June 5, 2018 / 9:01 PM / 5 months ago

Algeria cabinet endorses higher customs duties

ALGIERS (Reuters) - Algeria’s cabinet decided on Tuesday to lift a ban on imports of hundreds of goods in favour of higher customs duties, the presidency said.

The North African OPEC member nation has been trying to cope with pressure on state finances since oil prices started falling in mid-2014, halving oil and gas earnings, which account for 60 percent of the state budget.

In the latest attempt to offset the fall in energy revenues, the government of Prime Minister Ahmed Ouyahia drafted a plan to impose customs duties of between 60 and 200 percent on finished goods.

The cabinet, chaired by President Abdelaziz Bouteflika, endorsed the higher duties, the statement said without elaborating. The plan needs final approval by parliament, where Bouteflika’s supporters command an overwhelming majority.

Addressing the cabinet, Bouteflika urged Algerian businessmen to take advantage of “this approach to increase investment and boost production of goods and services to meet local demand”, the statement said.

The government has said customs duties are meant to boost domestic firms and ease foreign competition, as Algeria relies heavily on imports due to its poor non-energy sector.

Early this year the government banned the import of 851 products, including mobile phones, home appliances and foodstuffs but the move was unpopular and did little to reduce the value of purchases over the last five months.

Separately, Bouteflika shelved a government plan to raise fees for identity papers, passports and driving licenses, a statement released by official news agency APS said.

Bouteflika, 81, has not yet announced whether he will run for a fifth term in the April 2019 election, but supporters from the ruling party, unions and other public organisations have urged him to do so despite his shaky health.

Editing by Ulf Laessing and Mark Heinrich

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