VIII.           TRADE AND PROJECT FINANCING

Banking System:  The Algerian banking system consists of the Central
Bank (the Bank of Algeria), five state banks, one development bank, one
national savings bank, and one private bank that is owned jointly by one
of the state banks and the Saudi Al Baraka Group.  Until this year,
public enterprises long enjoyed privileged access to credit from
Algeria's state banks.  As a result, the banking system in Algeria is
severely handicapped by the prevalence of non-performing public sector
enterprise debt.  The GOA is developing plans to reform both the
nation's public sector enterprises and the banking system.  In the case
of the latter, the goal will be to encourage greater competition,
private sector participation, and the development of a secondary money
market and stock exchange.


Financing:  Significant additional foreign exchange is expected to be
available for merchandise imports in 1994.  Following the approval by
the IMF Board of Algeria's stand-by program, Algeria's Paris Club
creditors agreed to reschedule $5.3 billion in principal and interest
that was due to be paid them through May of 1995.  In addition,
significant new external financing is expected to be made available from
multilateral sources including $1 billion from the International
Monetary Fund, $175 million from the World Bank which represents the
second tranche of the Enterprise and Financial Sector Adjustment Loan,
and as yet undetermined new financing from the Islamic Development Bank,
the African Development Bank, and the Arab Monetary Fund.  Finally, the
European Community has approved the release of $175 million in balance
of payments support for Algeria.

Export Import Bank Financing:  The Board of Directors of the U.S. Export
Import Bank decided on April 14, 1994 to go off cover on medium and long
term loans and guarantees for Algeria, as well as medium term insurance.
ExIm remains open on short-term (e.g. repayment terms of 180 days, and
for some commodities, 360 days) transactions involving the five Algerian
state banks and Sonatrach.  ExIm is also proceeding with disbursement
under its guarantee program of some $700 million worth of transactions.
With more than $2.2 billion in exposure, ExIm continues to be one of
Algeria's leading creditors.  For further information regarding ExIm
programs in Algeria, please contact Hala El Mohandes at ExIm (tel:
202-566-8945).

Other External Financing:  In addition to the above financing sources,
France has indicated it will provide 6 billion French francs (about $1
billion), Spain has pledged support of $550 million, and Italy is also
expected to provide new financing.

List of Banks with Correspondent U.S. Arrangements:  Following is a
listing of the correspondent banking relationships that the five
Algerian banks have with U.S. banks.

 Banque de l'Agriculture et du Developpment Rural
 Bank of America NY
 CoBank Denver                Credit Populaire d'Algerie
 Citibank                     Citibank
 Bankers Trust                UBAF New York
 First Chicago                Chemical Bank
 Rabo Bank                    Mellon Bank


 Banque Nationale D'Alg rie   Banque Exterieure D'Algerie
 American Express Bank        Bank of New York
 Bank of America              BankAmerica International
 Bank of New York             Bankers Trust
 Bankers Trust                Chase Manhattan
 Chase Manhattan Bank         Chemical Bank
 Citibank                     Citibank
 CoBank Denver                First Chicago
 First Interstate Bank
   of California              Banque de Developpement Local
 Mellon Bank                  Citibank
 Pittsburgh National Bank     Credit Lyonnais NY
 United Bank for Africa       Rabo Bank
                              United Bank for Africa