Algeria: Reasons behind allocating 1 billion US dollars to finance projects in Africa?


Algeria linked its allocation of one billion US dollars to finance development projects in African countries to security and stability in the brown continent, but the dimensions of this decision go beyond this scope despite its importance, in the country’s endeavor to restore its regional and continental role, after its decline during the period of the former president’s illness and the collapse of oil prices.

On February 19, Algerian President Abdelhamid Tebboune, in a speech read on his behalf by Prime Minister Ayman Ben Abdelrahman, during the 36th Summit of Heads of State and Government of the African Union, announced an injection of one billion dollars for the benefit of the Algerian Agency for International Cooperation for Solidarity and Development, to finance development projects in African countries.

This isn’t the first time that Algeria seeks to provide financial aid to African countries, as in 2013 it forgave debts owed by African countries amounting to 902 million Euros ($1 billion).

Rather, it announced in 2018 that it had erased $3.5 billion in debt to 14 African countries over the past five years, for humanitarian reasons.

However, this humanitarian aid has always been associated with an increase in oil and gas revenues, and it usually shrinks or melts like a piece of butter under a scorching sun with the decline in fuel prices.

However, the establishment of the Algerian Agency for International Cooperation would institutionalize financial support for Africa, and instead of wiping out debts, the country would tend to finance development projects, especially those that directly benefit marginalized African societies.

The role that the Algerian Agency for International Cooperation is expected to play is very similar to what the Turkish Agency for International Coordination TIKA is currently doing, in terms of building hospitals, restoring historical mosques, financing agricultural and educational projects.

Algeria’s exit from its economic and financial crisis played the main role in allocating this important amount to support development in Africa, especially after the rise in oil revenues to more than $50 billion, and the increase in exchange reserves to about $60 billion, after its decline from $194 billion in 2014 to $42 billion in March 2021.

Algeria doesn’t want to be at the mercy of oil and gas, so it seeks to increase the volume of its non-hydrocarbon exports from less than $2 billion in 2019 to $5 billion in 2021, then $7 billion in 2022, then $10 and $15 billion in 2023 and 2024.

Algeria is betting on strengthening its trade with African countries to increase its non-hydrocarbon exports, and part of this financial funding is likely to target road networks and infrastructure linking Algeria with African countries.

It’s like a miniature Algerian Silk Road, but without plunging African countries into debt in exchange for expensive infrastructure construction. Rather, it is a revival of the initiative of former Algerian President Houari Boumediene, in 1974 for South-South cooperation.

Algeria gives priority to development projects of an integrative nature, or those that would contribute to advancing development on the continent.

In this context, Algeria is adopting several African integration projects, similar to the African Trans-Saharan Road, which connects it to Nigeria, the largest economy in the continent in terms of gross domestic product, and branches into Tunisia, Niger, Mali and Chad, and this road is accompanied by a fiber optic line.

In addition to the Nigerian gas pipeline to Algeria via Niger, which Algeria has committed to financing the Niger section.

The African integration projects supported by Algeria also include the Tindouf-Zouirat-Mauritanian road, which costs one billion US dollars, and is being implemented by 10 Algerian institutions, as the country seeks through it to reach West African markets through Mauritania.

Through these projects, it is clear that North African countries that will be a priority such as Mauritania, Tunisia and Libya, besides African west coast countries, such as Niger, Mali and Chad, and West African countries, like Nigeria and Senegal.

Algeria has also opened the way for African countries wishing to benefit from this mechanism to finance projects, which will include other friendly countries in different regions of the continent such as Sudan, Ethiopia, Kenya and Uganda in the East, Angola, Namibia and South Africa.

When the French newspaper Le Figaro asked the Algerian president about the presence of Wagner’s mercenaries in Mali, he considered that the money that Bamako pays to the Russian security company will benefit more if it is invested in development.

Algeria’s vision of combating terrorism in the Sahel region is based more on the economic side than on security, and this is what Western countries have alerted many times to when they intervene militarily in the region.

By virtue of its knowledge of the Sahel region and Africa, and the misery experienced by the peoples of sub-Saharan Africa, Algeria realizes that much of the violence, rebellions, smuggling and proliferation of armed groups is due to poverty and the lack of the basics of life in these regions, including potable water.

Therefore, the establishment of the Algerian Agency for International Cooperation for Solidarity and Development, affiliated directly to the presidency on April 20, 2020, came to achieve the goals of development and African integration, and to dry up the sources of armed groups in the brown continent, especially after the transfer of the weight of the terrorist organizations of ISIS and al Qaeda from Iraq, Syria and Afghanistan to Africa.

The diplomatic battle waged by Algeria, accompanied by South Africa and friendly countries from the continent, to prevent Israel from enjoying observer status in the African Union, and represented a warning bell against the danger of Israeli expansion in the brown continent.

During the period in which Algeria experienced a diplomatic decline after the illness of former President Abdelaziz Bouteflika (2013-2019), and then the decline in oil prices (2015-2020), Israel achieved several breakthroughs in the African continent and established diplomatic relations with several countries on the continent, the latest of which was the inauguration of the Chadian president, Mohamed Deby, his country’s embassy in Tel Aviv.

Algeria is trying to remedy the period of its decline by providing a billion dollars for development in Africa to urge the countries of the continent not to succumb to the temptations of Tel Aviv, and to prevent it from extending its influence to its neighboring countries.

Also, Algeria’s support for the Sahara region issue and Morocco’s attempt to expel the Sahara Arab Republic from the African Union is another factor that prompted Algeria to activate its financial capabilities to confirm its influence within the union’s structures, especially since it, along with South Africa, is one of the largest financiers of the African Union, and supporters of the Polisario Front, which demands the independence of the Sahara region from Morocco.

Algeria pleads for Africa to obtain two permanent seats in the UN Security Council, and hopes to win one of the two seats.

Although it is the fourth African economy, it is almost the only African country that has no external debt, and by allocating one billion dollars to finance African projects, it is thus flexing its financial muscles, at a time when most countries on the continent are facing economic crises and debts that burden them.

It’s also a message to the BRICS countries (Russia, China, India, Brazil and South Africa), that it’s a country that enjoys financial and political independence, and that it will constitute an addition to the international organization, in which it applied for membership.

The 1 billion US dollars allocated by Algeria to finance African development projects, although its main goal is to combat terrorism economically, but it would achieve other goals, intentionally or unintentionally, such as addressing the issue of irregular migration, the Israeli penetration into the continent, and the decline in the enthusiasm of Africans to support the Palestinian and Saharan causes, and the Russian-Chinese conflict with the US-French-European axis to dominate Africa and make it an arena for conflict, not to mentioned the recent Italian ambitions.

Where Algeria seeks to have its say in the African continent to which it belongs, to achieve the greatest degree of cooperation and coordination with regional countries in the continent, especially South Africa, Nigeria and Ethiopia, to face the two biggest Security challenges and development.

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