SME development policy and programmes in Algeria

SMEs in Algeria represent a large part of the economic fabric (i.e. 99% of around 1.200.000 companies in 2019).  97% of SME are micro-enterprises as they employ less than 10 employees. The Ministry of Industry and Mines oversees SME development, while a Ministry of Micro-enterprises, Start-ups and the Knowledge Economy has been created end of 2019. The main constraints of the SME sector include difficult and costly access to finance, complex access to land, high taxation, bureaucracy and restrictive customs regulations, unfair competition of the informal sector, scarcity of skilled labor. An orientation law (n °17-02) on SME development has been promulgated in January 2017 to address these challenges. This law defines SMEs and foresees supporting measures such as the establishment of an Agency for the implementation of the national SME strategy, local SME support centers and business incubators. Financial aids are settled for SME development and sustainability, quality, innovation, skills development of SME managers, via the national SME Upgrading Funds (n° 302-124). In addition, a credit guarantee fund was established to guarantee SME credits and promote start-up innovative projects. Several international donors (e.g., EU, AFD, GIZ, WB) intervene in Algeria to consolidate national initiatives accompanying the SME sector.

SMEs supporting measures to cope with COVID-19 pandemic consequences

In response to the COVID-19 pandemic, a national monitoring committee was set up in March 2020. To support the economy and SMEs, the Bank of Algeria lowered the reserve requirement rate from 10% to 8 % and its main policy rate (at 3.25%). SME income tax and payments have been delayed with the option of deferred payments. To facilitate the importation of food products and medical devices linked to the treatment of the COVID-19 virus, an accelerated customs clearance procedure has been put in place. Faced with the decline in oil revenues, the authorities plan to reduce consumption, public investment and imports and are preparing a supplementary finance law aimed at mitigating the economic impact of the crisis. READ MORE

SBA coordinator and MED MSME working group

The Small Business Act national coordinator – SBAC in Algeria is Mr. Abdallah Telailia (Ministry of Industry and Mines). Under his supervision MED MSMEs working groups composed of institutional and private sector representatives are been established to facilitate in the Programme implementation, mainly in the areas of access to finance and SME internationalization.

The Working Groups (WG)

In order to ensure that the regional level activities integrate the national priorities on the two specific topics and translate into impact at the country level, the Programme implementation will rely on the establishment - under the coordination of the SBA Coordinators - of at least two working groups in each of the partner countries, one for MSME Access to Finance and one for MSME Internationalisation.

These working groups are formed of relevant policy makers, regulatory bodies, public agencies, representatives of the private sector and – when possible – representatives of the national legislative body; the EU Delegation representatives and relevant development partners will be invited to participate to the working sessions. The working groups will not exceed 15 members of which at least one third will be women.

The working groups are responsible for:

Providing a consultative input on the technical deliverables.

Assisting in the production of the national roadmaps for implementing the tools developed at regional level.

Facilitating the collection of relevant programme information at national level.

Facilitating the mobilization of stakeholders, programmes, resources and instruments that can gear up the implementation of the road maps at country level.