أبعاد إقتصادية
Volume 16, Numéro 1, Pages 219-242
2026-06-30
The Infrastructure-formalization Gap: Electronic Payments And Informal Economy Persistence In Algeria
Authors : Ouchtati Sarra . Bechichi Walid .
Abstract
Algeria's informal economy represented between 27.7 and 32.2 percent of GDP as of 2020—a persistently high share that decades of administrative modernization have failed to reduce. Drawing on longitudinal data from Algeria's GIE and the Bank of Algeria (2016–2025), this study identifies a central paradox: despite substantial electronic payment infrastructure growth since 2016, informal activity remains structurally persistent. The most revealing indicator is POS terminal utilization—with approximately 78,774 terminals deployed yet only 10 million annual transactions recorded by 2025—suggesting that merchants maintain nominal compliance while functionally preserving cash-based operations, a divergence this study terms the infrastructure-formalization gap. To close this gap, the study proposes a two-stage policy strategy combining regulatory enforcement targeting deliberate non-compliance with financial inclusion measures targeting passive cash dependency. Durable formalization requires both stages pursued concurrently as infrastructure expansion alone is insufficient.
Keywords
Algeria ; Cash displacement ; Electronic payments ; Formalization ; Informal economy
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