Morocco becomes the leading car exporter, and Algeria an informal fuel supplier.
17 February 2014
Read by 2080 persons
-Good economic news last week: A private Algerian company signed a major investment agreement with a foreign partner. The event went somewhat unnoticed due to the rising political crisis caused by the madness of the fourth term. Karim Bencharif, CEO of Sasace (producer of packaging for construction materials), partnered with South African PPC in Hodna Cement (HCC) to build a 2.5 million-ton-per-year cement plant in Magra, at the site of the deposit. This will create 400 direct jobs and 3000 to 3500 indirect jobs, increasing domestic cement supply by 10%. Algeria imports 3.5 to 4.5 million tons per year. So, this is truly good news. Especially since it features two new players in the sector dominated by the Gica-Lafarge duo: Karim Bencharif and the South African investor, the largest cement producer in southern Africa. But, because there is always a but in this chronicle, Algerian transaction delays are once again highlighted. Delays that result in new costs.
The Algerian-South African partnership to build this cement plant should have materialized in 2012. Negotiations stalled due to the politico-bureaucratic machinery of the CNI. The National Investment Council, chaired by the Prime Minister, de facto decides in Algeria who associates with whom and who is entitled to what, as soon as foreign investment is involved. And where the amount exceeds 50 million euros. With HCC, the total investment amount is greater than 200 million euros. This file floated between the Ouyahia government and the Sellal government. To finally obtain, after an eternity of waiting, only a "partial" application of the legal provisions planned for this type of investment in the Hauts-Plateaux. An obscure haggling while the national cement deficit swells. All financiers say so. The implementation of a project is a key element of its profitability, and therefore its success. The more than two million tons of cement from Magra should have arrived on the Algerian market at best in June 2014, at worst in June 2015, but not in the summer of 2016 because of the political management of foreign investment in Algeria, which always extends the completion deadlines by several years.
-In 2013, Morocco became the leading car exporter in the Mena region (Middle East - North Africa): This is the counter-example of controlled foreign investment. One where transaction times are not prohibitive. If Renault's investment in Mekioussa, near Tangier, faltered somewhat before its launch, it was only for purely market opportunity reasons. Nissan, the other manufacturer of the Alliance, decided to give up in February 2009, at the height of the financial crisis, before finally returning. Not due to an administrative blockage. The first production line of the factory was thus able to start in February 2012, at the right time for the rebound of the European supply strangled by the continental halt in consumption.
The rest is a foreseen sequence. With the logistics of the efficient Tangier Med terminal, less than 50 km from Mekioussa, the cost of exporting vehicles made in Morocco has been added as a competitive advantage to all the other advantages granted at the beginning of the investment by the strategic state. The 100,000th exported vehicle on September 5, 2013, and a balance of 2.2 billion euros in exports for the automotive industry in 2013. Morocco thus becomes the leading car exporter on the southern Mediterranean coast, ahead of Tunisia, Egypt, but also Iran, a country in the Mena region. The second line of the Tangier factory went into production in October 2013. There should be no falling backward in Algiers when the Moroccan car export figures are published at the end of 2014. Just take stock of missed or delayed opportunities due to the CNI slowdown in recent years.
-"25% of fuels consumed in Tunisia" are informal imports from Algeria: This figure may seem exaggerated. However, it comes from a World Bank study entitled "Estimation of informal trade across Tunisia's land borders." It was revealed in Tunis, the capital of the country which objectively benefits from these transfers. Because, adds the study, "the main reasons behind this large-scale informal trade are the differences in subsidy levels on each side of the border." The World Bank confirms what Maghrebis intuitively know.
Goods circulate in the opposite direction of the highest public subsidy. There are two main options left for Algeria, which is the main provider of products subsidized by the public treasury. Closing the last border with a neighboring country - all the others are already more or less formally closed - but Ahmed Ouyahia is no longer there for this option, or else reviewing its internal pricing system, particularly for subsidized products. And this is totally impossible because of the access of delusional clientelism in 2014. Tunisia will live even more on informal Algerian aid in 2014. After all, it deserves it...
El Kadi Ihsane.
Elwatan.com
Published on February 17, 2014.
Posted online on February 17, 2014.
The Algerian-South African partnership to build this cement plant should have materialized in 2012. Negotiations stalled due to the politico-bureaucratic machinery of the CNI. The National Investment Council, chaired by the Prime Minister, de facto decides in Algeria who associates with whom and who is entitled to what, as soon as foreign investment is involved. And where the amount exceeds 50 million euros. With HCC, the total investment amount is greater than 200 million euros. This file floated between the Ouyahia government and the Sellal government. To finally obtain, after an eternity of waiting, only a "partial" application of the legal provisions planned for this type of investment in the Hauts-Plateaux. An obscure haggling while the national cement deficit swells. All financiers say so. The implementation of a project is a key element of its profitability, and therefore its success. The more than two million tons of cement from Magra should have arrived on the Algerian market at best in June 2014, at worst in June 2015, but not in the summer of 2016 because of the political management of foreign investment in Algeria, which always extends the completion deadlines by several years.
-In 2013, Morocco became the leading car exporter in the Mena region (Middle East - North Africa): This is the counter-example of controlled foreign investment. One where transaction times are not prohibitive. If Renault's investment in Mekioussa, near Tangier, faltered somewhat before its launch, it was only for purely market opportunity reasons. Nissan, the other manufacturer of the Alliance, decided to give up in February 2009, at the height of the financial crisis, before finally returning. Not due to an administrative blockage. The first production line of the factory was thus able to start in February 2012, at the right time for the rebound of the European supply strangled by the continental halt in consumption.
The rest is a foreseen sequence. With the logistics of the efficient Tangier Med terminal, less than 50 km from Mekioussa, the cost of exporting vehicles made in Morocco has been added as a competitive advantage to all the other advantages granted at the beginning of the investment by the strategic state. The 100,000th exported vehicle on September 5, 2013, and a balance of 2.2 billion euros in exports for the automotive industry in 2013. Morocco thus becomes the leading car exporter on the southern Mediterranean coast, ahead of Tunisia, Egypt, but also Iran, a country in the Mena region. The second line of the Tangier factory went into production in October 2013. There should be no falling backward in Algiers when the Moroccan car export figures are published at the end of 2014. Just take stock of missed or delayed opportunities due to the CNI slowdown in recent years.
-"25% of fuels consumed in Tunisia" are informal imports from Algeria: This figure may seem exaggerated. However, it comes from a World Bank study entitled "Estimation of informal trade across Tunisia's land borders." It was revealed in Tunis, the capital of the country which objectively benefits from these transfers. Because, adds the study, "the main reasons behind this large-scale informal trade are the differences in subsidy levels on each side of the border." The World Bank confirms what Maghrebis intuitively know.
Goods circulate in the opposite direction of the highest public subsidy. There are two main options left for Algeria, which is the main provider of products subsidized by the public treasury. Closing the last border with a neighboring country - all the others are already more or less formally closed - but Ahmed Ouyahia is no longer there for this option, or else reviewing its internal pricing system, particularly for subsidized products. And this is totally impossible because of the access of delusional clientelism in 2014. Tunisia will live even more on informal Algerian aid in 2014. After all, it deserves it...
El Kadi Ihsane.
Elwatan.com
Published on February 17, 2014.
Posted online on February 17, 2014.
