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Algeria’s Cash Allowance for the Unemployed

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In February, Algerian President Abdelmadjid Tebboune announced a youth unemployment benefit, which means the unemployed will receive a monthly grant starting in March.

Unemployed Youth Grant

The nation is struggling with a jobless rate of almost 15%. It will offer the unemployed a monthly grant of 13,000 dinars (approximately $100). The grant is equivalent to two-thirds of the nation’s minimum wage, which is 20,000 dinars.

Unemployed people will also receive medical benefits while some taxes on consumer goods will be waived. The benefit applies to those between 19 and 40 years. The government estimates that there are currently 600,000 unemployed people out of a total population of 45 million. The benefits will be available to job seekers till they find employment.

Algeria’s Social Programs Need Reform

Algeria is Africa’s largest gas exporter. The government gets 95% of foreign revenues and 60% of its budget from hydrocarbon revenues. The fall in oil prices during the COVID-19 pandemic had a negative impact on government coffers. In 2021, the economy shrank by 4.9%.

In 2021, Prime Minister and Minister of Finance Ayman Ben Abdul Rahman submitted a budget that included taxes on several economic activities and imports of consumer goods that the government has historically subsidized, like sugar and oil. The subsidies ensured social peace, but they had become a strain on the state’s finances. Subsidizing goods like bread, milk, fuel, and electricity cost the government billions each year. Subsidies have also been criticized for causing market distortions and being inefficient, since they tend to benefit wealthy households more than poor ones.

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Algeria’s 2022 budget sets aside $17 billion for social transfers, including compensation measures, assistance for education, health, and housing, and support for large families. That is far below the 2012-2017 range of $30-40 billion.

Life is already tough for Algerians, and it is only getting tougher. The country is continuously experiencing food scarcity and queues. Algeria imports a lot of its food, so all the money it earns leaves the country. Although oil prices are increasing due to geopolitical factors, it may not be enough. According to the IMF, Algeria needs an oil price of $141 to balance its budget.

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