Algeria, one of Africa’s main military powers, will allocate more than $22 billion to defense in 2023, a budget that has more than doubled compared to 2022, according to the finance bill adopted on Tuesday. 22 November by the National Assembly. Defense will thus remain the first budget item ahead of finance, endowed with more than 21 billion dollars.
Expenditure on national defense should reach some 3,186 billion dinars (more than 22 billion dollars), according to the text approved by the deputies of the National People’s Assembly (APN, lower house of Parliament). In 2022, the national defense budget was 1,300 billion dinars (more than 9 billion dollars).
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This unprecedented increase in the military budget comes in a context of strong tensions with Morocco, with which Algiers severed diplomatic relations in August 2021 due to deep disagreements over the disputed territory of Western Sahara and the security rapprochement between Rabat and Israel.
Algeria surfs on expensive oil
The financing of this budget was made possible by the rise in the price of hydrocarbons, of which Algeria is a major exporter.
“The rise in hydrocarbon prices is helping to strengthen the recovery of the Algerian economy following the shock of the pandemic. Windfall revenues from hydrocarbons have eased pressures on public and external finances”said Monday a delegation from the International Monetary Fund (IMF), which stayed from November 6 to 21 in Algeria.
The budget bill, which must then be submitted to the upper house of Parliament (Council of the Nation), provides for expenditures of more than 99 billion dollars and revenues of 56.8 billion dollars. For 2023, the government expects a growth rate of 4.1% and inflation of 5.1%.
The budget was drawn up on the basis of a reference price of a barrel of oil at 60 dollars and a market price at 70 dollars.