Algeria
Algeria exhibits keystone-species dynamics: state-owned Sonatrach controls 95% of exports, supplying 25% of EU gas imports while the Sahara holds untapped renewable potential.
Algeria is Africa's largest country by area, yet 80% of its 2.38 million square kilometers is Sahara desert. The population clusters along the Mediterranean coast, creating an economy that behaves like an organism living on an edge—the fertile northern strip that French colonizers occupied for 132 years until independence in 1962. Oil was discovered in the southern Sahara in 1956, just before independence, and this accident of timing shaped everything that followed.
Hydrocarbons now constitute 95% of export earnings and 60% of government revenue, making Algeria a textbook case of resource dependence. State-owned Sonatrach functions as the economy's keystone species—controlling oil and gas production that supplies 25% of the EU's natural gas through the Medgaz and Transmed pipelines. This makes Algeria Europe's second-largest pipeline gas supplier after Norway, a position that gained strategic importance after 2022.
The numbers tell the story of path dependence: GDP of $266-288 billion, 3.4-4.5% growth in 2025, and Africa's largest economy by some measures. But non-hydrocarbon exports, though tripled since 2017, reached only $7 billion in 2024—just 2% of GDP. The government targets $30 billion in non-oil exports by 2030, but diversifying an economy structured around extraction requires overcoming decades of accumulated specialization.
Algeria is now positioning for a different future. In January 2025, it joined the SouthH2 Corridor project to supply green hydrogen to Europe, attempting to convert its solar-drenched Sahara into the substrate for a new energy export industry. Whether Algeria can evolve from fossil fuel exporter to renewable energy hub will determine if it escapes the resource trap or remains locked into a niche that climate transition may eventually eliminate.
Related Mechanisms for Algeria
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States & Regions in Algeria
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