Algerians are experiencing increasingly difficult end of the month, between debts and deprivations. But next year, they should see their charges lightened, since the authorities announce an improvement in the incomes of employees, retirees and the unemployed, hard hit by the surge in consumer products and shortages, which do not weaken. And this despite tougher penalties against speculators that can go as far as life imprisonment. Things became clearer on November 14 when the Head of State, Abdelmadjid Tebboune, instructed the government, during the Council of Ministers, to work on a salary increase from January 2023.
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In the popular district of Bab el-Oued, however, the news is greeted with great skepticism. “It depends how high. If it’s 1,000 or 800 dinars as usual, let them keep this revaluation,” retorts Zahia, 70, met at the market. Housewife, the septuagenarian is struggling to make ends meet for the month with the 20,000 dinars (about 150 euros) of reversion of the retirement pension of her deceased husband. “What should I put in my pot to feed six bellies with this meager monthly budget? “, she complains.
Overpriced fruits and vegetables
Around her, many customers scrutinize the prices, compare them at several merchants, and leave with small quantities with each purchase. Potato and onion 100 dinars per kilo, tomato 70 dinars, tangerine between 250 and 350 dinars, depending on the quality, apple and pear 400 dinars… Fruits and vegetables are beyond the reach of small purses. And the regulars of this market reputed to be the cheapest in Algiers, like Zahia, gave up filling their baskets a long time ago. The deterioration of the purchasing power of Algerians is also strongly felt by traders, who have difficulty selling their goods.
“Tomatoes and potatoes used to be within everyone’s reach. French fries-omelet was the most economical dish for large families. With the current price of the potato, it takes at least 500 dinars to provide a single meal for four members of a family,” laments a vegetable vendor. At the Errahma butcher in the Trois Horloges market, chicken carcasses are torn off to flavor lentil and bean dishes. “Before, I liked to eat shrimp. Since their price has climbed to 2,500 dinars per kilo, I have even forgotten the taste”, ironically an old man.
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To cushion the effect of inflation on households, several measures have been taken in recent years by the government, including a 14 to 16% increase in wages, a 2 to 10% increase in retirement pensions and an allowance 13,000 dinars (about 94 euros) per month for the unemployed. Salaries equal to or less than 30,000 dinars were thus exempted from global income tax, allowing a net gain ranging from 800 to 3,600 dinars. The guaranteed minimum national wage, meanwhile, went from 18,000 to 20,000 dinars in April 2021, with retroactive effect from June 1, 2020.
Serial resets and tax exemptions
The two measures required the mobilization of a budgetary envelope of 400 billion dinars per year, to which are added 145 billion dinars annually for the financing of unemployment benefits for first-time job seekers. Then the executive made public a new salary scale for the civil service extended to bonuses and allowances. According to the Directorate General of the Budget at the Ministry of Finance, the revaluation would represent between 5,600 and 10,000 dinars (less than 50 euros).
Regular efforts that have not, however, absorbed the upward trend in the prices of consumer products. It is therefore unlikely that the increase in revenues announced for 2023 will fundamentally change the situation. Already in 2014, the Autonomous National Union of Public Administration Staff had, following a survey on purchasing power, estimated the minimum wage likely to cover the basic needs of a family of five at more than 60,000 dinars.
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A study conducted by the Algerian Union of Education and Training Workers maintains that in twenty-five years, the purchasing power of Algerians has fallen by 60%. The executives of the trade union organization have, to arrive at this figure, drawn up a comparative report of the prices and wages of 1995 at 2021. “The salaries of before made it possible to live better than now”, they conclude.
“We must act on inflation, not on wages”
“The wage increases that have taken place in recent years have not been able to improve purchasing power. This is a bad solution for a real problem. Instead of acting on the denominator, which is inflation, we are looking for easy solutions by increasing the minimum wage”, explains to Young Africa statistician and economist Mohamed Yaziz Boumghar.
If in the streets of Algiers, more and more people are going through the trash in search of edible remains, there are still no statistics to quantify the level of poverty and the cost of living. “After sixty years of independence, it is difficult to accept this kind of shortcomings in the statistical apparatus. In the absence of these two ad hoc and regular indicators, the situation can only be assessed by analyzing the evolution of declared real salaries”, regrets Mohamed Yaziz Boumghar. The information on wages comes, according to him, from two sources: national accounts and surveys on wages conducted by the National Statistics Office (ONS).
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“National accounting allows us to know who has benefited from the creation of additional wealth over a long period. What economists call the sharing of added value. If we reason over the last twenty years (2000-2021), out of 100 dinars of wealth created, 10 dinars remunerated the action of the State in the form of tax, 14 dinars the employee and 67 dinars the heads of ‘company’, analyzes the statistician.
Development of work from home
In addition to the food basket, the electricity bill, health care and clothing expenses also weigh more and more heavily on family budgets. “Faced with situations of high inflation like the one we are currently experiencing, the first reaction is to adjust consumption and obtain other sources of income by practicing additional paid activities to hold on. This is how we have seen the development of work at home for women and home service activities (jobbers)”, continues Mohamed Yaziz Boumghar.
As the economic crisis drags on, Algerians have also ended up depriving themselves of certain pleasures: sweets, imported cosmetics, dining out and vacations. To reduce her expenses, Nabila, an executive in a marketing company, gave up her passion for shopping. “I can’t afford anything anymore and that depresses me a lot,” she says.
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The favorable situation for hydrocarbon exports, both in terms of quantity and prices, explains the economist Brahim Guendouzi, gives “appreciable leeway to the executive in order to keep intact the economic and social balances, weakened by the inflationary tension which manifested itself from 2021, as a result of the fallout from the pandemic”. He also expects the maintenance of the financial effort devoted by the State to the fragile and middle social strata. The inhabitants of the disadvantaged district of Bab el-Oued fear an even more difficult year 2023, with a new course of sacrifices.