The Algerian real estate sector is facing a further crisis with foreign companies dragging $1.2 billion in arrears and threatening to leave the country due to the lack of state resources for construction sites.
The path chosen by the Algerian government to greater diversify the economy has only pushed the country further into crisis reflected in the situation in the construction and public works sector.
According to Algerian Prime Minister Abdelmalek Sellal:
for nearly three years now, the world has faced the oil crisis in which we have chosen the difficult path, the way of labour, the production and the diversification of the economy, despite the easy solutions proposed by many experts.
Today, construction sites for all types of housing have been abandoned for months on end due to the lack of funding, according to Tout Sur l’Algerie. The stagnation is due to the financial crisis that the country is experiencing in the wake of the fall in prices of a barrel of oil. Because of the financial situation, Algerian banks are also reluctant to finance the companies behind real estate projects due to the billions of unpaid claims.
Consequently, all the works supported by the Algerian State are at a standstill. In addition to Algerian companies, several foreign operators involved in the construction of housing are burdened by unpaid debts, and the more than $1.2 billion in unpaid claims, as well as the lack of deliveries of housing units forcing the companies to threaten to leave the country. The construction industry is one of the biggest employers in the country but is likely to add to the unemployment rate which is expected to rise above 13 per cent, according to the IMF.
This situation will undoubtedly have a negative impact on the entire building sector with the housing freeze affecting cement manufacturers and other local businesses in the construction sector.
For critics, the billions of dollars spent on the purchase of armaments would at least have been better served by helping to provide Algerians with decent housing.