The Role of Port Development in Enhancing Economic Diversification and Livelihoods: Algeria’s Path to SDGs.

Ports are pivotal in advancing economic diversification, trade, and sustainable development, particularly in the context of Algeria’s Vision 2030 and the Sustainable Development Goals (SDGs).

As Algeria seeks to reduce its dependency on hydrocarbons, strategic port development offers a pathway for industrial expansion, investment attraction, and employment generation. Drawing insights from successful international models, such as Oman’s Duqm and Sohar Ports, this article explores the role of ports as catalysts for economic transformation. Key recommendations include investment in green port infrastructure, enhanced regional connectivity, and mobilization of public-private partnerships (PPP) to support sustainable economic growth.

By leveraging these strategies, Algeria can strengthen its position within the Mediterranean-Africa economic corridor, boost regional trade integration, and foster long-term economic resilience. 

Ports as Catalyst for Economic Diversification 

Ports drive economic diversification by enhancing trade, attracting investments, and supporting SDGs. Algeria, with its strategic Mediterranean location, can harness port development to transition from hydrocarbon dependency to a diversified economy.

Algeria’s strategic Mediterranean coastline offers significant potential for regional trade facilitation, positioning the country as a critical node within the Mediterranean Africa economic corridor. This article proposes targeted measures, including investment risk mitigation, regional connectivity enhancement, and green port infrastructure development, to advance economic diversification and improve livelihoods.

These strategies align with the Islamic Development Bank Group (IsDBG)’s objectives, which focus on innovation, fostering regional economic integration, and promoting sustainable development. By doing so, they provide valuable, actionable insights for policymakers and development stakeholders.

Ports and Sustainable Development Goals 

Modern ports contribute to SDGs by:

• Trade Growth: The development of export-oriented industrial zones (EOIZs) enhances Algeria’s capacity to diversify its export portfolio, reducing reliance on raw material exports such as hydrocarbons. 

• Investment Facilitation: Port expansions and improvements help Algeria to attract more Foreign Direct Investment (FDI) by enhancing Algeria’s competitiveness in global trade. 

• Job Creation: Ports create significant employment opportunities both directly and indirectly through increased economic activity. 

• Environmental Sustainability: The integration of renewable energy technologies, such as solar power, into port operations, combined with investments in liquefied natural gas (LNG) terminals, reduces the carbon footprint of maritime activities. This contributes to advancing green growth objectives. 

ICIEC’s Experience in Oman Ports:  

The ICIEC has facilitated the development of port infrastructure in Oman, notably in Duqm and Sohar. 

Sohar Port as a Model for Diversification  

Sohar Port in Oman stands as a global benchmark for port-led economic diversification and sustainable development. Its success is rooted in a multi-faceted approach that integrates industrial growth, renewable energy, and strategic partnerships. Recent reports indicated that Sohar Port and Freezone had attracted over USD 30 billion in investments as of 2024, contributing more than 2.1% to Oman’s GDP and generating nearly 36,000 direct and indirect jobs. Key achievements include:

• Establishment of a free zone, attracting more than USD 25 billion in industrial investments.

• Development of LNG terminals and adoption of solar energy, contributing to a 15% reduction in carbon emissions.

• Implementation of strategic PPPs, ensuring continuous port modernization and operational efficiency.

This model underscores the potential for Algeria to replicate similar strategies in its port sector to drive economic transformation. 

Algeria’s Port Sector: Unlocking Economic Potential 

Algeria possesses the necessary resources to position its ports as regional economic hubs. To achieve this, the following measures are recommended: 

• Expansion of Free Zones: Enhancing port-based free zones to attract manufacturing and logistics sector investments.

• Strengthening Regional Connectivity: Improving port linkages to the Mediterranean-Africa economic corridor and cross-border trade networks. 

• Adoption of Green Port Strategies: Investing in renewable energy infrastructure, LNG storage facilities, and carbon-neutral port operations. 

• Mobilization of Public-Private Partnerships (PPPs): Leveraging IsDB and ICIEC risk management instruments to de-risk infrastructure projects and promote private sector participation. 

Conclusion  

Algeria is heavily reliant on oil and gas exports, like many countries in the MENA region. Promoting export-oriented industrial zones is a key strategy for diversifying the Algerian economy, creating jobs, and achieving sustainable development goals.

Algeria can transform its ports into sustainable growth engines and catalyze economic diversification, SDG achievement, and regional integration. 

Strategic Actions for Sustainable Port Development.  

To ensure that Algeria’s port development strategy effectively supports economic diversification and aligns with the Islamic Development Bank’s (IsDB) Sustainable Development Goals (SDG) agenda, a comprehensive approach is required. This involves enhancing infrastructure efficiency, fostering investment opportunities, and integrating sustainability initiatives. The following policy measures should be prioritized to maximize economic benefits and reinforce Algeria’s position as a regional trade hub: 

• Enhancing PPP Frameworks: Establishing clear regulatory guidelines to facilitate private sector engagement in port infrastructure development.

• Expanding Investment Risk Mitigation: Increasing ICIEC’s investment insurance collaboration to de-risk long-term infrastructure financing.

• Integrating Ports with Regional Economic Corridors: Strengthening multimodal connectivity through alignment with cross-border transport infrastructure projects (e.g., the Trans-Saharan Highway).

• Developing Innovation Hubs within Ports: Creating technology-driven economic clusters to foster port sector competitiveness and digital transformation.

• Allocating 20% of Port Development Budgets to Renewable Energy Infrastructure: Committing to sustainability-focused investment strategies, ensuring that green energy solutions are integrated into future port expansion projects.

By implementing these policy measures, Algeria can transform its port infrastructure into a key driver of economic diversification, strengthen its position in regional trade, and achieve long-term sustainable development goals.