Algeria Announces Major Wage and Benefit Hikes in Sweeping Economic Reforms
In a significant move aimed at bolstering household finances and economic stability, the Algerian government has approved a substantial increase to the national minimum wage and unemployment benefits, marking one of the most ambitious social spending initiatives in recent years.
Direct Impact on Workers and Job Seekers
Following a Council of Ministers meeting chaired by President Abdelmadjid Tebboune, the state has mandated that the Guaranteed Minimum Wage (SMIG) will rise from 20,000 to 24,000 Algerian dinars, effective January 2026. This 20% increase represents the most significant jump in decades, far surpassing the 2,000 dinar adjustment made in 2020.
Concurrently, support for the unemployed is also set to grow, with unemployment benefits increasing from 15,000 to 18,000 dinars. In a push for administrative efficiency, President Tebboune has called for a simplification of the benefit renewal process, stipulating that payments must be guaranteed for a minimum of one year and be renewable.
Broader Economic Context and Strategic Shifts
Analysts view these measures as a direct response to persistent inflationary pressures and the erosion of purchasing power, which have been key concerns for Algerian households. The decision signals a strategic pivot towards reinforcing domestic consumption and social safety nets as pillars of economic policy.
“This isn’t just a routine adjustment,” explains a regional economic analyst. “A hike of this magnitude, set for 2026, is a planned economic stimulus. It provides businesses with a clear timeline for adaptation while promising tangible relief to the lowest-income segments of the population.”
Beyond Wages: A Multi-Sector Reform Agenda
The cabinet meeting also yielded decisive policies beyond social benefits, revealing a comprehensive strategy targeting energy independence and industrial growth.
President Tebboune announced a historic milestone: Algeria has begun exporting locally refined gasoline for the first time since independence. To build on this achievement, national energy meetings will be convened to update production data and set export priorities.
Further energy sector directives include:
- Tasking the Prime Minister with negotiations to establish Naftal service stations in Mauritania.
- Developing a national policy for fuel consumption control, including the introduction of prepaid cards for border regions.
- Expediting the completion of the new Hassi Messaoud refinery to boost domestic supply and export capacity.
Industrial Policy and Continental Ambitions
The government’s industrial strategy also came into focus, with Naftal being granted exclusivity for the import and production of petroleum derivatives. To address immediate market needs, the council authorized the import of 500,000 tires while local manufacturing capacity is scaled up.
Looking outward, President Tebboune emphasized the strategic importance of the upcoming African Start-up Conference, positioning it as a key forum for enhancing continental economic cooperation and fostering a growth model driven by innovation and youth.
This report is based on information originally published by Algerie360.