After long absence, Tebboune signs new constitution and budget law

The budget Tebboune approved forecasts a deficit of around $20.4 billion or 14 percent of GDP.
Saturday 02/01/2021
People walk past the building of the lower parliament chamber in Algiers, Algeria. (REUTERS)
People walk past the building of the lower parliament chamber in Algiers, Algeria. (REUTERS)

ALGIERS - Algeria’s president Friday signed the country’s new constitution into law, his office said, after the document was approved in a November referendum on record low turnout as its leader received treatment abroad for Covid-19.

President Abdelmadjid Tebboune, who returned to Algeria this week after two months in Germany, had promoted the new constitution as the “cornerstone of the new Algeria”, as he sought to turn the page on the long-running Hirak mass protest movement.

But the document received the backing of less than 15 percent of the electorate, in a November vote overshadowed by the coronavirus pandemic and following Hirak calls for a boycott.

The Hirak first launched vast street demonstrations in early 2019 to oppose then-president Abdelaziz Bouteflika’s bid for a fifth term in office.

Following his resignation that April, the Hirak kept up the pressure to demand a full overhaul of the ruling system in place since the North African country’s 1962 independence from France.

The new constitution was pitched as responding to the demands of the Hirak, but keeps in place Algeria’s presidential regime and expands the powers of the army, a central pillar of the state.

 Budget woes 

On Thursday, Tebboune approved a 2021 budget which foresees a deficit of around 14 percent of GDP, the presidency said, as the oil-dependent country grapples with economic woes.

Algeria’s economy has been clobbered by tumbling crude prices, a liquidity crisis, inflation, and the coronavirus pandemic which has brought many economic sectors to a standstill.

Africa’s third biggest oil producer has also faced negative growth, with the International Monetary Fund forecasting that its economy will shrink 5.2 percent this year and that it will have one of the region’s highest budget deficits.

Oil and gas represent around 90 percent of Algeria’s total exports, and their revenues serve to subsidise fuel, water, health care, housing and basic goods.

Earlier this year Tebboune acknowledged the economy’s “vulnerability” due to its failure for decades to diversify its oil dependent economy.

The budget Tebboune approved on Thursday, after it was passed by the two chambers of parliament, forecasts a deficit of 2,700 trillion dinars (around $20.4 billion, 17.6 billion euros), or 14 percent of GDP.

Furthermore, its hard currency reserves have dropped from more than 162 billion euros in 2014 to less than 57 billion euros late last year.

Tebboune has already ruled out seeking loans from the IMF or other international financial agencies, but pledge to launch an economic recovery plan.

The president returned to Algeria on Tuesday after a two-month absence in Germany, where he received treatment for Covid-19, just in time to sign off on the 2021 budget.

Algeria has recorded just shy of 100,000 cases of the coronavirus and 2,756 deaths.