Algeria


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Algeria produced 2 million barrels of oil per day in 2011 and is the sixth-largest natural gas exporter in the world. Hydrocarbons have long been the backbone of Algeria’s economy, accounting for 70 percent of state revenues, 25 percent of gross domestic product and 97 percent of total exports in 2011.


Algeria’s Performance on the Resource Governance Index

Algeria received a “failing” score of 38, ranking 45th out of 58 countries. Very low scores on Safeguards and Quality Controls, and Enabling Environment—and a “weak” score on Reporting Practices, led to this outcome.

Rank
(out of 58)
Score
(out of 100)
45 Composite Score 38
37 Institutional & Legal Setting 57
Freedom of information law 0
Comprehensive sector legislation 100
EITI participation 0
Independent licensing process 83
Environmental and social impact assessments required 100
Clarity in revenue collection 50
Comprehensive public sector balance 33
SOC financial reports required 100
Fund rules defined in law 0
Subnational transfer rules defined in law 100
38 Reporting Practices 41
Licensing process 67
Contracts 0
Environmental and social impact assessments 33
Exploration data 50
Production volumes 67
Production value 67
Primary sources of revenue 0
Secondary sources of revenue 0
Subsidies 0
Operating company names 100
Comprehensive SOC reports 33
SOC production data 71
SOC revenue data 44
SOC quasi fiscal activities 17
SOC board of directors 100
Fund rules 0
Comprehensive fund reports 0
Subnational transfer rules 0
Comprehensive subnational transfer reports 67
Subnational reporting of transfers 100
51 Safeguards & Quality Controls 28
Checks on licensing process 11
Checks on budgetary process 67
Quality of government reports 50
Government disclosure of conflicts of interest 0
Quality of SOC reports 50
SOC reports audited 78
SOC use of international accounting standards 0
SOC disclosure of conflicts of interest 0
Quality of fund reports 0
Fund reports audited 50
Government follows fund rules 0
Checks on fund spending 0
Fund disclosure of conflicts of interest 0
Quality of subnational transfer reports 50
Government follows subnational transfer rules 67
39 Enabling Environment 26
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 39
Open Budget (IBP Index) 6
Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 22
Government effectiveness (WGI) 34
Rule of law (WGI) 27
Satisfactory Weak
Partial Failing
To explore all data and compare
scores, use the RGI Data Tool.

Institutional & Legal Setting Rank: 37th/58, Score: 57/100 learn more

Algeria received a “partial” score of 57, its strongest performance on any component.

Substantial resource revenues bypass the national treasury and are not reported to the legislature. The Ministry of Energy and Mines (MEM) grants licenses following direct negotiations, not competitive processes. Environmental impact assessments are required and information on the extractive sector legal framework is available online, but Algeria has no freedom of information law nor does it participate in the Extractive Industries Transparency Initiative.

Reporting Practices Rank: 38th/58, Score: 41/100 learn more

Algeria’s “weak” score of 41 stems from minimal disclosures about licensing, contracts, environmental assessments and resource revenues.

The Finance Ministry publishes limited information on oil prices and value of resource exports. The MEM published data from 2005 on hydrocarbon reserves, production volumes, exports, companies operating in the country and production data by company/block. It does not publish any information on disaggregated revenue streams.

Safeguards & Quality Controls Rank: 51st/58, Score: 28/100 learn more

Algeria’s “failing” performance is a result of the high levels of sway enjoyed by Sonatrach, its state-owned company, over the award of licenses and the absence of a process for appealing licensing decisions. A national audit agency reviews oil revenues and reports to the legislature; however, these reports are available only upon request. MEM reports are internally audited only. Government officials with oversight roles are not required to disclose their financial interests in extractive activities.

Enabling Environment Rank: 39th/58, Score: 26/100 learn more

Algeria releases negligible information about the national budget process and faces challenges with the quality of the rule of law. Levels of democratic accountability are particularly low.


State-Owned Companies Rank: 22nd/45, Score: 49/100 learn more

Sonatrach is owned by the government and holds a majority share in ventures with all other energy companies. Its transparency and governance systems leave room for improvement. Its annual reports are available but feature gaps, such as weak reporting on quasi-fiscal activities. Sonatrach’s audited financial statements do not use international accounting standards and are available only on request.

Natural Resource Funds Rank: 20th/23, Score: 6/100 learn more

Established in 2000 and administered by the finance ministry and the central bank, the Revenue Regulation Fund performs poorly on the RGI. Detailed reports on the fund’s assets, investments and transactions are not published; procedures for making withdrawals are unclear; and spending decisions are not rule-based.

Subnational Transfers Rank: 14th/30, Score: 64/100 learn more

The central government transfers resource revenue to local authorities, but only after merging them with other revenues in a Common Fund for Local Authorities. Information on distributions from the common fund is published in local government budgets, available by request from local governments or the Interior Ministry. However, the rules that determine the allocations are not available.

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