Parliamentarians in Algeria have passed a new investment law to spur economic growth in the country.
The country’s parliament approved the law on Sunday, in the hope that it will eventually improve the business climate especially at a time that Algeria has been hit by low crude prices.
“We want to put in place stable, transparent and coherent legislation to ensure efficiency on the ground,” Industry Minister Abdesselam Bouchouareb told parliament.
We want to put in place stable, transparent and coherent legislation to ensure efficiency on the ground
The north African economy is heavily dependent on oil and gas revenues but energy earnings in the country have dropped by almost 50 percent.
The law, due to be effected by end of this year, stipulates tax cuts and steps to reduce redundancy. However, analysts say it does not address a key obstacle cited by interested foreign investors, that of requiring local partners to hold a majority stake in new investment projects.
Some of the main areas the law has focused on is industry, agriculture and tourism the three main sectors that Algeria is seeking to grow, in order to diversify its economy away from oil.
In May, authorities in the country devised a plan to move away from oil and gas which accounts for 95 percent of export revenues and 60 percent of the state budget.
Under the new plan which will be implemented over the next 3 years, the state is seeking to increase the role of the private sector, boost foreign investment and ease the country’s business environment that is hampered by red tape.
The International Monetary Fund (IMF) had earlier called on Algeria to diversify its economy adding that if well managed, the current economic situation in the country offers an opportunity to reshape its growth model.