The National Chamber of Accountants has proposed a national strategy for industrial clusters for the period 2027-2035, aiming to significantly diversify Algeria's economy. The full 159-page study, titled "National Strategy for Industrial Clusters 2027-2035," seeks to transform major industrial projects into attraction centers for thousands of small and medium-sized enterprises (SMEs). This initiative is designed to raise the industry's share in the Gross Domestic Product (GDP) from its current 6-8% to a target of 12-15%. The proposed strategy, presented in this reference study by the National Chamber of Accountants, outlines a detailed roadmap for achieving these ambitious economic objectives.
The proposed strategy also includes an accelerated procedure for studying structural projects. This measure is intended to facilitate the lifting of freezes on qualifying projects, thereby enabling their progression and contribution to the overall industrial development outlined in the plan. This streamlined process is critical for ensuring that promising projects can move from conception to implementation without undue delays, a key factor in accelerating industrial growth.
Flagship Projects and Economic Targets
The proposed strategy identifies four initial flagship projects to anchor the industrial clusters: a propylene to polypropylene conversion complex, an integrated iron and steel complex, an oilseed crushing project, and a seed platform for potatoes and vegetables. The National Chamber of Accountants' study projects the creation of between 1.2 and 1.5 million direct and indirect jobs by 2035 through this strategy. It also aims to mobilize approximately 20,000 new or active small and medium-sized enterprises (SMEs) around these flagship projects and industrial clusters. This mobilization of SMEs is central to the cluster concept, fostering a dynamic ecosystem of interconnected businesses.
The economic potential of these projects is noted by the value difference in raw materials versus converted products. For instance, the value of raw polypropylene, typically priced between $350 and $450 per ton, can increase by 10 to 20 times when converted into finished products, which range from $1,500 to $6,000 per ton. This substantial increase in value shows the economic benefits of local processing and transformation. The proposed polypropylene complex, planned for Arzew in Oran, is estimated to require an investment of $1 billion to $2 billion. This significant investment is expected to yield substantial returns by capitalizing on the value-added potential of polypropylene production.
Another significant initiative is the integrated iron and steel complex, designed with an annual capacity of 5 million tons, requiring an estimated investment of $3 billion to $5 billion. This complex is poised to strengthen Algeria's heavy industry capabilities and reduce reliance on imported steel products. The oilseed crushing project carries an estimated cost between $300 million and $350 million. This project aims to enhance food security and develop the agricultural processing sector. Additionally, a seed platform for potatoes and vegetables, to be established in the Sahara region, is projected to cost between $20 million and $30 million. This platform is key for developing agricultural self-sufficiency and improving crop yields.
The strategy anticipates an additional transformation added value of between $18 billion and $30 billion annually. It forecasts annual revenues from transformed products to range between $8 billion and $12 billion. The plan projects an additional annual export flow outside of hydrocarbons of $6 billion to $10 billion. During the initial phase, extending to 2031, the strategy targets the creation of more than 250,000 direct jobs. This phased approach allows for measurable progress and adjustment as the strategy unfolds.
Algeria's Industrial Potential and Challenges
Algeria holds significant natural resources, competitive energy costs, and a domestic market comprising nearly 46 million consumers. The country's strategic geographic location also contributes to its industrial potential, offering advantageous access to regional and international markets. These inherent strengths provide a strong foundation for industrial development and economic diversification.
Despite these advantages, the manufacturing industry currently contributes between 5% and 6% to the nation's Gross Domestic Product (GDP). This figure notes the existing gap between Algeria's inherent capabilities and its current industrial output, showing the need for strategic interventions to enhance economic diversification and industrial development. The strategy aims to bridge this gap by fostering industrial clusters that maximize local resources and capabilities.
Strategy Implementation and Support Mechanisms
The industrial cluster concept, as outlined by The National Chamber of Accountants' study, is structured around four interconnected elements: a flagship project, a network of linked small and medium-sized enterprises (SMEs), priority sectors equipped with shared infrastructure, and a strong governance system. This full framework is designed to ensure coordinated development and efficient operation of the clusters. To streamline project development, the study proposes that project qualification should be completed within a maximum of 30 days, followed by a detailed in-depth study within 90 days. This accelerated timeline is key for maintaining momentum and attracting investment.
The study further suggests establishing a national joint investment fund specifically for clusters, with a particular focus on SMEs integrated with flagship projects. This fund would provide essential financial backing to ensure the growth and stability of businesses within the clusters. A key recommendation involves adopting the concept of 'local content' in all public projects, which includes measuring the rate of local integration achieved. This emphasis on local content is intended to maximize domestic economic benefits and build national industrial capacity. Qualifying projects would also benefit from a 'basket of incentives' proposed by the study, directly linked to investment levels, job creation, local integration efforts, export performance, and the generation of added value. These incentives are designed to attract and retain high-impact investments.
For industrial real estate within these clusters, the study advocates for a new vision that prioritizes allocation based on strategic importance and includes monitoring investor commitments. This approach aims to ensure that land and facilities are utilized effectively for national industrial goals. The accounting profession is noted as playing a significant role in the strategy's overall success, extending beyond traditional auditing functions. According to the study, accountants can contribute to building trust and providing essential support to companies within the clusters. This expanded role recognizes the critical need for financial expertise and oversight in complex industrial ecosystems. Five standard contractual roles for accountants serving these clusters have been identified: legal audit, management of shares and special benefits, warning procedures, certificates and special investigations, and support in formalizing companies. These specific roles show the multifaceted contributions expected from the accounting profession in driving the success of Algeria's industrial cluster strategy.