ALGIERS, March 6 (Reuters) - Algeria’s foreign exchange reserves will come to at least $100 billion by the end of 2017 thanks to measures aimed at further reducing the country’s import bill, Prime Minister Abdelmalek Sellal said on Monday.
The fall in global oil prices has hammered the state finances in OPEC member Algeria, where oil and gas account for 94 percent of total exports and 60 percent of the state budget. Energy earnings have been halved by lower prices.
Reserves are currently “over $112 billion”, Sellal was quoted by state news agency APS as saying at an economics event.
They reached $114 billion at the end of 2016, down from $144.1 billion in December 2015 and $178 billion the previous year.
Declining energy earnings have forced the government to cut spending by 14 percent this year after a 9 percent reduction for 2016. It has also introduced tax increases and reduced its subsidies for fuel and energy costs.
The government has also started implementing import restrictions, helping cut its imports bill to $46.72 billion in 2016 from $54 billion in 2015.
“The imports volume illustrates the efficiency of this rationalisation method... We are aiming this year for an additional (imports) reduction of $5 billion,” Sellal said, speaking at a meeting between the government, businessmen and trade unions to discuss the economic situation.
Long reliant on its oil and gas earnings during price booms, Algeria has been slow to develop its non-oil economy and industries. Heavy bureaucracy and a rule requiring Algerians to hold majority shares of businesses have kept some foreign investors wary of entering the country, however.
The economy is still mostly centralised with state control over key sectors, and energy wealth has also gone to maintaining a vast welfare system including housing, cheap loans and basic staples that has helped reduce social tension in the past. (Reporting by Hamid Ould Ahmed; Editing by Patrick Markey)