Algeria passes budget encouraging foreign investment

Government plans to seek foreign loans after a decline in revenue from hydrocarbons

epa08062869 Algerians chant slogans as they march to protest a day ahead of the presidential elections, in Algeria, Algeria, 11 December 2019. Protesters are opposing presidential elections, scheduled for 12 December, as they see the five candidates running to replace Abdelaziz Bouteflika linked to the former regime.  EPA/MOHAMED MESSARA
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Algeria's interim president Abdelkader Bensalah on Wednesday signed a 2020 budget that includes public spending cuts but allows foreign investors to have majority stakes in projects involving the non-energy sector, the presidency said.

The budget also includes a government plan to seek foreign loans next year in a bid to cope with financial pressure after a fall in vital energy revenues.

The government is also under pressure from protesters demanding the cancellation of Thursday's presidential election designed to choose a successor to Abdelaziz Bouteflika who was forced out by mass demonstrators in April.

In an apparent bid to ease social pressure, the budget for 2020 kept politically sensitive subsidies unchanged at 8.4 per cent of gross domestic product.

Subsidies in the North African Opec member cover almost everything from fuel to basic foodstuffs and medicine.

Overall spending will fall by 9.2 per cent and the government plans further taxes to cope with a projected 7.2 per cent deficit.

The economy is expected to grow by 1.8 per cent next year, down from 2.6 per cent forecast for 2019, but the protests have created uncertainties for both Algerian and foreign investors amid government attempts to diversify the economy away from oil and gas.