Rating agency Moody’s has warned investors that the political uncertainty in Algeria will weaken its growth outlook and exacerbate the country’s underlying economic and fiscal challenges.
Algeria’s president Abdelaziz Bouteflika has faced weeks of protest and a call for his removal from the army chief of staff, Lt Gen Ahmed Gaed Salah.
The 82 year-old Bouteflika has been president for 20 years and recently bowed to public pressure by agreeing not to stand for a fifth term.
He has also allowed for the drafting of a new constitution and the new election as part of its political transition, however the process has yet to start and the promised election has been delayed.
“The more protracted the political transition the greater risk posed to Algeria’s credit profile,” said Elisa Parisi-Capone, vice president and senior analyst at Moody’s.
The report also highlights Algeria’s exposure to swings in oil prices as well as declining production due to the postponement of investment projects – a slowdown exacerbated by the political uncertainty.
Meanwhile the continued drawdown of financial buffers is denting the sovereign’s shock-absorption capacity, stated Parisi-Capone.
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