Algeria's Investment Reforms Attract $67.5 Billion in New Projects, Focus on Digitalization
Image: Rass El Mal
Takeaway
The surge in planned investment projects signals growing confidence in Algeria's economic reforms, particularly in sectors beyond hydrocarbons. Investors should closely monitor the implementation of the digital one-stop shop and the proposed mining legislation, as these developments could significantly reduce bureaucratic delays and unlock new opportunities. Companies in technology and renewable energy stand to benefit most from these improvements.
Algeria's new investment framework has spurred approximately 20,000 new projects valued at over 9,000 billion dinars (~$67.5 billion), with the potential to create more than 525,000 jobs, according to Prime Minister Nadir Larbaoui. Larbaoui highlighted these figures during an informational day dedicated to enhancing the effectiveness of the 'one-stop shop' for investments. The event, organized by the Algerian Investment Promotion Agency, focused on streamlining investment procedures and fostering trust between the government and investors. AAPI launched a digital platform in 2024 to grant businesses access to state-owned land.
President Abdelmadjid Tebboune initiated reforms to transform Algeria into an attractive destination for investment and to stimulate entrepreneurship. Despite these efforts, international firms have expressed concerns regarding constantly shifting laws and regulations, which increase commercial risk for foreign investors. Other challenges include complicated customs procedures, bureaucracy, and difficulties in monetary transfers. In 2020, the government eliminated the 51/49 rule requiring majority Algerian ownership for all new businesses, but it retained this requirement for strategic sectors like energy, mining, defense, transportation, infrastructure, and pharmaceuticals. However, the 2021 Finance Law reinstated the 51/49 rule for companies importing goods for resale.
To improve investor services, the Algerian Investment Promotion Agency (AAPI) and the High Commission for Digitalization signed two agreements to enable AAPI to utilize sovereign cloud resources and implement a digital one-stop shop. This digital platform aims to improve investor support and streamline administrative processes. The Confederation of Algerian Employers-Citizens (CAPC) has called for accelerated digitalization and the removal of bureaucratic obstacles to further support investment and promote national manufacturing. Since the implementation of the new investment law in 2022, Algeria has recorded approximately 21,000 investment projects, with a total value of nearly $70 billion.
The sectors attracting the most Foreign Direct Investment (FDI) in 2023 were extractive industries ($829 million), manufacturing ($133 million), and construction ($74 million). The United States is the leading investor in Algeria (29%), followed by Italy and France (10% each), Spain (7%), and the United Kingdom (6%). While Algeria's economy is heavily dependent on hydrocarbons, which account for 95% of export revenues and 40% of government income, the government is prioritizing investment in agriculture, information and communications technology, mining, renewable energy, and healthcare to diversify the economy.
Looking ahead, Algeria aims to further improve its investment climate by addressing bureaucratic hurdles and promoting digitalization. The government is considering draft mining legislation that would allow the share of foreign ownership in mining projects to increase from 49% to 80%, but as of June 2025, the draft law is pending further legislative approvals. The World Bank is supporting Algeria's efforts to improve its business climate. The full impact of these reforms on attracting sustained FDI and diversifying the Algerian economy will depend on consistent implementation and addressing the concerns of international investors.