef Benmicia, even though he predicts an economic slowdown with consequences on the insurance sector. He concluded, “I think that, even in 2016, growth will be relatively modest.”

Unlike its immediate neighbors Tunisia and Morocco, Algeria is not a busy tourist destination, yet it is a country of rare beauty. It’s a continent in itself, and worth exploring.

If you are after chic marinas, bus tours and beach resorts, this is not your kind of place. But if you can imagine yourself sleeping under the Saharan stars, roaming alone through Roman ruins and experiencing some of the most jaw-dropping landscape in North Africa, then Algeria may just be for you.

Algiers, “la Blanche”

“Never was town more nobly placed,” wrote Victorian novelist Edith Wharton of Algiers. This is a city of rare beauty and of thrilling, disorienting contrast. ”La Blanche” (the white one) is breathtaking to behold. It’s a city that never fails to impress with its bright light, sweeping bay and fragrant flowers.

The country’s history lives in the city’s richly textured architecture: wide French-built boulevards and elegant apartments and villas, Ottoman palaces, Socialist-era monuments and an enduring Islamic heart in the steep, hillside Casbah—the city’s UNESCO-protected, pulsing heart of market squares, medieval homes and mysterious cafes.

Labyrinthine streets spill down to the big blue of the Bay of Algiers, with sea and sky and bougainvillea glimpsed at every step. More than just monuments and museums, Algiers is a place to get lost in and absorb. Sometimes frustrating, often breathtaking, for many “La Blanche” is the most captivating city in North Africa.

Coastal cities

Half an hour’s drive west of Algiers, Tipaza is a lively resort-like town with sea-facing Roman ruins that you can have literally to yourself on any given day.

Oran possesses a charming French colonial city center and its Spanish heritage is visible in the city’s oldest monuments. It has a dramatic sea front and an excellent choice of hotels, including the luxurious Hotel Royal.

Bejaia, where candles were invented centuries ago, is a jewel town in the Kabylia region, sitting on the ultimate Mediterranean picture of blue sea, pine trees and crisp air. Stay a few days to discover the picturesque beaches, cliffs, mountain forests and hidden waterfalls of the great Kabylia.

Uncharted territory

Make it far inland into the lush green highlands and high mountain peaks, where natural reserves offer challenging trekking paths.

Biskra is the gateway to the desert, and an oasis town—an enchanted place where orientalists drew their artistic inspiration.

Beyond is the vast, mysterious Sahara that makes up 80 percent of Algerian territory. It is advisable that you fly directly from Algiers in one of the well-organized desert safaris available. El-Haggar Mountains, Tamanrasset, Ghardaia and the overwhelming desert with its omnipresent silence are in no rush to be discovered by mass tourism.

Abdelmadjid Tebboune, Minister of Housing and Urban Planning

“Housing is an essential component of the public investment programs,” said Abdelmadjid Tebboune, minister of housing and urban planning.

The housing occupancy rate has gone from 6.8 in 1999 to 4.3 today. Social housing projects will continue, regardless of the financial status of the country. This was President Abdelaziz Bouteflika’s promise at the time of his election. This titanic accomplishment shouldn’t be seen as just a spontaneous endeavor: “We look forward to the future,” said Abdelmadjid Tebboune, minister of housing and urban development.

In 2016, a total of 350,000 housing units were delivered turnkey. “We are going to respond to the existing demand, and eradicate the shantytowns across the country,” Tebboune said.

The housing stock will reach 8,900,000 units this year, culminating efforts on every level since 1999. The state is the principal housing resource; the subsidy of housing estates represents an essential part of the budget reserved for social transfer. Many types of housing have been built in conjunction with different formulas: public rentals, AADL housing, rural housing, rent-to-buy and subsidized housing. Everyone can find the right formula, from the most disadvantaged to low-middle income to higher income residents.

A plan made of steel

Rent-to-buy is one more formula of this plan: A program intended for the middle class with a fixed income between $240 and $1,080, said Mohamed Belaribi, chief executive of the Agency for Improvement of Housing Development (AADL). AADL bears responsibility for rental management, construction, renovation and the evaluation of public lands and national heritage sites.

AADL oversaw 120,000 properties in 2016; it builds and administers entire new neighborhoods that are “delivered with social well-being in mind, public transportation, schools, medical centers, leisure areas, commercial premises and public areas lit with solar power—this is what citizens get when they get their keys to an AADL home,” Belaribi said.

In encouraging access to the property through the rent-to-buy promotional option these last 10 years, authorities wanted to relieve themselves of recovering rent and daily management. This is OPGI’s business. Mohamed Rehaimia, director general of the OPGI of Hussein Dey, one of the most densely-populated areas of Algiers, estimates its annual turnover was $8 million in 2015. OPGI manages over 87,000 housing units, almost as many commercial premises, and employs 1,176 workers. The efficiency of this program enabled a rental and fees recovery rate of 80 percent in 2016, Rehaimia said. Some 14,000 homes are in the process of development. OPGI Hussein Dey establishes all school infrastructure and leisure amenities within new cities.

For the more demanding customers with a higher income level, ENPI is another state-owned company involved in commercial real estate development since 2013, with 50,000 homes on its property portfolio, 6,186 homes built with materials that are manufactured in Algeria, along with higher standards and solar outdoor lighting.

ENPI acquires land, builds real estate, sells and buy buildings, and also rehabilitates, renovates or restructures them to ensure the sustainability of its main activity. “Consequently, it is very interesting to envision foreign partnerships for every profitable operation” said chief executive Mohamed Belhadi, who wants to improve the rationalization of energy consumption and respect for the environment in their projects.

A fit portfolio

In three years, the state has spent $14 billion to finance its building projects. CNL (National Housing Bank) manages all aid, “assistance and financing,” said its managing director Ahmed Belayat. “We make about $6 billion available every year.” Among its clients are numerous public and private operators as well as citizens who benefit from aid in the rural housing sector. “Close to 1.4 million households have returned to their villages in the countryside thanks to the rural housing project.”

“The state doesn’t want to cut down public assistance, but it can sort and target,” Belayat said. “CNL must restructure to become a growth model that will call on other resources, such as banking and household savings.”

Two-digit growth rate

Cities are an infinite source of wealth, and real estate developers have become inevitable players. The Mutual Guarantee Fund for Property Development (FGCMPI) accounted for 3,340 affiliates in 2015, of which “less than 200 are state-owned,” said chief executive Nacer Djama. “The overwhelming majority is private sector, including several dozen companies with 100 percent foreign capital and mixed foreign-Algerian capital.”

FGCMPI’s engagements amount to $5.4 billion. Established in 1997 as a public organization placed under the care of the minister of housing and urban development, it is a not-for-profit mutual fund that guarantees advance payments made by homebuyers as part of an off-plan sale. According to Djama, real estate development has been showing a two-figure growth rate since the 2000s.

The Ryad of Oran, a different model

Brahim Hasnaoui, chief executive of the Hasnaoui Group, has a different view on social housing. “Everything that’s free is costly and counterproductive,” said this private sector leader in construction, public works and construction materials. “One has to create hope, in obliging people to make this effort and work harder.” El Ryad City in Oran is a real estate project that extends over 450,000 square meters with contemporary low-density building surrounded by greenery. The project was awarded the Energy-Climate Control prize by Green Building & City Solutions Awards 2016 at the behest of the R20 nongovernmental organization.

The Hasnaoui Group never stops looking for novel solutions and suggesting them to its public partners. “The state no longer needs to intervene as it does. Its role is not to build, sell or distribute, but to put fair play into place and to establish a judicious process that is transparent and perennial. Only the free market can create a dynamic development. In Oran prices are nearly half those in Algiers because supply far exceeds demand.”

Improving urban life

For about 20 years or so, Algeria has experienced urban instability. Terrorism, whose main consequences were a massive rural exodus toward the cities and legal instability, also contributed to the degradation of urban life. To make Algiers the first African city without shantytowns was another challenge taken up by the Algerian government. Now, decent housing for all is about to be attained throughout the country.

“By the end of 2016 shantytowns will finally be eradicated throughout the nation,” promised minister Abdelmadjid Tebboune. Over 561,000 at-risk homes on 12,000 different sites were identified throughout the country for demolition, to be replaced with public housing financed by the state. “At this time, 190,000 families have been relocated of which 40,000 in the capital of Algiers,” Tebboune said.

The rhythm of relocation beats records, while rehabilitation of old buildings continues to take place in over 20 districts in Algiers, with sealed façades, consolidated staircases, constructed wooden ramps and renovated elevators. To restore the capital’s image is also to restore its ageing old quarters—its buildings from the colonial era, its gorgons, mermaids and other precious decorative motifs from the Haussmannian styles that had made Algiers one of the most beautiful cities along the Mediterranean.

The buildings bordering its avenues recall the history of the city and its eclecticism—the neoclassical, art nouveau, art deco and neo-Moorish styles that exist side by side. Such is the meticulous and challenging work required by historic centers, which must be safeguarded.