Event

On 17 April, President Abdelaziz Bouteflika was easily re-elected for a fourth term, having won more than 80% of the votes. With six opposition parties boycotting the vote, the turnout was 51.7%, sharply down from the 75% registered in the 2009 presidential elections. President Bouteflika is 77 years old and visibly in poor health after having suffered a stroke in April last year. His condition had caused speculation in the run-up to the elections that the time had come for the ruling regime to put forward a new head of state or nominate a vice president. This did not happen, indicating that the Algerian political establishment has yet to reach a consensus on a new leader.

Impact on country risk

President Bouteflika’s re-election indicates that policy continuity can be expected in the short term.Moreover, the country’s political risk classification is supported by its strong external liquidity and low indebtedness. However, as there is no clear successor, uncertainty about the upcoming post-Bouteflika era continues. The low turnout indicates increasing public frustration with the political process, which in turn raises questions about the sustainability of political stability. Uncertainty is likely to make attracting (foreign) investment more challenging, particularly in the hydrocarbon sector, on which the country remains very dependent. The sector has seen its production decline since 2010, while domestic energy consumption is growing. As a result, hydrocarbon exports are falling. This is projected to result in a current account deficit as from next year, down from a current account surplus of more than 20% of GDP in 2008.

Analyst: The Risk Management Team, r.cecchi@credendogroup.com