ALGIERS, 24 February 2006 — Oil exporter Algeria will spend $80 billion to spur economic growth and address social needs between now and 2009 while trying to lessen its dependence on energy income, President Abdelaziz Bouteflika said yesterday. “We should seek alternatives,” he said in a speech to mark the 35th anniversary of the nationalization of the oil and gas sector, which accounts for about 97 percent of total exports.
“A total of $80 billion will be spent,” he said. “The money will be used for economic revival and also to carry out several projects including those intended for southern provinces.” Bouteflika spoke of the government’s investment plans in general terms and it was not immediately clear whether his $80 billion figure implied an acceleration in public spending. “Algeria’s economy has suffered because of its dependence on hydrocarbons,” he said, adding foreign debt would fall to $13.9 billion next month from $28.1 billion six years ago.
“Algerians should meet the challenge. It is the challenge of a whole nation. It is not possible that we continue to rely on the oil income. It is the sole sources of our revenues.” Officials at the Finance Ministry were not available to elaborate on the figure.
Last year, the government said it was carrying out a $60 billion five-year investment program to spur economic growth and rebuild infrastructure after a decade of civil war that cost an estimated 150,000 lives and some $30 billion.
Bouteflika said he also envisaged part of the money going on social projects in poor areas including the sparsely-populated but energy-rich Saharan desert region. He said social needs included housing and schools. He reiterated that the project would be financed by the state budget, ruling out resorting to foreign loans. Official data showed yesterday the trade surplus soared 119 percent to $3.3 billion in January versus $1.5 billion in the same month last year as the second largest African nation benefited from high crude oil prices.
“We are enjoying a good financial situation thanks to high oil prices. This helped the economy to grow further,” Bouteflika said. But he added: “Exports apart from hydrocarbons have not changed. It does not exceed $1 billion (a year).” Bouteflika said Algeria was cutting its foreign debt.
