Algeria Is Losing Ground in Africa

A laborious updating

On January 30, 2017, a majority of African countries voted to allow Morocco back into the African Union despite Algerian (and South African) opposition over the question of Western Sahara. The diplomatic ties which Algeria owed to the prestige of its war of independence are gradually distending and the country is losing ground in Africa, a situation due as much to its isolationist economic policies as to ailing President Abdelaziz Bouteflika’s absence at international forums.

In Algiers, a former diplomat was rather sarcastic about the way the Algerian media minimised the importance of Morocco’s return to the African Union (AU): “It may not be the great diplomatic victory which the Moroccans claim, but for Algeria it is a serious warning sign. Our traditional diplomatic levers, based on the aura of the war of independence and the direct aids we’ve provided have lost their clout”.

Indeed, while Algeria still has strong support from South Africa and its neighbours in memory of Algiers’ militant solidarity with the African National Congress (ANC) under Apartheid, its presence in the countries of West Africa has dwindled, whereas Morocco has stepped up its economic and financial activities there to further its diplomacy.

Incoherent Economic Policies

Algeria’s political progress was halted in the nineties by civil war. Bouteflika has been in power since 1999 and from that date on, the country has been stuck in a status quo made possible by the oil revenues. And Algerian policies in Africa over the last two decades have faithfully echoed this inertia.

For want of an aggiornamento, the authorities continue to field a diplomatic apparatus which no longer has the means to revive the bonds forged during the war of independence. And yet the warning signs are not new. “Our African strategy having been based on our policy of sharing a part of the oil rent, it collapsed when the rent began to give out, as the President” were the prophetic words 2012 of Mourad Goumiri, chairman of the Association of Algerian Academics for the encouragement of studies in National Security (ASNA).1

The country’s economic policies have been incoherent as well. Unwilling to open up the oil and gas sector by granting concessions once again—as provided for in a 2003 draught law on hydrocarbons2—the authorities opted instead, in 2009, for a policy of “economic patriotism”, applying a 51/49% rule on investments by foreigners, thought to be dissuasive.

They also failed to take advantage of the opportunity afforded by the accumulation of petrodollars to acquire new positions in the economies of their African neighbours. In Algiers, the idea of setting up a sovereign wealth fund was constantly dismissed on the principle that it was imperative to act within the country—where there was indeed a lot to be done—rather than go out and acquire liquid financial assets abroad.

While direct public aids to African countries have tended to decrease, efforts to replace them with private investments have been bridled on the whole —that remarkable achievement, the Transsaharan Highway, to the contrary. The law on money and credit of 2003 allows currency to leave the country for investment purposes, but this still requires an authorisation from the Bank of Algeria which is generally not forthcoming.3 For years now, business operators like Issad Rebrab, head of Cevital, Algeria’s largest private group or Slim Othmani, head of NCA Rouïba have been complaining about the barriers which they claim prevent Algeria from reaching foreign markets.

In November 2014, the Bank of Algeria published a new ruling which “authorised” Algerian companies to invest abroad. But with new restrictions not mentioned by the ruling: the investment must be connected with the activities of the economic operator under Algerian law. This rule, known as that of “the complementarity of activities” was not well received because it actually toughens a law which had been passed but never applied until now, as Slim Othmani puts it. He believes that Algeria, like South Africa, can become a “locomotive” for African economies by reason of its central geographic location. However, he adds, while the locomotive is ready to roll, its drivers are not.

The weight of the private sector is growing, and it might have seized some of the opportunities arising across Africa, but in practise its activities are confined to the national territory. The Algerian government has thus effectively prevented itself from updating its “economic diplomacy”.

Communication Deficit

Economists in Algiers were appalled by the announcement made in March 2013 of the cancellation of 902 million dollars in debts held against fourteen countries belonging to the African Union (AU). As Amar Belani, spokesperson for the Foreign Ministry, pointed out in a press release: “this concrete form of assistance is part of a policy of African solidarity and demonstrates the Algerian government’s determination to assume in full its commitment to the continent’s economic and social progress”.4

While there is no denying the imperative of solidarity, especially with subsharan countries, some feel that money could have been converted into investments. “It’s all very well to come to the aid of poor countries in the name of our feeling of solidarity. But between States, there are no such feelings, there are only questions of interest and I am not sure that in this matter our country is looking out for its interests, Mourad Goumiri declared. “The President must have been acting like the head of some clan and indulged in this gift for his own glory and personal renown.”5

Three years later, in more diplomatic terms, Mohamed Ould Noueigued, CEO of the Central Bank of Mauritania, voiced a similar opinion when he deplored the lack of publicity surrounding Algeria’s cancellation of these debts. In an interview with Maghreb émergent declared: “Only the ministers of those African countries know about Algeria’s generosity, but not the people. Algeria makes these gestures without compensation and without publicity, when today’s world belongs to those who ‘communicate’.” Those cancelled debts “might have been converted into investments in the countries involved which would have created jobs and the buzz would have been it was thanks to Algeria.”6

Worse still, during the African Forum for Investments and Business, held in Algiers from 3-5 December 2016, Algeria’s guests witnessed a startling blunder over precedence between Algerian speakers. Prime Minister Abdelmalek, followed by all his ministers, got up and left the hall when the leader of the federation of industry, Ali Haddad, a close friend of the President’s brother, jumped the queue as it were, taking the floor ahead of the Minister of Foreign Affairs, Ramtane Lamamra. The incident, which was widely publicised and described by El-Kadi Ihsane, editor of Maghreb émergent, as “the host country’s attempt at suicide,” completely overshadowed the significance of the encounter and the avenues it opened up.

And we might add the paradoxical message conveyed by the wave of arrests of African immigrants, condemned by human rights NGOs, which took place on the forum’s opening day. “In spite of the political pollution, Algerians were somewhat taken aback to discover that the standards of globalised African elites are higher than our own. And on a wide range of issues: multilateral governance, negotiation of regional exchanges, choice of projects, digital transformations,” Ihsane El-Kadi emphasised.7

An Absent President

Rantane Lamamra’s appointment as “Monsieur Afrique” to the Foreign Ministry in 2013, at a time when the Sahelian issue was a source of considerable worry, restored a little lost lustre to Algeria’s African policies. But did not solve the major problem raised by the frequent unavailability of President Bouteflika, whose poor health dictates the country’s political agenda. Abdelaziz Rahabi, former minister and ambassador, threw in his lot with Ali Benflis, Bouteflika’s challenger in the last presidential election, has been hammering it home for ten years now: the President has made Algeria lose its bearing in Africa. “Bouteflika has never made an official visit to the Sahel. A country’s image depends on its economic successes and its political stability. Bouteflika’s main concern is that Algeria be identified with his own image...” he wrote in the columns of Liberté in September 2013, when the regime was making ready for the president’s controversial fourth term.8

That Bouteflika’s state of health has consequences for the workings of the State and the country’s foreign policy was illustrated last February 20 when a visit by chancellor Angela Merkel was cancelled at the last minute on account of a “temporary disposition” due to “acute bronchitis.” On Monday, February 27, during the Radio M. program “Café presse politique”, the issue of the President’s health and its impact on the country’s foreign policy came up again. Abed Charef, journalist and author, made the point that the declaration on Libya, signed in Tunis on February 20, 2017, by Algeria, Tunisia and Egypt9 would have carried far more weight had it been marked by a meeting of heads of State, which our President’s poor health made problematic.

The problem, El-Kadi Ihsane points out, is that the President’s absences at international conferences occur at a time when, because of the international crisis, we tend to return to a strong personification of the national image. “It’s a step backwards, he acknowledges, but the fact remains that a nation’s policies today are embodied: Vladimir Poutine, Recep Tayyip Erdogan, Donald Trump, the President of China… the King of Morocco is the bearer of Moroccan diplomacy throughout Africa, even through he may fall ill now and again, and be obliged to cancel a visit as happened last February 21 when he was unable to travel to Mali. President Bouteflika’s absence in a world where the images and policies of a country are embodied by such strong personalities is very much a problem.”

1Quoted in Adlène Meddi, Mélanie Matarese, « Géopolitique : comment Alger a perdu l’Afrique », El Watan, November 2, 2012.

2EDITOR’S NOTE. Submitted by the Minister of Energy and Mining, Chakib Khelil, this draft law, meant to provide a more attractive environment for foreign investors, was withdrawn following loud protests from the hydrocarbon sector and parliamentary circles. After being put on ice for a time, it was enacted in March 2005 by a quasi-unanimous vote in the People’s National Assembly (PNA).

3« Géopolitique : comment Alger a perdu l’Afrique », op. cit.

4Mourad Arbani, « L’Algérie annule la dette de 14 pays africains », Algérie 1, May 29, 2013.

5Amrane Mahfoud Medjani, « Mourad Goumiri : ces décisions intempestives risquent de se retourner contre nous », El Watan, June 21, 2013 (archive re-posted at djazairess.com).

7« Gouvernement-FCE : l’isolationnisme économique algérien s’est acheté un Tchernobyl à Club des Pins », El Watan, December 12, 2016, available in Revue de presse FCE, p. 6.

9This declaration is aimed at an overall political settlement in Libya, in support of inter-Liyan consensual propositions tending to apply the Skhirat agreement signed on December 17, 2015. The signatory countries reaffirm their commitment to pursue reconciliation efforts within the framework of an inter-Libyan dialogue, excluding no one.