Country Competitiveness

For the purpose of this discussion I have chosen the consumer service industry of online food delivery portal services. (Example – Talabat.com in Kuwait).

Algeria :

Countries competitiveness for business operations

Algeria is one of the big players in the African continent on account of its sizeable GDP and large land area. Currently, the Trade and economic activity is prosperous but the future does not look prosperous. There are weaknesses within the Algerian institutional framework which acts as hindrance for sustained long term development. The structural problems include a low level of competitiveness and a challenging business environment.Algeria has set restrictive regulations for foreign investors – especially for businesses established after August 2009, foreign companies are required to have a local partner for 51% of their investment in Algeria.

The foreign companies are required to reinvest profits generated by tax exemptions locally. Also the governments controls price of some large consumption products.

There is also the threat of terrorism who threatens the safety and security of the business environment. Though Algeria has large labor force which is productive, there is large scale poverty and unemployment in the country.

Electricity remains a concern with frequent power interruptions negatively affecting the productivity of the nation. Algeria’s logistics infrastructure is rated badly for its quality.

The high per capita GDP and upper middle class income levels present significant growth opportunities for diversified growth in consumer goods industries. The urbanization within Algeria is almost 73% which is a good indicator for consumer goods industries.

Cultural issues: The culture in Algeria is basically Arabic and Berber.  Algerian cuisine is rich and diverse. The fast food industry is not so booming because Algeria's legal code poses particular problems for franchises because it does not allow for royalties. ^[1]
Thus on overall basis, if a Kuwaiti company like Talabat.com wants to open its branch in Algeria it will face some problems like the profits made cannot be immediately take back from Algeria in form of royalty or otherwise. Though there is high level of urbanization and growing upper middle class, this service is catch up and grow but it will also face operational problems because of frequent power cuts. Since our selected business is online internet based, the frequent power cuts will be a major hurdle.