ALGERIA

The People's Democratic Republic of Algeria is a unitary semi-presidential constitutional republic. The president (head of the central government) is elected by universal suffrage for a maximum of two terms of five years. The president appoints the prime minister, the majority of central government officials, military and civilian leaders, provincial governors and members of the government after consultation with the prime minister, who in turn prepares and presents a programme to the lower house of the nation’s bicameral legislature for ratification.

Since late 1980s, the country has engaged in a process of decentralisation as one if its key constitutional foundations after its independence, with the aim to improve territorial and administrative governance. This implies promoting local development initiatives that involve horizontal cooperation. Hence, the central government provides local administration with more prerogatives, as well as tools for action. In 1986, the Common Fund of Local Authorities (Fond Commun des Collectivités Locales, FCCL) was established, as a public administrative institution supervised by the Ministry of Interior and Local Authorities, and governed by the decree n 86-266 of November 4^th, 1986. It aimed to achieve financial solidarity between local authorities and was responsible for granting subsidies to local authorities. The FCCL was managed by a council headed by the prime minister, the minister of interior and subnational governments or their representatives, and headed by a director. In addition, the Executive Decree n 14-116 of March 24^th, 2014 established the Solidarity and Guarantee Fund for Local Authorities (Caisse de Solidarité et de Garantie des Collectivités Locales, CSGCL). This reform represents an overhaul of the FCCL, according to articles 211 and 212 of law n 11-10 June 22^nd, 2011 relative to municipalities (communes), as well as articles 176 to 179 of law n 12-07 of February 21^st, 2012 relative to provinces (wilayas).

Algeria adopted a new Constitution in 2020, reforming the government’s structure; the executive power remained almost as strong as instituted by the 1996 Constitution, but legislature and judiciary powers were provided with greater independence. The Constitution also advocates the revision of the municipal code. It includes in its article 16 that “The local authorities of the State shall be the Municipality and the Wilaya. The Municipality shall be the basic authority. The law may confer a special system upon some municipalities” and article 17 “The relationships between the State and the local authorities shall be based on the principles of decentralization and deconcentration”. Article 18 stipulates that “The elected Assembly shall epitomise the basis of decentralisation and the setting where citizens partake in running public affairs”. The revised municipal code includes the principle of decentralisation in the functioning of elected assemblies, as a space for citizen participation in the management of public affairs and participatory democracy at the local government level.

TERRITORIAL ORGANISATION
MUNICIPAL LEVEL	INTERMEDIATE LEVEL	REGIONAL LEVEL	TOTAL NUMBER OF SNGs (2022)
1 571 municipalities ) بلدية ( (Communes)	-	58Provinces ) ولاية ( (Wilayas)
Average municipal size: 28 400 inh.	-
1 571	-	58	1 629

OVERALL DESCRIPTION: The Algerian Constitution divides local authorities into provinces (wilayas) and municipalities (communes). Each province is named after its capital city (usually the largest city).

REGIONAL LEVEL: The Constitution defines provinces as economically and diplomatically independent territorial authorities. Algeria has 58 provinces since December 18^th, 2019. Provinces constitute the first level of subnational governments in Algeria. They have their own elected assembly (Assemblée Populaire de Wilaya, APW), which is the representative body of the province, governor (wali) and executive council. This latter represents the chief regional authority and is composed of regional directors of the state agencies which are located in provinces. It is thus responsible for both national and regional issues. Provinces have administrative control and trusteeship of their local authorities, public establishments, national societies, as well as independent enterprises. The provincial leadership is an organ of the national government. It contributes to planning and application of the national development plan, and coordinates issues related to the province.

On the other hand, the president appoints the governor for an indeterminate term, who coordinates between the national government and the province. The governor presides the implementation of the elected assembly’s (APW) decisions as the representative of the province, and is the direct representative in the province of every national ministry as a senior state functionary.

The only city which is a province itself and is divided into districts and municipalities is Algiers (the national capital). It is also the largest populated province.

MUNICIPAL LEVEL: Municipalities are defined by the legislation as the primary local community. They are financially independent and constitute the basis of decentralisation. They constitute the institutional framework for the exercise of local democracy and the implementation of local initiatives, by enabling citizens to engage in the development and management of their territories. Each commune has its own assembly (Assemblée Populaire Communale, APC), to manage local affairs, local development and improve the conditions of citizens according to articles 109, 111, 122, 123 and 124 of Law 11-10 relative to municipalities. Local assemblies are legally and financially independent (article 1). Articles 11, 12, 13 and 14 of law 11-10 relative to municipalities enable the participation of citizens in the management of the affairs of municipalities.

The communal and municipal codes allow local authorities to transfer competences, in order to intervene in different areas. Local Authorities Code of 2012 allows municipalities to delegate by contract, programme or order market the management of certain public services, including drinking water and sanitation, waste management and public transport.

Municipalities exercise their prerogatives in all the areas of competence granted to them by law and contribute, along with the central government, to territorial administration and planning, economic, social and cultural development, security, as well as the protection and improvement of the living environment of citizens. The missions and the functioning of municipalities were governed successively by the following texts: the municipal charter of 1966, the municipal code of 1967 modified and supplemented by law 81-09 of April 04^th, 1981 and the municipal code of 1990 and, finally, the municipal code of 2011.

Main responsibility sectors and sub-sectors
SECTORS AND SUB-SECTORS	Regional level	Municipal level
1. General public services
2. Public order and safety
3. Economic affairs / transports	Economic developmentAgriculture and hydraulicsEconomic infrastructure and financesTransportTourismLocal development, equipment, investment and employment	Tourism and craftsHydraulics, agriculture and fishingFinance and investments
4. Environment protection	Environmental protectionForests and fishing	Environmental protection
5. Housing and community amenities	Territorial planningHousing and urban planning	Land use and urban planning
6. Health	Health and hygiene	Health and hygiene
7. Culture & Recreation	Cultural developmentWorship, wakfs (property in mortmain), sports and youth affairs	Cultural, sports and youth affairs
8. Education	Higher education and vocational trainingPromotion of specific vocationsEducational and professional training equipment
9. Social Welfare	Social developmentSocial actionsCommunication and information technologies	Social affairs

Scope of fiscal data: -

Other

Availability of fiscal data: Low

Quality/reliability of fiscal data: Low

GENERAL INTRODUCTION: The finance law and various codes, including the direct tax code and the indirect tax code, regulate Algerian subnational government finance. During the last decade, public authorities have made considerable efforts to provide local authorities with the necessary tax revenues, in order to enable them to efficiently carry out their missions, but also to reinforce their financial autonomy. The measures include the revision of law 90-08 to the new municipal code (Code Communal) in its articles 84, and in virtue of its articles 86 to 109, which state that municipalities have the right to benefit from resources and skills’ transfers, by virtue of the law n 11-10 of June 22^nd, 2011. This revision represents a push for the Ministry of the Interior and local governments to initiate actions in order to modernise the financial management of local governments, in particular the development of a new municipal budget, according to the executive decree n 12- 315 of August 21^st, 2012, on the form and content of the municipal budget.

ⓘ No detailed data available for this country

EXPENDITURE: Municipalities’ expenditure is carefully controlled by the General Directorate of the Budget (Direction Générale du Budget, DGB). No data are available.

DIRECT INVESTMENT: The central government established the municipal development plan (Plan Communal de Développement, PCD) and the sectoral development programme (Programme de Développement Sectoriel, PSD) to support investment. Subnational govenrment investment remain low given their limited capacities, including the availability of human and financial resources.

ⓘ No detailed data available for this country

ⓘ No detailed data available for this country

OVERALL DESCRIPTION: Algerian local authorities are mainly dependent on transfers from the central government. The country has been engaged in a series of local finance and taxation reforms, including the creation on July 2007 of an inter-ministerial committee in charge of reforming local finance and taxation. It is presided by the general director of taxes and brings together representatives of the Ministry of Finance, Ministry of Interior and subnational governments.

Only the central government has the power to create and levy taxes. Municipalities are dependent on receiving shares from the nationally collected revenues through the Solidarity and Guarantee Fund for Local Authorities (CSCGL), which establishes inter-local community solidarity through the mobilisation and distribution of financial resources. The fund is managed by a steering council – chaired by the Interior Minister or a representative – headed by a general director and including a technical committee.

TAX REVENUE: Algerian municipalities receive the proceeds of the property tax, garbage removal tax, tax on posters and professional plaques, special tax on real estate permits, tourist tax, as well as rights of feasts and rejoicings. They additionally receive their shares of revenue on global tax-land revenue category (50%), additional tax on wastewater of industrial origin (50%), single flat tax (40%), tax on imported new and/or locally produced tires (40% of new tires produced locally), destocking of special and/or hazardous waste incentive tax (25%), incentive tax on care activities’ waste (25%), additional tax on atmospheric pollution of industrial origin (25%), wealth tax (20%), value added for internal affairs (10%), transportation by pipeline of hydrocarbons (1.96%), professional activity (1.3%), tax on oils, lubricants and lubricating preparations imported or manufactured on the national territory (50% of oils, lubricants and lubricating preparation manufactured locally), and slaughter tax/sanitary tax on meats (8.5 Algerian Dinar (AD) in municipalities and cases defined by article 466, 467 and 468 of the Indirect Taxes Code (Code des impôts indirects). On the other hand, provinces receive 5% of single flat tax, 0.88% of transportation by pipeline of hydrocarbons and 0.59% of tax on professional activity.

Tax revenue represents 60 to 65% of municipalities’ resources. A new reform of local taxation took into account a new distribution of global revenue tax as well as the increase in the turnover tax applicable to transport by pipeline, which will be equivalent to 1% for municipalities.

GRANTS AND SUBSIDIES: The Algerian central government provides grants and subsidies to local authorities. The govenrment notably established the CSGCL in order to promote inter-local community solidarity through financial resources’ mobilisation and distribution. In 2021, grants and subsidies from the central government represented 20 to 30% of municipalities’ revenues.

OTHER REVENUE: No data are available.

ⓘ No detailed data available for this country

FISCAL RULES: In order to reduce subnational government debt, the central government instituted in 2010 the Committed Expenditure Control (Contrôle des Dépenses Engagées). This fiscal control aims to verify the regularity of municipal budgets prior to their execution, in order to avoid non-regulatory expenditure and to not accumulate municipal debt. Today, local authorities can only commit to carrying out projects and recruiting human resources if they have the necessary financial capacities.

DEBT: At the end of the 1990s, more than 1 200 municipalities were in deficit. However, the number of municipalities with a deficit decreased from 1 138 in 2006 to 417 in 2009. This was due to the central government’s action to pay off their debts, by absorbing nearly 10.5 billion DA of debt, from a total amount of 15 billion DA, via the public treasury. In 2009, the total debt was equivalent to 3.3 billion DA. In 2022, the central government paid off a considerable share of subnational governments’ debt (approximately 30 billion DA), including the province of Algiers with 18.8 billion DA, Bouira with 2.1 MDS, Tizi Ouzou, 1.9 MDS and Sétif, 1.2 MDS, while the municipalities of Oran accumulated 19.8 million DA.

TERRITORIAL MANAGEMENT OF THE CRISIS: The Algerian central government quickly reacted to reduce the economic and humanitarian chocks of the COVID-19 crisis, by imposing strict containment measures to individuals and businesses and adopting large-scale economic, political and institutional measures targeting business households. Several programmes – such as the one related to improving municipal waste management system – initially planned for 2020, were postponed to 2021. The central government also imposed curfews in the provinces according to their situation. The implementation of these restrictive actions relied on local authorities and the involvement of local officials. Subnational governments were called upon to participate in the assessment and decision-making process with regard to confinement or temporary suspension of activities that do not respect health protocols.

EMERGENCY MEASURES TO COPE WITH THE CRISIS AT THE DIFFERENT LEVELS OF GOVERNMENT: Central government provided the subnational governments with fiscal resources, in order to guarantee the continuity of their missions and their financial independence. However, official numbers are not publicly available. In addition, the provinces benefited from the right to decide targeted partial or total confinement for one or more municipalities with contamination clusters, with the approval of the central government.

IMPACTS OF THE CRISIS ON SUBNATIONAL GOVERNMENT FINANCE: No data are available.

ECONOMIC AND SOCIAL STIMULUS PLANS: The Algerian authorities have adopted the Economic Recovery Plan 2020-2024, which suggests new sources of financing to revitalise the economy. The objective is to reduce the hydrocarbons sector’s contribution to the national economy to 20% (the sector represented 93% of the central government budget in 2019 and 59% in 2009). This recovery plan also includes the revision of the provinces and municipalities’ codes to increase their autonomy and responsibility, as well as more opportunities for citizens’ involvement in decision-making and local management. The plan includes (i) the development of a strategy for implementing the decentralisation process and ensuring its effectiveness and evaluation, (ii) the adoption of a local economic development strategy, including local economic actors’ capacity building with an implementation plan, and (iii) the strengthening of human resources, in particular by launching a large training programme to take on the new missions of local authorities.