“We should put an end to the production model as most manufacturers have not improved their integration rates, he told the press after speaking to MPs.
While venting his frustration at a failed industrial policy set by his predecessors, the Minister failed to consider the deep causes of the low integration rates in Algeria, which lie deep in a legal framework interactive to foreign direct investments
The perception of Algeria’s unfriendliness towards foreign investors is worsened by recent investment reforms that left unchanged a rule requiring 51% of national ownership of any projects.
The 51/49 rule provides that at least 51% of the shares of Algeria-based companies must be owned by Algerian nationals residing in Algeria or by companies which are wholly-owned by Algerian resident shareholders.
The archaic banking system has also been pushing investors away. Algeria’s banks remain state-dominated and highly corrupt thus thwarting foreign direct investments.