As Covid-19 cases hit new heights in Algeria, challenges continue to mount for the country’s state-dominated banking sector. A slump in oil and gas revenues from the early days of the pandemic has caused a series of challenges, including low liquidity, under-capitalisation and a rise in bad loans.
While the country’s private lenders have continued to post robust growth figures by focusing on specific niches of the economy, the sector as a whole faces a reckoning when measures put in place by the central bank, Banque d’Algérie (BdA), begin to be unwound. Although the country’s newly-elected government has expressed the need for reform and increased private sector involvement in the banking sector, hope that such reforms will come to pass remain dim.
