Algeria stands at a crossroads
Published : Wednesday 18 January 2017 - Jean-Louis Guigou, président de l’Ipemed
This analysis written by Jean-Louis Guigou, President of Ipemed, was published in various media in December 2016, in France, in La Tribune, in North African countries in the Huffington Post Maghreb and in Algeria in Maghreb Emergent.
Algeria is about to become a great power in the Mediterranean and in Africa. The economy and the mentalities are undergoing deep changes, without inopportune disruptions. For Algerians, an ambitious and historical vision of their country is emerging, but this vision must also make sense for Mediterranean, African and European populations.
Algeria is taking two paths that are crossing its territory. The first path is that of North African industrialisation, from Egypt to Morocco, with Algeria at the centre. The second path, following a North-South axis, is that of the Trans-Saharan Dorsal, from Algiers to Lagos, that will contribute to the development of Sahel, while connecting North Africa to Sub-Saharan Africa.
The first path is horizontal. It represents North African industrialisation, from Egypt to Morocco. Since 1980, nearly all Southern and Eastern Mediterranean countries have been industrialising. They replaced importations by interior production (cars, mechanics, capital goods, etc.). Morocco, Tunisia, Lebanon, Turkey and Jordan (1) smoothly became exporters of manufactured products, machines, transport equipment, etc.
Algeria is aware that it needs to catch up with its neighbours and is boosting its economic diversification. Business managers and the private sector are increasingly making their voices heard. Industrial diversification is at the core of reflections and propositions. Assembly industries (automotive and technical), basic industries (steel industry and petrochemistry) as well as agri-business, pharmaceutical and digital industries are now considered as a priority.
With a central position thanks to its geographic location and the abundance of its raw material and energy resources, Algeria is progressively taking part in North African industrialisation.
Indeed, we can observe a broad historical movement that places North Africa as a great industrial zone that is complementary to Europe. The 21st century Rhur could develop in North Africa. This industrialisation movement in the South is firstly due to the incredible dynamism of local entrepreneurs, which leads the Germans (2) to wonder “Will Africa be the Asia of the 21st century?”.
European entrepreneurs are starting to understand the benefits of North/South coproduction and partnership on their value chain and therefore help this industrialisation movement. This strategy enables them to benefit from cultural and geographic proximity as well as from the complementarity between mature and ageing Northern countries and young emerging Southern countries. Finally, China is also boosting this movement as the country will relocate 85 million manufacturing jobs in Africa (3) and set up on the Southern shore of the Mediterranean to supply Europe. This movement is irreversible - The capital is at work. This is why Algeria intends to take advantage of this movement. Besides, its mining and human resources and its African roots give the country a strategic role. This first industrialisation path is all the more so relevant to engage the country as it intersects with a second North/South path that Algerians want to (and will) build.
The second path, which is under construction, is a North/South vertical path. It represents transports, communication logistics, gas connections and Sahel development. A great axis is under construction from the new Cherchell harbour, on the western side of Algiers, towards Tamanrasset, going through Niger, Mali and finishing at Lagos (Nigeria). It is another major infrastructure project similar to Hamburg harbour that requires an investment of about 3 billion and the cooperation of the Chinese. It is a new version of the Trans-Saharan but this time it is equipped with industrial zones, free-trade zones, science parks and industrial clusters. A real dorsal that will connect North Africa to Sub-Saharan Africa, the economy of which is booming.
To carry out this great geopolitical project of an Algeria standing at a crossroads - that of industrialisation in the Euro-Mediterranean space, but also of a North/South African anchoring, three obstacles must be overcome:
The first one is to bring back “its” Algerian elites from France, Europe and North America (Silicon Valley). India widely used the return of its diaspora by entrusting them with the development and management of science parks, industrial and free-trade zones (Bangalore), thus making of India a giant science park that works in collaboration with American businesses.
The second difficulty is to find a way towards integration and cooperation with other North African countries, and especially Morocco. The Maghreb Union could therefore represent an integrated economic area of 100 million inhabitants, a real industrial and logistics platform towards Sub-Saharan Africa.
Finally, the third difficulty is to finally reconcile France and Algeria, two friendly nations. By building together a great historical project of “Algeria at a crossroads”, the two countries could finally trust each other again. Algeria and France are to the Mediterranean what Germany and France are to Europe: warring brothers that must become friends again to build their future together, but also the future of the Africa-Mediterranean-Europe region, by transforming North/South relationships in trustful relationships based on coproduction and generalised mobility.
Nature of exportations since 1980 and share of exportations by product type
(1) J-L.Guigou, Michel Gonnet, Thibault Fabre. Etude IPEMED – l’Industrialisation du Nord de l’Afrique de l’Egypte au Maroc compatible avec la réindustrialisation de l’Europe. November 2016
(2) Christian Hiller Von Gaertringen - « Afrika Ist Das Neue Asien- Ein Kontinent im Aufschwung » 2014 Hoeffmann Undcampe
(3) China’s rise and structural transformation in Africa – Opportunities for Africa from China’s Rise. Oxford Handbook of Africa and Economics : Policies and Practices edited, Celestin Monga, Justin Yifu Lin, 2015.