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The road map places Algeria in Category 2, the result of two caps on the scoring rather than any shortage of buffers. Reserves of about USD 60 bn cover ten months of imports and external debt is 1% of GDP. Algeria also benefited from a 2026 gas windfall as European buyers turned to its pipeline gas. Against that, the deficit was 10.5% of GDP in 2025 and about 12% is budgeted for 2026. It is financed by central-bank advances and Treasury resources, because the state has no market access and has never sought any.
The paper describes the timeline Algeria manages as one measured in months of reserves rather than coupon dates. At an average oil price of USD 70 on the 2026 spending path, import cover halves within four years. An official rate near 133 dinars to the dollar against a parallel rate near 237 (a 77% premium) means the state sells its hydrocarbon dollars at a 44% discount. Hydrocarbons supply about 90% of exports, and subsidies above USD 5 bn a year support a social contract that has no tax base behind it.
The prescription is unusual: Algeria must borrow more, externally, at a price and on a traded curve, in order to stop financing itself by printing money. It must also tax more so that hydrocarbon rent goes to investment rather than consumption. The paper presents the 2026 windfall as the last comfortable moment to do both.
Key findings
- The deficit is to fall from about 12% to 5% of GDP by 2029, through energy-price indexation (2–3 points), a wage-bill cap (1–2 points), capital-spending rationalisation and broader revenue.
- Exchange-rate unification proceeds in steps (documented imports first, then travel allowances, then a managed float), bringing the parallel premium below 10%.
- A statutory ceiling with a sunset on central-bank advances is to bring monetary financing to zero, and hydrocarbon revenue above the reference price goes to a stabilisation fund.
- The planned USD 2.2 bn domestic sukuk is to be followed by a first sovereign rating and a maiden external issue of USD 1–2 bn, mainly for discipline and price discovery.
- Non-hydrocarbon exports are to grow from USD 5–7 bn to USD 15 bn by 2030 in fertilisers, steel, phosphates, agriculture and pharmaceuticals.
Summary of the paper; the full analysis is in the PDF.