Maritime transport in Algeria

How many stationary ships in any Algerian ports and for how many days ?

This issue of Maritime transport in Algeria does not date from today since as First Counsellor and Director-General of the Department of economic studies at the Court of Accounts, I happen to have conducted an audit on the demurrage on behalf of the Government of the day (1).

At the time when Algeria is going through certain budgetary tensions as impacted by the drop of the price of oil and in order to mobilize all the creative energies and eventually adapt to the articles of the new Constitution that clearly are in favour of entrepreneurial freedom, no more distinction between local and international private sector and State sectors, all creators of wealth, is centred about the relaxation of article 649 of the Maritime Code.

It is understood that it is not interfering with those strategic sectors (this particular segment being not strategic) it is in the details of easing the 49 / 51% rule of ownership share of the SMB’s, and ideally the removal of all constraints on investment in all sectors that it is question here.

In effect, article 649 of the Algerian maritime code stipulates that :

Ship chartering activities may be performed by any physical person of Algerian nationality and / or any legal entity registered in Algeria as having the quality ship-owner and whose main activity centre is located on the Algerian national territory.

This ambiguous article which excludes other types of investors makes it difficult for an Algerian operator to charter vessels as per these conditions of owning a vessel, leaving freedom to foreign interests who do so through brokers who by the way receive commissions ranging from 2.5% to 3.75%.   All these operations of maritime transport of bulk, general cargo and freight come at high-costs, since buying FOB is not allowed because of this article.

If there were no such article in the Maritime Code, all these commissions will obviously be deducted from the amount of the freight costs, hence contribute to price decrease and possibly may be lead to the purchase of new ships.   Faced with this situation, and especially since the Government’s call to rationalize spending and encourage exports, it is URGENT to soften this section, encourage Algerians to Charter their own ships, and create shipping companies in Algeria like Dubai and Singapore.  Algeria, because of its strategic geographic location as Europe and Africa’s door has a good potential but is subject to a controlled and non-anarchic liberalisation of this business sector.

I recall that in 2009, the then head of Government sent to the Minister of Transport, a memorandum dated December 5, 2009, reminding of the prudential directives of the then President of the Republic of 2003, and on the freezing of all related investment applications.   The holding on to this measure was also recalled by another instruction of February 10, 2013, in response to a question from the same Ministry of Transport on the validity of the statement of 2009.   This measure has been reconfirmed, by the current Prime Minister at the ICM of February 22, 2015 that was generally devoted to the review of maritime transport.

At the time where Algeria is going with respect to its budget through a rough ride and tensions arising from the drop in the price of oil, it is an opportune time to mobilize all the wealth creative energies and opt generally for the lifting of all constraints on investments in all sectors of the national activities, that would in no way mean the end of the State’s presence, which has an important mission as a strategic regulator.

Dr Abdulrrahmane Mebtoul, Professeur des Universités, Expert International,  ademmebtoul@gmail.com

(1) Professor Abderrahmane Mebtoul as First Counsellor and Director-General of the Department of Education at the Court of Accounts between 1980 and 1983 had to conduct an audit on the demurrage on behalf of the Government with operational recommendations, including the management of the ports, the function and interconnections customs/taxation/banks/ports.

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