Algeria Signals Shift on Foreign Funding With EBRD Membership
(Bloomberg) -- Algeria edged closer to becoming a member of the European Bank for Reconstruction and Development, signaling authorities in the OPEC nation may be easing their long-running opposition to foreign borrowing.
President Abdelmadjid Tebboune has authorized the government to make a capital subscription equivalent to 203 shares in the London-based international financial institution, according to a decree published in the official gazette. Such contributions from members form the EBRD’s core funding.
The move may suggest Algeria is “preparing to return to external financing” as its funding needs increase, according to Mahfoud Kaoubi, an economist with IFCG, an Algiers-based consultancy. Starting with EBRD membership is a “soft approach” and comes with fewer conditions than a potential re-engagement with the International Monetary Fund, he said.
The tightly controlled North African country that’s faced protests demanding sweeping political changes for the past two years is looking to diversify an economy heavily reliant on oil and gas. Foreign currency reserves have fallen to less than a fifth their level in 2013, and the local currency has been devalued, spurring price increases.
Tunisia, Morocco and Egypt are all shareholders in the EBRD, according to the development institution’s website.
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