EconSource: Algeria’s Foreign Reserves Fall by $19 Billion

Algeria’s foreign exchange reserves dropped by $19.02 billion to $159.9 billion in the first quarter of 2015 due to the collapse in global crude oil prices, the country’s central bank said. The sharp drop in reserves underscores the challenge that low oil prices pose to Algeria, which relies on energy revenues for 60 percent of its state budget and oil and gas exports for 95 percent of sales abroad. President Abdelaziz Bouteflika last week urged his government to rationalize spending, but the central bank said the level of reserves remained adequate for Algeria to manage external shocks. Algeria also recorded a trade deficit of $6.3 billion in the first five months of 2015, compared to a $3.44 billion surplus a year earlier, according to recent figures. [Reuters, 7/14/2015]

Houthi attack sets refinery ablaze in Yemeni city Aden
Houthi forces fired mortar rounds at an oil refinery in the southern Yemeni city of Aden on Monday, witnesses and local officials said. The mortar barrage hit three full storage tanks and started a huge fire. After months of conflict, most of Yemen’s oil and gas industry has ground to a halt. “We are trying to put out the fire. The shelling targeted the tanks where we were storing diesel and fuel for local consumption in Aden. The damage is going to be very big,” one official at the facility said. Industry sources said in April the 150,000 barrels-per-day Aden refinery had shut its operations and declared force majeure on its imports and exports. Meanwhile, Oxfam said on Tuesday that fuel shortages in Yemen could cause more deaths than the continuing conflict. The lack of fuel, caused by fighting and restrictions on imports, has affected food deliveries, water supplies, and health services for most of Yemen’s population. [Reuters, New York Times, 7/13/2015]

Egypt allocates EGP 5 billion for new administrative capital
The Egyptian government has allocated EGP 5 billion EGP ($638.8 million) for the Administrative Capital project in its new budget, Minister of Housing Mostafa Madbouly said on Monday. Madbouly added that a “new step” in the project will be announced soon. He also said that more than five Arab and Egyptian companies have submitted requests to contribute to the project and that negotiations are ongoing with an Emirati company regarding the first stage of the project. On June 9, Madbouly acknowledged “complications” in contract negotiations with the investment fund that is expected to lead development of the new capital. [Cairo Post, 7/14/2015]

Egypt issues new law liberalizing electricity market
New legislation liberalizing Egypt’s electricity market and encouraging private sector investment in the market was published in the official gazette on Monday. The electricity law, issued by President Abdel Fattah al-Sisi on Sunday, allows the state to give up management of the electricity sector’s public utilities. The state would only be responsible for organizing and observing the electricity sector. The bylaws of the new legislation will be issued within six months, the Electricity Ministry said in a statement on Monday. Electricity utilities would then be given six months to legalize their status as per the new legislation. The new law resolves the issue of subsidizing electricity and provides a new mechanism that allows private investors to profit even when abiding by subsidized prices. The law also separates the Egyptian Electric Utility and Consumer Protection Regulatory Agency from the Electricity Ministry, making it an independent body tasked with regulating the market. [Aswat Masriya, 7/13/2015]

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