Algeria (DZA) Exports, Imports, and Trade Partners | The Observatory

Algeria's economy remains anchored in hydrocarbons, but the North African nation is quietly reshaping its trade relationships and export profile. Understanding Algeria's trade partners, export composition, and import dependencies is essential for investors navigating African markets and the Mediterranean region. The Observatory of Economic Complexity data reveals strategic shifts that signal long-term economic repositioning.

## What drives Algeria's trade relationships?

Algeria exported approximately **$42 billion in goods in 2023**, with crude oil and natural gas accounting for roughly 90% of export revenue. However, the country imported **$50+ billion annually**, creating a trade surplus dependent entirely on energy prices. This structural imbalance has pushed policymakers to diversify exports and reduce import dependency, particularly in agriculture and manufacturing.

The European Union remains Algeria's largest trading partner, absorbing 60% of exports (primarily Italy, Spain, and France) and supplying 40% of imports. Spain is Algeria's top EU buyer of liquefied natural gas (LNG), while French and Italian firms dominate upstream oil and gas projects. China has emerged as a secondary partner, supplying machinery, textiles, and consumer goods worth $3–4 billion annually.

## How is Algeria restructuring its export base?

Non-hydrocarbon exports remain modest but growing. Agriculture—cereals, dates, olive oil—represents the second-largest export category at 3–4% of total exports. Phosphate mining and fertilizer production add another 1–2%. Manufactured goods, including food processing and construction materials, remain underdeveloped but present opportunities for foreign investors.

The government's **2020–2024 Industrial Development Plan** explicitly targets pharmaceutical manufacturing, automotive assembly, and agro-processing. Joint ventures with Turkish, Emirati, and Chinese firms are materializing in these sectors, signaling a pivot toward value-added production. However, bureaucratic hurdles and currency controls continue to dampen foreign direct investment (FDI).

## Why import substitution matters for investors

Algeria's import bill reflects economic inefficiency. The country imports 70% of its food supply despite possessing agricultural potential, plus 80% of pharmaceutical inputs, despite government plans for local production. This creates openings for investors in:

- **Agro-processing:** wheat milling, dairy, canned goods
- **Pharmaceuticals:** API manufacturing, generic drug assembly
- **Manufacturing:** automotive components, textiles, consumer durables

Regional trade within the African Union remains negligible (<5% of total trade), partly due to infrastructure gaps and tariff barriers. The African Continental Free Trade Area (AfCFTA) may unlock trade with Nigeria, Kenya, and South Africa, but tariff harmonization remains pending.

## What geopolitical risks affect trade flows?

Currency controls and foreign exchange scarcity have constrained imports since 2019. The dinar has depreciated 40% against the dollar, making imports costlier while theoretically boosting export competitiveness—but energy price volatility remains the dominant risk. Geopolitical tensions in the Mediterranean, particularly with Morocco, occasionally disrupt shipping routes, though impact remains manageable.

Algeria's trade future hinges on three variables: (1) sustained LNG demand from Europe, (2) progress on non-hydrocarbon export industries, and (3) macroeconomic reforms that stabilize the currency and attract FDI. Investors should monitor quarterly export data and foreign exchange reserves closely.

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