While Europe is eyeing its gas and oil, social anger is at its height in Algeria. Public service unions declared a general strike on Tuesday 26 and Wednesday 27 April to demand higher wages as prices soar.
This is the whole paradox of Algeria: a country rich in hydrocarbons but weighed down economically and socially. Algeria is the leading African exporter and supplies 11% of the gas consumed in Europe. With the Russian-Ukrainian war, many eyes are on Algiers, which has just signed an agreement with Italy for the supply of 40% additional gas volumes until 2024.
An oil country, Algeria is benefiting from the rise in crude oil prices which were still over 100 dollars on Tuesday 26 April. But the Algerian government cannot take full advantage of its energy windfall. Firstly because its reserves are running out and domestic consumption is exploding, but also because the gas and oil infrastructures are aging. Worse, Algeria produces practically nothing and imports everything from abroad, especially its food. Result: inflation eats away at wages, which no longer follow, hence the general strike in the public service.
Faced with this social unrest, the Algerian government has promised wage increases by the end of the year, depending on revenues from hydrocarbon exports. It also continues to subsidize basic food products, such as bread, semolina or sugar. In 2021, the authorities spent 420 million euros in subsidies just for the oil. “People don’t just want to live on bread and milk, but they want to eat like everyone else”notes an Algerian journalist who wishes to remain anonymous.
On the table of Algerians, meat has become unaffordable, eating fish has become a luxury. People are consuming more and more lentils and chickpeas, which have become the “meat of the poor” thanks to their amino acid content. In this widespread social unrest, Algeria is the victim of a double inflation: imported inflation with the war in Ukraine and local inflation linked to internal dysfunctions.
Because fundamentally, the country is unable to diversify its economic base, which is still too dependent on hydrocarbons and parasitized by the black market. Consequence: in the process of impoverishment, the Algerian middle class is now disappearing.