Algeria to cut spending and energy investment, delay projects


ALGIERS (Reuters) – Algerian President Abdelmadjid Tebboune on Sunday ordered the government to cut public by 30% and delay state projects to cope with financial pressures, the presidency said in a statement.

Tebboune also asked the state energy firm Sonatrach to reduce planned investment to $7 billion from $14 billion, the statement said, after a cabinet meeting to discuss state finances and the global oil market after a collapse in the price of oil.

Oil and gas revenue accounts for 60% of the state budget and 94% of total sales abroad.

Article continues below Advertisement...

Tebboune said Sunday’s measures were aimed at “saving foreign currency ”.

Declines in energy revenues have caused ’s foreign reserves to fall to $62 billion now from $72.6 billion in April last year, $79.9 billion at the end of 2018 and $97.3 billion in December 2017, according to official data.

“We need to build a new that does not rely on oil,” the statement quoted Tebboune as saying during the meeting.

A large part of the energy earnings are being used to pay for imports of food and other goods, estimated at $45 billion annually, despite import .

The government has $41 billion of spending on purchases from abroad in 2020 but Tebboune on Sunday instructed it to reduce the bill to $31 billion.

Elected in December, Tebboune has vowed to carry out political and economic reforms to meet demands from demonstrators who have been staging mass protests since early last year that led to the resignation of long-time president Abdelaziz Bouteflika.

The government has already approved a 9.2% spending cut for 2020 but kept sensitive subsidies on basic foodstuffs, fuel, housing and medicine unchanged to avoid social unrest.

Sectors such as education and health will not be affected by the new cuts in public spending, the statement said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Please enter your comment!
Please enter your name here