Why Teboune should thank Nigeria for Algerian economy’s African ranking

Algeria’s President Tebboune has received a boon from Nigeria whose GDP shrunk to become the fourth largest African economy, ceding the third place to Algeria.

In what many observers see as an early electoral campaign, Tebboune gave half-economic truths as usual boasting that Algeria became the third largest African economy, thanks to his policies!

In reality, Algeria’s third place is owed to Nigeria’s policies. The most populous country in Africa has engaged in a currency devaluation policy that dipped its GDP, much to the delight of Tebboune and the military junta behind him, who sapped a four-year mandate without launching any significant project that could relieve Algeria of its endemic dependence on oil and gas.

Faithful to inflating figures, Tebboune said Algeria’s GDP now stands at 195 billion and is poised to hit $400 billion within two years.

While Algeria’s economy has been spared total collapse thanks to rising gas and oil prices following the outbreak Russian-Ukrainian war, Tebboune’s GDP figures have been inflated by an approach called “GDP rebasing.”

To boast a bigger GDP, Algeria changed the calculation methods to include its vast informal sector.

Artificially inflating the GDP was a decision taken in the wake of Algeria’s rejection from the BRICS club of emerging economies.

Another overlooked factor is the “Moroccan obsession” endemic to Algerian military rulers. To avoid being outpaced by Morocco, Algeria had to change its GDP calculation methods. Already in 2020, Morocco’s GDP per capita was higher than that of Algeria which has a faster population growth.

Instead of implementing painful reforms that will pay-off on the medium term, encouraging the private sector, fighting corruption, and diversifying the economy, Algeria’s addition to hydrocarbons worsens and its disinformation campaign will end by backfiring.

Tebboune keeps lying about the state of the Algerian economy. But he can’t hide the sun with one finger. Looking at the state of Algerian exports, oil and gas still represent over 95%. Algeria’s foreign exchange reserves are at about $67 billion at the expense of a drastic import cut policy that resulted in queues and shortages of all sorts.

Tebboune however needs achievements to build his electoral campaign on. Lacking concrete projects, he chose disinformation and manipulation.