Is the explosion in Algeria's GDP the end of economic backwardness?

{"text": "What surprised some people and then dissipated their surprise in the face of Algeria's progress, in recent years, most of the Arab and African countries and more than 50% of the world's countries, successively in terms of the life expectancy at birth index, food security index, and human development index, today, the same surprise is manifested towards the significant jump announced by the International Monetary Fund days ago regarding the Gross Domestic Product (GDP) of Algeria.(1), and the biggest surprise, even beyond borders, revolves around the statement of the President of the Republic, Abdelmadjid Tebboune, regarding the expected exceptional growth of the GDP, which he projected to reach $400 billion by 2026, during his regular meeting with representatives of national media on March 30, 2024."}
From the strangeness of it, the "critics" did not analyze or pass judgments regarding the exceptional leap that the size of Algeria's gross domestic product (GDP) has experienced. It started to leave the stage of running at rock bottom, where it had sunk since 2015 (165.979 billion dollars), after reaching its peak, which was historic in 2014 (213.809 billion dollars). This had a significant impact on the citizen in the form of a significant decline in per capita GDP, which dropped from 5493.551 dollars per person to 3700.770 dollars in the same period, from 2015 to 2021. Similarly, the following important recovery phase (2022-2024) did not attract attention, with a relative recovery in the fuel market, but the most important recovery occurred in the agricultural production, construction, and services sectors, with promising signs opening up all hopes in the high-value-added commodity production field, such as iron, steel, and cement, directed to the domestic market and the increasing exports to various markets around the world. This, in a positive and hopeful turn, reflected broader horizons, in the continuation of the acceleration of national wealth growth, expressed by the acceleration of general and per capita GDP growth, as reflected in the data for the years 2022, 2023, and 2024, as shown in the attached table.
The estimated reserves of phosphate ore in Algeria are about 22 billion tons, ranking third globally. By exploiting the mine starting from 2026, Algeria will become one of the top three countries in exporting phosphates and various fertilizers that are in high demand worldwide. This is supported by Algeria's availability of the three components for the production of these products (NPK) with the highest enrichment, which are nitrogen (N), phosphorus (P), and potassium (K). This is in contrast to competing countries that generally lack potassium or potash, which they have to import.
The slight difference between this number (5799.6) and the published number (5720) is due to a negligible difference in the population count.
On the contrary to the lack of interest or complete absence of it by "critics," both private and public, there was a jump of more than $42 billion between 2023 and 2024. However, the interest was exclusively focused, by specialists and the like, on their agreement regarding the impossibility of achieving the promise made by the President to achieve a GDP exceeding $400 billion by 2026. Yet, none of them attempted a comprehensive methodological proof for their arbitrary judgment. This left the non-specialized recipient perplexed between a rosy optimism and a pessimistic Swedish pessimism.
And in anticipation of a more comprehensive and conclusive methodological approach to refute their doubts, we will suffice with a reminder here of the objective elements that the skeptics have overlooked in the promise made by the President of the Republic to himself.
A- In the industry:
"Nord, for reassurance in an optimistic objective approach, important factors have not yet been included in the Gross Domestic Product evaluation to date, because they have not yet fully met the conditions of genuine objective integration, but their overall completion is imminent (3):"
– Algeria's reserves of phosphate are estimated at about 22 billion tons, ranking third globally. By exploiting the mine starting from 2026, Algeria will become one of the top three countries in exporting phosphates and various fertilizers that are in high demand worldwide. This is supported by Algeria's availability of the three components for the production of these products (NPK) with the highest enrichment, namely nitrogen (N), phosphorus (P), and potassium (K), unlike competing countries that generally lack potassium or potash, which they have to import.
– The zinc and lead mine "Tala Hamza" and "Amizour" in the province of Bejaia enable the extraction of two million tons of raw zinc annually, to produce 470,000 tons of zinc concentrate and 30,000 tons of lead concentrate starting from 2026. The prices of these minerals are increasing in the global markets, as the current price of one ton of zinc is $2271, and the price of one ton of lead is $1989.
The translation of the given text from Arabic to English is:
"Starting from 2021, the launch of exploration and mining for twenty-six (26) structurally-oriented projects with high added value in 25 states and in sensitive fields: copper, manganese, salts, polymetallites, heat-resistant metallic raw materials, bentonite, feldspars, sulfur, lithium, semi-precious stones, and metallic quartz(4), which will undoubtedly serve the objectives of economic diversification, integration, balance, and independence."
– The Gara Djebilet iron mine will enter the export phase in 2026 with annual exports ranging from $10 to $14 billion in iron ore, without being directed towards the production of various iron products in Algerian factories such as iron compounds currently existing in El Hadjar, Annaba, Blara, Jijel, Arzew, Oran and in the iron and steel complex project of Béchar.
– The iron and steel complex in Béchar will enter the production phase in 2026 with a capacity of two million tons of construction iron and railway alloys that Algeria currently imports. Construction work has started on the first industrial unit of this complex.
– The production capacity of the Qatari/Algerian iron and steel complex in Bellara-Jijel will be doubled starting from the beginning of 2026, increasing the current annual production from two million tons to four million tons.
– The cement plant in the Jelfa province will enter the production phase with a capacity of five million tons, which will increase the national cement production to 45 million tons annually, sharing the Arab leadership with Egypt in cement production.
– Algeria's natural gas exports will double by 2026, as promised by Algeria itself, in implementation of the directive of the President of the Republic, which he issued on the occasion of the opening of the 30th National Production Exhibition in 2022, to reach 100 billion cubic meters as exports of its natural gas, by doubling its production at that time. In this context, Algeria's natural gas production reached the level of 136 billion cubic meters at the end of 2023, as we have seen above, which represents 33.34% of the President of the Republic's instructions, and this within one year, or it promises a doubling of gas exports without difficulty.
- The launch of mining and exploration has been programmed starting from 2021 for twenty-six (26) structured projects with high added value in 25 states and in sensitive fields: copper, manganese, salts, polymetallics, heat-resistant mineral raw materials, barytes, feldspars, sulfur, lithium, semi-precious stones, and mineral quartz (4), which will certainly serve the goals of economic diversification, integration, balance, and independence, thereby increasing national wealth, i.e., raising the general and individual GDP levels with important partial effects by 2026 through manufacturing and/or exporting as raw materials and/or processed products.
The discovery of "lithium" in recent days in Algeria as one of the rare earths, as Algeria owns 20% of it in the global reserve, opens up vast prospects for the electric car industry, smartphone components, computers, and other electronic products, which greatly stimulates interest in foreign investments in Algeria.
- The "Katama" compound in Jijel will enter the production phase of table oil, the largest in the Arab world (400,000 tons annually), at the beginning of summer 2024.
- The sugar factory in Khemis El Khechna - Boumerdes will also enter the production phase with two thousand (2000) tons per day, in early next summer (2024).
– Gradual restart of dozens of public factories that have been victims of arbitrary privatization or those that have significantly reduced their production capacities and vertical and horizontal activities or have suspended their activities, until production capacities are restored.
It can be said, with certainty, that this program alone can set the conditions for raising national wealth. That is, raising the general and individual GDP, with immediate partial effects by 2026, through the manufacturing and/or exporting of goods in the form of raw materials and/or finished or semi-finished products.
{"sl":"Arabic","text":"وخلال خطابه الذي ألقاه بمناسبة العيد العالمي للشغل في أول ماي الماضي (2024)، أعلن رئيس الجمهورية، بارتياح كبير، عن مؤشرات تفيد بتسجيل تحسينات مسرة عرفتها بنية (هيكلة) الناتج الداخلي الإجمالي للجزائر. وأوضح الرئيس، أن هذا التقويم المذهل قد تم تسجيله لأول مرة منذ انهيار محتوى الصناعة في الناتج الداخلي الإجمالي طوال الفترة الممتدة من 1986 إلى غاية 2021، ليغادر اليوم هذا الركوض في الحضيض والذي دام كل هذه الفترة في نسبة تتراوح ما بين 3 و5 %، إلى وضعية أحسن نسبيا، وأكثر تفاؤلا لتبلغ اليوم ما بين 8 و9 %. وهذا ضمن حركية ستؤدي أولا إلى تدارك نسبة 16 إلى 18% التي كانت قد بلغتها في سنة 1985، لتطمح بعدها، إلى بلوغ نسبة ما بين 18 و23 % التي تطبع اليوم، اقتصادات الدول الصناعية، عموما.(5)","tl":"English"}
The current industrial calendar program in Algeria, which has harnessed heavy industrial investments that we have mentioned before, and the expected foreign direct investments from the high stimulation caused by the new legislation in this field (Law No. 22-18 dated July 24, 2022), which will allow for this fully in the medium term.
"On the same occasion, the President stated that the current contribution of agriculture to the Gross Domestic Product (GDP) is approximately 18% (which he hopes to increase to 30%), compared to 9% to 12% over the past 32 years."
The recent discovery of "lithium" in Algeria, as one of the rare minerals, with Algeria owning 20% of it in the global reserve, opens up vast opportunities for the electric car industry, as well as for the components of smartphones, computers, and other electronic products. This greatly stimulates foreign investment interest in Algeria.
Even if this content continues to rise, it will eventually decline under the effects of creeping agricultural manufacturing, tending towards content established in industrial economies that are also advanced in agriculture, in various forms. This (agricultural) content will decline to about 2-3% of the GDP, which includes, at that time, a high content of agricultural-industrial production (manufactured agriculture), which was previously included in the initial agricultural content. A historical comparison of this phenomenon in currently highly industrialized countries, as well as in countries that have reached a very advanced stage of industrialization, clearly confirms this trend, with very few isolated exceptions justified by exceptional economic history, as reflected in the well-known case of South Korea among specialized economists.
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