Algeria, 02 November 2006— The International
Finance Corporation, the private sector arm of the World Bank Group, signed
a technical assistance agreement recently with Algeria’s government, represented
by the Minister of Investment, to simplify the country’s business procedures.
The project will be managed by IFC’s regional facility, the Private Enterprise
Partnership for the Middle East and North Africa.
IFC will help Algeria’s government simplify business procedures to reduce
bureaucratic obstacles at the national as well as the regional level. The
objective is to decrease the cost and time of business procedures, promoting
flows of foreign and domestic investment. The World Bank Group funded project
will focus on a pilot center in Blida, with the longer-term goal of rolling
out new procedures to centers across the country. IFC’s facility, PEP-MENA,
will collaborate closely with a wide range of Algerian government ministries
and the National Agency for Investment Promotion.
Abdelkader Allaoua, Associate Director at IFC, commented, “This project
is the result of a fruitful dialogue between the Algerian government and
the World Bank Group, which started in December 2005 in an effort to improve
Algeria’s ranking in the Doing Business report. During the last few months,
we have worked closely with the Ministry of Investment and the task force
constituted by representatives of the different ministerial departments,
to identify tangible measures that will improve Algeria’s investment climate.
This collaboration first evolved in a technical assistance package by the
World Bank Group, which allowed to identify the necessary regulatory and
legal measures to improve Algeria’s ranking. Today, this collaboration
concretely resulted in IFC’s technical assistance project to simplify
investment procedures through the National Agency for Investment Promotion.
These projects represent the government’s commitment to engage in important
reforms and attract new investments to the country.”
Hamoud Benhamdine, the general director of investments and external economic
relations at the Ministry of Investment, commented “the Ministry continues
to be committed to the improvement of Algeria’s investment climate and
the country’s image as an attractive location for foreign investment.
The investment reforms already introduced are certainly important, but
not sufficient to increase investments to the levels of Algeria’s potential.”
Algeria has been experiencing relatively strong economic growth, with GDP
rising an average of 6.3 percent between 2001 and 2005. Over the last five
years, the government has engaged in important reforms that have reinforced
the growth potential of the country’s private sector. But the World Bank
Group’s 2007 Doing Business report, which compares the ease of
doing business in 177 countries, ranks Algeria 116th overall and 120th
in terms of business start-ups. Despite the country’s important energy
resources and the government’s reform efforts towards an open economy,
Algeria’s private sector is still characterized mainly by small enterprises,
whose contribution to the country’s growth is insufficient. In addition,
improving Algeria’s investment climate is necessary for Algeria to realize
its growth potential beyond the hydrocarbon sector.
The International Finance Corporation, the private sector arm of the World
Bank Group, is the largest multilateral provider of financing for private
enterprise in developing countries. IFC finances private sector investments,
mobilizes capital in international financial markets, facilitates trade,
helps clients improve social and environmental sustainability, and provides
technical assistance and advice to businesses and governments. From its
founding in 1956 through FY06, IFC has committed more than $56 billion
of its own funds for private sector investments in the developing world
and mobilized an additional $25 billion in syndications for 3,531 companies
in 140 developing countries. With the support of funding from donors, it
has also provided more than $1 billion in technical assistance and advisory
services. For more information, visit www.ifc.org.
PEP-MENA is IFC’s technical assistance facility that supports private
sector development in the Middle East and North Africa. PEP-MENA focuses
on improving the business enabling and regulatory environment; strengthening
the financial sector; promoting the growth of small and medium enterprises
and their support services, such as business organizations and consulting
firms; helping restructure and privatize state-owned enterprises; and developing
viable private sector and public-private partnership projects, especially