Chapter 3 of the SME Law 1702 also lays the foundation for establishing a System of SME Economic Information under the responsibility of the National Agency for SME Development (ANDPME) to serve as a planning and decision-making tool. This system (in principle an SME Observatory) would consolidate information from several statistical and administrative sources, namely the National Statistics Office (ONS), the business registry, the National Social Security Institute (CNAS), the Institute for Social Security for the Self-Employed and Independent Professionals (CASNOS), the tax administration, the customs administration, the chamber of commerce and industry, and the association of banks and financial establishments. If implemented successfully, such a system would provide timely and complete information on private enterprises at a low cost and with a lower burden on firms than the enterprise or establishment censuses undertaken in most countries.
This would increase the already good availability in Algeria of SME data, which are published regularly (about twice per year) in the statistical bulletins of the Ministry of Industry and Mines2 and include total SME population, SME entries and exits, employment, and exports and imports. They also comprise information on SMEs broken down by economic activity and territorial distribution. The data is obtained from official sources such as the National Social Security Institute (CNAS) and its equivalent for self-employed and independent professionals (CASNOS).
The wider economic agenda in which SME policy is framed remains almost unchanged. The SME Policy Index 2014 noted that the overall economic policy framework was set by the Five Year Economic Plan (2010-2014), which placed private sector development as one of the country’s key priorities (together with public investment in infrastructure, housing and social services), with the aim of reducing reliance on the hydrocarbon sector and diversifying the country’s economic structure.
The 2015-2019 Economic Development Plan continues to place a high priority on economic diversification through private sector development. As part of the Plan, the Governmental Policy on the Domain of Industry and Mines mentions SME development as a priority, notably through the development of basic industries and “downstream SMEs” and import substitution.3 This, combined with the consultations carried out for the purposes of this interim assessment, point to a strong orientation of SME policy towards the development of the industrial sector. Furthermore, it is surprising that other economic policy areas under the 2015-2019 Economic Development Plan barely mention the role of SMEs in sectors such as commerce; agriculture and fisheries; energy; tourism and handcrafts.4
In terms of the institutional framework and co-ordination for SME policy, the Ministry of Industry and Mines continues to be the main institution in charge of enterprise development policy, with the ANDPME and the National Agency for Investment Development (ANDI) under its umbrella. Other pertinent authorities in this area are the National Agency for the Support of Youth Employment (ANSEJ), the Credit Guarantee Fund for SMEs (FGAR) and the “SME Facilitation Centres” and business incubators across the country.5
The SME Policy Index 2014 noted that policy co-ordination between the various institutions was a major issue due to the lack of a comprehensive medium-term SME development strategy supported by short-term action plans. In this regard, the SME Law designates the ANDPME as the leading institution in charge of the SME policy agenda for enterprise creation, growth and survival. The Law establishes local authorities as the initiators of SME support, notably in terms of accessing land and immovable property. According to the consultations for this interim assessment, in order for the ANDPME to be more agile in its policy mandate the SME agency will need to gain autonomy – becoming a “public establishment of specific character” – and will have a board of directors that includes representation from the private sector (a model that is already applied in several countries in the region, including Morocco and Jordan).
The SME Law also notes that the “Algerian SME development policy should be based on consultation and co-ordination among relevant public and private actors and on appropriate studies leading to programmes, measures and support structures.” It also foresees the creation of a public-private consultation body, the National Consultation Council for SME Development (CNC), which should be formed by organisations and professional associations representing SMEs. The CNC was officially launched in November 2017. (See Chapter 1, section 4, for more on public-private dialogue.)
Importantly, the SME Law puts into place a special fund to finance the actions and support stated in the text as well as the operations of the ANDPME: the National Fund for Upgrading SMEs, Supporting Investment and Promoting Industrial Competitiveness.6 According to the Finance Law (loi des finances) 2018 and to the consultations, the Fund is to be financed by a new tax on industrial land designed to raise of DZD 395 million (about EUR 2.8 million).
The SME Law sets the legal framework for a more complete and coherent SME policy in Algeria. Nonetheless, the implementation of a concrete SME strategy and action plans with detailed activities, responsibilities, budgets and monitoring and evaluation (M&E) mechanisms is still missing. According to the consultations conducted for this interim assessment, an SME strategy is being developed in the context of the Project for the Support of SME Development (PAD-PME) supported by the African Development Bank (AfDB).7 The project also supports the reorganisation of the ANDPME, capacity building for the Agency, and the establishment of the SME information system (the SME Observatory).
On public-private dialogue, the broad economic issues continue to be tackled by the Tripartite Council (la Tripartite) formed by the government, the General Union of Algerian Workers (UGTA) and many private sector associations. More precisely, on SME policy the most important recent development is the creation of aforementioned CNC, which represents several business organisations in various economic sectors. According to the consultations for this assessment, the CNC is working with the EU Technical Assistance and Information Exchange instrument (TAIEX) to develop an action plan between the CNC and the ANDPME. During the launch of the CNC in November 2017 the Algerian authorities revealed a road map for developing the SME Strategy. 8
For further action: Through the SME Law and the initial implementation of some of its actions, Algeria has made an important step towards the adoption of a more comprehensive and coherent SME policy. The SME Law, albeit brief, is a complete document that stipulates how the most important aspects of SME should be conducted. Its full implementation, including the execution of an SME strategy, is now essential to put words into action. Furthermore, the creation of the CNC is expected to provide a formal consultation mechanism allowing SMEs and entrepreneurs to contribute to policy making; that said, its success will be highly influenced by the degree to which the CNC is representative of the SME and entrepreneur population.
In contrast, as earlier noted in the SME Policy Index 2014, structural factors – including the difficult regulatory and business environment and the lack of economic diversification and openness – create important distortions for SME and entrepreneurship development. In addition, although SME policy is seen as an important instrument for industrial policy and economic diversification, not much is said about the role of SMEs in services and non-industrial sectors. Hence, the Algerian authorities also could extend their vision on the role of SMEs for the whole economy and consider the measures necessary to support the promotion of entrepreneurship and SMEs outside industrial activities.