NARCO Analysis April 2014 Part #2

Saturday, April 19, 2014

As expected, Algeria’s presidential election was largely a non-event, but now that it’s over, the really interesting stuff happens. On the political level, President Abdelaziz Bouteflika has to appoint a prime minister and he will likely shuffle key cabinet posts. How he does so and who he picks will shed light on a persistent question: did the election finally resolve or simply prolong Algeria’s festering political feud? On the policy level, Bouteflika’s fourth and undoubtedly final term could usher in real policy changes or the paralysis that has hampered Algerian growth for the last three years could continue. We won’t know the answers to these questions for several weeks at least, but unlike the presidential election’s foregone conclusion, there is real uncertainty about what is going to happen.

That said, uncertainty does not mean unfamiliarity: we’re not likely to see many new faces emerging. For example, Bouteflika could permanently appoint Acting Prime Minister Youcef Yousfi. Were he to do so, this would require a new Minister of Energy and Mines. A new Minister of Energy and Mines would himself likely appoint his own CEO at Sonatrach, who would then make changes throughout senior Sonatrach leadership. Even if this were this to transpire, though, it is unlikely that any new appointee would be unknown or unheard of.

However, were Bouteflika to send Yousfi back to the Ministry of Energy and Mines in order to preserve some sector stability, the question of who becomes prime minister remains open. Former Prime Minister Abdelmalek Sellal quit to become Bouteflika’s campaign manager, but it appears unlikely that he would be reappointed in that role. There are also other former prime ministers like Ahmed Ouyahia and Abdelaziz Belkhadem who buried the hatchet and supported Bouteflika’s candidacy. They are unlikely to get tapped as prime minister either, but they will get rewarded and will land somewhere in the “new” administration. The question is where and to what effect.

Only once we see the new roster of cabinet ministers will we be able to start to divine where Algeria’s political feud stands. 

The feud paralyzed the commercial environment for the last several years and economic challenges are now more urgent. Will Bouteflika’s reelection allow for the introduction of policy reforms that breathe new life into the Algerian economy, particularly regarding FDI and the hydrocarbons sector? In the oil and gas sector itself, the first bid round under the amended hydrocarbons law is slated for later this year and Algeria desperately needs it to succeed, but does Bouteflika’s reelection resolve IOC concerns about the Algerian business environment, about the sector’s fiscal regime, and about upstream security? Or is it plus ça change…?

North Africa Risk Consulting is preparing a Multiclient Report that addresses these issues and as well as profiles key cabinet members and other stakeholders. Delivery is anticipated for late May 2014. Please get in touch if you or your organization are interested in discussing the report in further detail.



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