Economy

Algeria’s Foreign Reserves Decline by $30b

Published

9 years ago

21/03/2017

Modupe Gbadeyanka

By Modupe Gbadeyanka

The International Monetary Fund (IMF) says Algeria continues to face important challenges posed by lower oil prices, leaving its foreign reserves falling by $30 billion to $113 billion.

From March 7 to 20, 2017, an IMF team led by Mr Jean-François Dauphin, visited Algiers to hold discussions for the 2017 Article IV consultation.

Discussions focused on the appropriate mix of policies to adjust to lower oil prices.

Mr Dauphin noted that Algeria’s overall economic activity was resilient, but growth in the non-hydrocarbon sector slowed under the effects of spending cuts and is estimated at 3.4 percent in 2016.

He said further that inflation increased from 4.8 percent in 2015 to 6.4 percent in 2016 and stood at 8.1 percent year-on-year in January 2017.

Also, he observed that unemployment increased to 10.5 percent in September 2016 and remains particularly high among the youth (26.7 percent) and women (20.1 percent).

But despite some fiscal consolidation in 2016, the fiscal and current account deficits remained large, and public debt increased.

“Efforts to adjust to the oil price shock are underway. The authorities achieved a notable reduction in the fiscal deficit in 2016 and have adopted an ambitious fiscal consolidation plan for 2017-19. They made progress improving the business environment and are working on a long-term strategy to reshape the country’s growth model to foster greater private sector activity and economic diversification. The central bank is adapting its monetary policy instruments to a tighter liquidity environment. This growing reform momentum is welcome.

“A key challenge at this juncture is choosing a policy mix that will help the economy adjust to the oil price shock in a way that is sustainable and the least costly in terms of growth and employment.

“Fiscal consolidation will need to be sustained as oil prices are expected to remain low and hydrocarbon reserves are exhaustible. At this stage, the consolidation should rely primarily on broadening the tax base, including through better tax enforcement and the rationalization of tax exemptions; containing current spending; gradually replacing costly energy subsidies, which mostly benefit the well-off, by direct support to the population most in need; and improving the efficiency of capital spending and reducing its cost. Investment in health, education, and well-targeted social safety nets should be preserved. These efforts should be supported by further strengthening the budget framework and closely monitoring growing fiscal risks.

“Too abrupt a fiscal deficit reduction, however, should be avoided to reduce the risk of a sharp slowdown in growth. In the mission’s view, given the relatively low level of public debt, Algeria could afford a somewhat more gradual fiscal consolidation than entailed in the current medium-term budget framework if it were to consider a broader range of financing options, including external borrowing and the sale of state assets,” Mr Dauphin said.

He said further that, “Th e mission strongly supports the authorities’ objective to decrease the economy’s dependence on hydrocarbons and unleash the potential of the private sector. This is not only needed to adjust to lower oil prices but also to ensure a sustainable source of job creation even beyond the horizon for proven oil and gas reserves. Achieving this goal will require wide-ranging structural reforms. Measures are needed to improve the business environment and access to finance, strengthen governance and transparency, make the labor market more effective, ensure that skills produced by the education system and sought by students match the needs of employers, foster greater female participation in the labor market, and further open the economy to foreign investment. The overall strategy should be designed and sequenced so that reforms reinforce each other and the burden of economic adjustment is shared equitably. Action should be timely as structural reforms take time to bear fruit.

“Exchange rate, monetary, and financial policies should support the adjustment. Further efforts to bring the dinar in line with fundamentals, combined with steps toward the elimination of the parallel foreign exchange market, would support fiscal and external adjustment. The Bank of Algeria is appropriately introducing open market operations, which should become its main monetary policy tool. The Bank of Algeria will need to stand ready to tighten monetary policy in light of growing inflationary pressures. Based on preliminary data, the banking sector as a whole remains adequately capitalized and profitable, but the oil price shock has increased liquidity, interest rate, and credit risks. It is therefore important to accelerate the transition to a risk-based supervisory framework, enhance the role of macro-prudential policy, strengthen the governance of public banks, and develop a crisis resolution framework.”

Mr Dauphin disclosed that during the visit, his team met with Finance Minister Hadji Baba Ammi; Industry and Mines Minister Abdessalem Bouchouareb; Acting Trade Minister and Housing and Urban Development Minister Abdelmadjid Tebboune; Education Minister Nouria Benghebrit; Labour, Employment, and Social Security Minister Mohamed El Ghazi and the Governor of the Bank of Algeria, Mohamed Loukal. The mission also held discussions with other senior government and central bank officials as well as with representatives of the economic and financial sectors and civil society.

Economy

NGX Diarrhoea Persists, Further Loses 1.57% Amid Panic Sell-Offs

Published

7 minutes ago

30/06/2026

Dipo Olowookere

By Dipo Olowookere

Panic sell-offs by investors have left the Nigerian Exchange (NGX) Limited losing weight very fast, as it further gave up 1.57 per cent on Monday.

Yesterday, only 17 equities ended on the advancers’ log, while 45 equities finished on the laggards’ chart, representing a negative market breadth index and weak investor sentiment.

All the major sectors of the bourse tasted defeat during the session, with the insurance counter down by 1.33 per cent. The banking space lost 1.22 per cent, the consumer goods index depreciated by 0.63 per cent, the industrial goods segment shed 0.39 per cent, and the energy sector tumbled by 0.06 per cent.

Consequently, the All-Share Index (ASI) stumbled by 3,682.70 points to 228,366.32 points from 232,049.02 points, and the market capitalisation slipped by N2.363 trillion to N146.542 trillion from N148.905 trillion.

Learn Africa lost 10.00 per cent to close at N9.00, MTN Nigeria also declined by 10.00 per cent to N747.00, Unilever Nigeria crashed by 10.00 per cent to N126.00, Austin Laz dropped 9.94 per cent to settle at N3.17, and Universal Insurance dipped by 9.90 per cent to quote at N28.12.

Conversely, Sovereign Trust Insurance gained 4.08 per cent to end at N2.04, Cornerstone Insurance chalked up 3.45 per cent to trade at N6.00, Neimeth appreciated by 3.03 per cent to N8.50, Livestock Feeds climbed by 1.92 per cent to N7.95, and C&I Leasing grew by 1.90 per cent to N5.35.

Business Post observed a surge in activity level on the first trading day of this week, with the trading volume, value, and number of deals up by 156.37 per cent, 137.50 per cent, and 38.50 per cent.

This was because market participants transacted 996.5 million stocks worth N43.7 billion in 61,813 deals on Monday compared with the 388.7 million stocks valued at N18.4 billion traded in 44,631 deals last Friday.

Ikeja Hotel exchanged 305.5 million shares for N13.2 billion, Access Holdings sold 289.9 million equities worth N6.6 billion, Dangote Sugar traded 29.4 million stocks valued at N1.9 billion, Chams transacted 22.0 million shares worth N87.9 million, and Zenith Bank traded 21.2 million equities for N2.4 billion.

Economy

Oil Prices Climb Over 1% as Fragile US-Iran Truce Faces New Concerns

Published

55 minutes ago

30/06/2026

Adedapo Adesanya

By Adedapo Adesanya

Oil prices settled higher by more than 1 per cent on Monday after attacks by the United States and Iran underscored ‌the fragility of their interim peace deal.

Brent crude futures gained $1.16 or 1.61 per cent to sell at $73.15 a barrel, while the US West ⁠Texas Intermediate (WTI) crude appreciated by $1.52 or 2.2 per cent to $70.75 per barrel.

The latest price movement appears to suggest that the market is concerned about a reduction in tanker traffic through the Strait of Hormuz following attacks on two commercial vessels on Thursday and Friday last week, and a further flare-up over the weekend.

The Thursday attack on the container ship Ever Lovely prompted some shipowners to pull back and wait for additional information about how safe transiting the Strait is. The US military on Friday carried out strikes on Iran in response to the attack on the vessel.

On Saturday, an Iranian attack on a Panama-flagged oil tanker, Kiku, while it was transiting the Strait of Hormuz, prompted additional strikes by the U.S. forces.

After the flare-up this weekend, the US and Iran appear to have agreed to cease attacks ahead of tentatively planned new talks this week.

Iranian and US technical teams working on the implementation of an interim peace deal are expected to meet in Doha in the coming days, even after both sides carried out strikes over the weekend that threatened to derail the accord.

Iranian Deputy Foreign Minister Kazem Gharibabadi said Iranian and Omani experts will start talks on redefining transit paths through the Strait of Hormuz in the coming days, adding that his country will try to obstruct vessels outside of defined paths.

Analysts cautioned that traffic through the strait is far from being fully recovered, helping keep prices somewhat elevated as outbound Persian Gulf crude exports are quickly rebounding to at least 75 per cent of pre-war levels.

Middle East producers are pushing ahead with loading oil and Liquefied Natural Gas (LNG) despite fresh ship attacks ⁠in the Strait of Hormuz and renewed strikes between the US and Iran in recent days.

Saudi oil giant Aramco resumed crude oil loadings on Friday at its Ras Tanura terminal, west of the Strait of Hormuz, after ⁠they were halted for nearly four months. Loadings continued even after a helicopter belonging to the company crashed on Sunday at Ras Tanura, killing 14 nationals. The cause of the crash was unknown.

Economy

Customs Steps up Push on Green Tax Awareness Ahead of July 1 Launch

Published

14 hours ago

29/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The Nigeria Customs Service (NCS) has intensified its nationwide sensitisation campaign on the implementation of the Green Tax Surcharge and related fiscal adjustments ahead of the policy’s commencement on July 1, 2026.

The service disclosed this in a statement published on its official X handle on Monday, saying the initiative is aimed at promoting environmental sustainability, reducing carbon emissions and encouraging the importation of cleaner vehicles into the country in line with global environmental standards.

According to the statement, the latest sensitisation programme was held at the Apapa Area Command on Friday, June 26, 2026, under the theme, “Implementation of the Green Tax Surcharge and Related Fiscal Adjustments.”

The event brought together customs officers, licensed customs agents, freight forwarders, importers and other key stakeholders to familiarise them with the new policy ahead of its implementation.

Representing the Comptroller-General of Customs, Mr Adewale Adeniyi, the Zonal Coordinator for Zone A, Mr Mohammed Babadende, said the exercise was organised to ensure stakeholders fully understand the policy and its implementation framework before it takes effect.

“This sensitisation is designed to ensure that every stakeholder clearly understands the policy before implementation. Our objective is to eliminate uncertainty, promote voluntary compliance and guarantee uniform application of the Green Tax Surcharge across all commands,” Mr Adeniyi said.

He stressed that effective stakeholder engagement would help ensure a seamless rollout of the policy while improving compliance across the country’s ports and border stations.

Delivering a technical presentation, the Comptroller in charge of Tariff, System Audit and Coordination, Mr Murtala Muazu, explained that the Green Tax Surcharge differs from conventional fiscal measures and would therefore require a separate assessment process.

Mr Muazu disclosed that the agency has introduced a simplified implementation mechanism through the Harmonised System (HS) Code declaration platform to facilitate accurate assessment and ease compliance by importers and clearing agents.

He further revealed that the federal government has simultaneously reviewed existing import charges on vehicles to cushion the effect of the new environmental levy.

According to him, import levies on vehicles have been reduced from 20 per cent to 10 per cent, while duties on used vehicles have been cut from 15 per cent to five per cent.

The customs said the reductions are intended to offset the impact of the Green Tax Surcharge while supporting legitimate trade and ensuring businesses are not unduly burdened by the new policy.

Area Controllers who attended the sensitisation programme urged importers, licensed customs agents and members of the public to support the initiative, noting that the reduction in import levies would lower the cost of doing business, facilitate legitimate trade and ultimately contribute to reducing transportation costs across the country.

Stakeholders at the event welcomed the initiative but called for sustained public awareness campaigns to ensure broader understanding, minimise confusion and encourage voluntary compliance as the rollout date approaches.

The Green Tax Surcharge is scheduled to take effect on July 1, 2026, as part of the federal government’s broader efforts to promote environmentally friendly transportation and align Nigeria’s import policies with global climate and sustainability objectives.