Algeria Sets Local Investment and Solidarity Fund Contributions for 2027

The Algerian government has issued three joint ministerial decisions to regulate the financial resources of local groups. These decisions, signed by the Ministers of Interior and Local Communities, Transport, and Finance, set the contribution rates for municipalities and provinces to the Local Groups' Solidarity and Guarantee Fund and the Investment and Equipment Fund for municipal budgets for the 2027 financial year.

The first decision sets the municipalities' contribution to the Solidarity and Guarantee Fund at 5% of their direct and indirect tax revenues, after deducting 2% for the Guarantee Fund. The second decision sets the provinces' contribution at 3% of their direct and indirect tax revenues, after deducting 2% for the Guarantee Fund. These contributions will be used to support priority projects and finance facilities that local groups cannot afford on their own.

The third decision sets the Solidarity and Guarantee Fund's contribution to the Investment and Equipment Fund for municipal budgets at 10% for 2027. The decision also outlines the distribution of credits generated by the investment account in this fund, which will be allocated to support equipment and investment projects, indirect financing, direct financing, and compensation for allocations or grants.

The new decisions aim to address the existing imbalance in local financial resources, where some municipalities have significant tax revenues while others, particularly in remote and mountainous areas, struggle to cover their daily expenses. The Solidarity and Guarantee Fund will help reduce regional disparities and ensure a minimum level of public services across the country.

The government has considered the different capacities of municipalities and provinces to contribute to the funds, taking into account their specific resources and tasks. Municipalities are responsible for providing basic services such as water, sanitation, and primary education, while provinces handle larger-scale projects like roads and hospitals.

The decisions are significant as they not only establish a solidarity mechanism but also direct a substantial portion of resources towards productive investment. The Investment and Equipment Fund for municipal budgets will enable the implementation of projects that create temporary and permanent jobs, improving public services and infrastructure.

The new rules have been published in the Official Gazette, providing clarity and transparency for local authorities and financial stakeholders. By setting clear contribution rates and allocation rules, the government aims to reduce conflicts and promote more efficient management of local resources.

Key points

• Algeria's government sets local groups' contribution rates to solidarity and investment funds for 2027.