MONTHLY FLASH MAI 2020
Last update : 23 Juin 2021 10:57
- Complementary finance law 2020
The complementary finance law (CFL) 2020 was submitted for debate on the 31st of this month to the NPA. The deputies noted the inconsistency of the Minister of Energy statements, who declared on March 18 that the CFL did not foresee any increase in the prices of fuel and electricity. The deputies criticized the fiscal approach adopted to deal with real problems in the macroeconomics. The finance minister argued that the goal was to deal with the effects of the current health crisis while supporting the purchasing power of citizens by maintaining social transfers, increasing the GNMW and cancelling the Global income tax on salaries below 30,000 dinars. On 56 changes proposed by the deputies, the Bureau of the Assembly transmitted 30 to the finance and budget committee, while 23 were rejected on the ground of refusal Article 139 of the Constitution and three others for technicality.
- OPEC production and oil price: largest drop for the last 20 years.
The production of OPEC for this month recorded its lowest level since 2002. The production level was close to 25 million barrels / day; down nearly 6 million barrels / day from April. This drop in supply allowed oil prices to pick up and end the month above $ 35 a barrel. This is the highest level since last March. The drop in the number of oil wells in the United States for the 11th week in a row also played a role in this price recovery. It should be recalled that the OPEC + countries decided to reduce by 10 million barrels / day on April 12. Also and deliberately, several countries covered by this contract announced, during this month of May, to further reduce their production.
- Targeting of subsidies
The Minister of finance declared on the 30th of this month that a study is being conducted with the staff of the World Bank to target subsidies. The current subsidies which are generalized to the whole population are discriminatory. He also said that the social transfers for this year are in the order of 1,768 billion dinars; or about more than 10% of the GDP. It should be noted that a meeting was held on the 12th of the month at the headquarters of the Ministry of Agriculture to ensure the traceability of the subsidy of the semolina. Better traceability would make it possible to better target beneficiaries on this product.
- Industrial policy - Investment
The Minister of Industry said on the 28th of the month that a reflexion is ongoing to review the industrial strategy and the investment framework. Part of these provisions are part of the complementary finance law for 2020. The specifications relating to the activities of the automotive industry, electronics, household appliances and subcontracting will be finalized in the course of this summer. In terms of foreign investment, the strategic and non-strategic sectors will be identified by the Government after agreement of the NPA. Regarding the assembly of cars, electronic devices and household appliances, the Minister of Industry indicated that "The new specifications will allow foreign operators to enter into partnerships with national operators or to carry out investments with their own funds, with the condition of achieving a national integration rate from the launch of the project of 30%".
- Automotive sector
The Government has decided to resort to importing used vehicles. This will help meet local demand pending a review of the automotive assembly sector. To that end, the Minister of Industry declared, on the 28th of this month, that the Government has opted for the preferential system by exempting only basic products made locally from customs duties and not all parts of appliances or auto assembly to promote national integration. Currently, this activity employs around 4,000 people, of whom nearly 1,000 are on fixed-term contracts.
- Solar energy
A project for the construction of photovoltaic solar power plants, called "Tafaouk 1" was presented on the 20th of the month by the Minister of Energy. It has a capacity of 4000 MW of electricity and its construction cost is estimated at between 3.2 and 3.6 billion dollars. This project will be carried out over the period 2020-2024 and will affect several wilayas over an area of 6,400 ha. It is expected to generate more than 56,000 jobs. This project falls within the scope of the national strategy for an energy transition. The goal is to save nearly 240 billion m3 of natural gas. This is to deal with an increase in local demand estimated at 14% for electricity and 7% for gas in 2019. It is hoped that this project will improve Algeria's future ranking in the World Economic Forum's survey on the energy transition. For this year, Algeria ranks 83rd out of 115 countries. It is preceded by Morocco (51st), Qatar (54th), the United Emirates (63rd) and Oman (73rd). Tunisia is at the 89th place.
- Reduction of the operating budget
For the purpose of reducing the budget deficit, the government decided at the beginning of this month to increase the level of reduction of the operating budget to 50%. This threshold was 30% on March 22. It is expected, with this reduction, a saving of 141 billion dinars; i.e. less than 3% of the total operating budget voted under the 2020 finance law.
- COVID19 : Workers compensation
The amount set aside to compensate workers who lost their jobs due to Covid19 is estimated at 20 billion dinars. This amount was advanced by the Minister of Finance on the 19th of the month, during his hearing before the members of the finance committee to discuss the complementary finance law for the year 2020. This assistance will benefit in the first instance the craftsmen and taxi drivers and will be extended to other professions. This aid is in addition to that which concerned 2.2 million needy people who received an amount of 10,000 dinars.
- TOTAL : Oil assets in Algeria
Total forwent the 18th of the month to acquire the assets of the American group Occidental Petroleum Corporation (Anadarko) in Ghana. This decision was due to the one concluded between the company Occidental Petroleum Corporation (OXY) and the Algerian authorities for the transfer of Anadarko's interests to Occidental, instead of the transaction initially planned in favour of the French group. As a result of this agreement, preventing it from acquiring new assets in Algeria, Total has also decided to give up buying assets in Ghana. In a communiqué published on its website, the French energy group stressed that the agreement concluded in August 2019 provided that "Ghana's assets disposal is conditional upon the completion of the of Algerian assets disposal".
- GNMW increase and GIT revision
The Council of Ministers, held on the 10th of this month, decided to increase the GNMW by 2,000 dinars and abolish the GIT for incomes below 30,000 dinars. These measures were prescribed to support low wages. These measures will be effective from June 1st. Intuitively, these measures could relieve some stock markets. But it is believed that certain provisions made in CFL 2020 will cancel out the intended effect of these measures.
By virtue of a decree published in the Official journal on the 6th of the month , employees are now allowed to continue their activity beyond the legal retirement age (60 years) within a limit of five years. For current pensioners, their pensions will be revalued between 2 and 7% from the 1st of this month. The gross-up rate is set at 7% for pensions less than or equal to 20,000 DA, 4% for pensions ranging from 20,000 to 50,000 DA, 3% for pensions over 50,000 DA and equal to 80,000 and at 2% for pensions and allowances exceeding 80,000 DA. These increases will take effect from June with retroactive effect.
- Ansej placed under the tutelage of the Ministry of Micro company
The Agence Nationale de Soutien à l'Emploi des Jeunes (ANSEJ) shifted under the tutelage of the Ministry of micro company, Start-ups and the Knowledge driven economy from the 6th of this month. This decision is effective following its publication in the Official journal by virtue of an executive decree published in the last Official journal . Dated May 5, 2020, the decree "grants authority on the Minister of Micro company, Startups and the Knowledge driven economy the over the Agence Nationale de Soutien à l'Emploi des Jeunes".
- Transparent budgetary
In its report for the year 2019, the Open Budget Survey (OBS) of the International Budget Partnership (IBP) yesterday gave Algeria a score of 2/100. This places Algeria at 112 out of 117 countries. This ranking takes into account the issue of the on line publication of the Executive's budget proposal, reports issued during the year, the mid-year review and the audit report on time. It is also about improving the exhaustiveness of the proven budget
by presenting expenditure information as well as estimates for the different sources of revenue. It also takes into account the readiness of parliament to involve representatives of civil society in debates on the budget proposal before its approval and to testify on the audit report. The existence or not of an independent budgetary institution (IBI) is taken into account in this classification.
- Global income tax.
- Executive Decree No. 20-107 of April 30, 2020 setting the terms and conditions for continuing to work after the legal retirement age.
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