Algeria: The Moroccan port headache

On 10 January, the Professional Association of Banks and Financial Establishments (ABEF) invited Algerian banks to refuse any direct debit operation for transport contracts involving transhipment/transit via Moroccan ports. Less than a month later, the same association issued another instruction to accept "direct debit operations for imports of products, especially perishable goods and in particular meat, whose date of embarkation on board vessels is prior to 10 January 2024". This note, issued in haste for whatever reason, did not take into account transactions prior to the date of issue, nor the nature of the products requested.  

Algeria is a major importer of almost all large-scale consumer products, especially meat, wheat, pulses, etc., and has always experienced strong pressure on many products. Recurrent shortages have made this vast country the laughing stock of the world, with queues forming outside food shops year after year. The ABEF instruction on 10 January came close to setting fire to a country badly affected by the high cost of living and basic consumer goods such as semolina, oils, rice, lentils, beans and milk. 

It was the Ministry of Transport that brought the seriousness of the situation to the attention of ABEF to introduce a corrective measure that, however, would not solve everything. The day the boycott of the Moroccan ports really takes effect on the Algerian side, we should expect a rise in prices on the Algerian markets. The main repercussions of this boycott will be an increase in costs and delivery times. These costs will have an impact on the selling price to the consumer. This will not help in a presidential election year.   

A deadline that scares decision-makers behind the scenes, who are doing their utmost to avoid social crises.  

But it is not only everyday consumer goods that will be affected by this decision, which is iniquitous to say the least, but also other sectors, in particular investments by foreign companies. The latter will be forced to take other routes to import the materials and equipment they need. More expensive routes, and here too there will inevitably be repercussions on contracts initially signed at lower prices. These contracts will automatically be revised upwards.  

"The Algerian ban on the entry of goods in transit through Moroccan ports poses considerable economic and logistical problems," says a financial expert. "Global companies using these routes could be forced to rethink their logistics chains, resulting in additional costs and disruption". Existing trade agreements between the two countries, in particular with the European Union, could also be affected," says the economic expert in the afrik.com online newspaper. 

To what extent would Algeria have to bear the costs generated by a ban on the use of Moroccan ports, in particular Tangier Med? It is a deadweight loss of millions of dollars, which would have served to compensate for many of the shortages suffered by Algerian consumers. 

On the Moroccan side, there will certainly be a loss, even if Algerian transactions represent a tiny proportion of their port activity, but they are already thinking of strengthening trade links with other African and European countries, in order to reorient trade strategies to compensate for the losses.