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Tuesday, October 26, 2021
The Prime Minister, Minister of Finance, Aïmene Benabderrahmane has announced that the Algerian government intends to give up the profits of the two major state energy companies Sonatrach and Sonelgaz to allow them to reinvest and expand their activities. Other public companies will also benefit from this policy amendment.
The move came during the debate on the Finance Bill (PLF2022) and in response to questions from AFN deputies concerning the origins of the budget deficit. Mr. Benabderrahmane stated that the Government expects a drop in exceptional income, in particular profits from public enterprises such as Sonatrach and Sonelgaz.
As such, the Prime Minister affirmed that the State has decided to renounce the benefits of Sonatrach and Sonelgaz to allow them to reinvest in their fields of activity.
To offset the deficit by this move, Benabderrahmane says that the Government “will not resort to printing money or to external debt.”
He also indicated that the benchmark price of a barrel of oil has been set at 45 dollars, while the price of a barrel is currently around 85 dollars. Thus, the Revenue Regulation Fund, into which this surplus will be paid, “will contribute to the absorption of this deficit.”
“Algeria is one of the few countries in the region where domestic debt is at low levels, and which did not have recourse to external debt during the period of the health crisis despite its repercussions on world economies, thanks to the measures adopted by the public authorities in this area,” he continued.
Regarding the revision of the subsidy policy, the Prime Minister specified that the Government “will not decide, alone, the modalities of revision of this policy,” noting “the adoption of a participatory approach to this effect, on the basis of a scientific study advocating a return to the equitable distribution of wealth.”
Translation: APS
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