Special to WorldTribune.com

WASHINGTON — Algeria, the most attractive market in Africa, is
expected to increase defense spending, a report said.

An industry report asserted that Algeria would increase military and
security spending over the next five years. The report by SDI said Algiers
was expected to spend the majority of its capital expenditure on military
modernization.

“Despite its challenges, Algeria remains one of Africa’s most attractive
defense markets, with a defense spending capability that is expected to
increase in the forecast period primarily owing to increased energy exports and an arms race in the North African region,” the report, titled “Future of the Algerian Defense Industry — Market Attractiveness, Competitive Landscape and Forecasts to 2017,” said.

Released on April 9, the report said Algerian defense spending increased
by 21.4 percent and reached $10.3 billion in 2013. Through 2017, the North African state, the ninth largest weapons importer, was expected to grow at a rate of 6.2 percent as Algeria seeks Western military equipment.

“Furthermore, the opening up of Algeria’s market to suppliers other than
those in Russia is expected to make it an exciting proposition for foreign
companies looking to enter the market either through direct
government-to-government deals or by establishing joint ventures and
partnerships,” the report said. “During the forecast period, the Algerian
government is expected to spend the majority of its capital expenditure on
modernizing its Army, Navy and Air Force.”

The report identified Algeria’s requirements as counter-insurgency amid
the threat by Al Qaida Organization in the Islamic Maghreb. Algeria’s
defense industry has also been undergoing modernization while discussing
proposals with the Gulf Cooperation Council.

Algeria, however, has been hampered by what the report termed a high
level of corruption. SDI said the Algerian defense industry has been marred
by a lack of transparency in awarding defense contracts, and that Algiers
failed to define a formal offset policy.

“While procurement is supposedly conducted as open competition, in
reality personal relations and the country from which the supplier is from
are considered to be influential in decision making,” the report said. “The
Algerian government does not publicly announce its future procurement plans.
All defense tenders are closed and are sent only to a few specific
companies.”

  Al Qaida Organization in the Islamic Maghreb, North African arms race, Report: Cash-flush Algeria no longer relying on Russia as top military supplier, SDI