Algeria’s recent tensions with the United Arab Emirates over alleged election interference are sending ripples through the business community, raising concerns among local and diaspora entrepreneurs about foreign influence in domestic politics. The row began when Algeria’s government publicly accused Abu Dhabi of meddling in its 2025 presidential elections, a claim denied by UAE officials. While the political fallout unfolds, Algerian founders and investors are watching closely, wary that escalating rhetoric could affect investment climate perceptions, regulatory predictability and cross-border partnerships in the Maghreb and Gulf.
The dispute centers on claims from Algiers that certain Gulf states, particularly the UAE, are using financial and diplomatic channels to sway Algeria’s electoral outcome in favor of candidates perceived as more aligned with foreign interests. Algeria’s Ministry of Foreign Affairs issued a formal statement last month expressing “deep concern” over foreign interference, singling out unnamed Gulf partners. The ministry did not provide evidence but pointed to “recent provocative statements” from Abu Dhabi-linked media and think tanks. UAE authorities dismissed the accusations as “baseless,” accusing Algeria of using the interference narrative to distract from domestic challenges.
For Algerian entrepreneurs, the timing of this crisis is especially sensitive. The country is pushing ahead with economic reforms aimed at attracting foreign capital, including the renewal of its 2025 investment law that promises tax breaks and faster licensing for startups in renewable energy, ICT and agro-industries. Entrepreneurs in Algiers, Oran and Constantine are noting that international investors, especially from Europe and the Gulf, are adopting a “wait-and-see” attitude. “We’ve seen investors pause signing term sheets,” said Kamel Boukhalfa, founder of a solar tech startup in Hassi Messaoud. “They’re worried that diplomatic tensions could spill into business permits or contract enforcement.”
The stakes are high for sectors like energy and finance. Algeria’s state-owned oil company SONATRACH, already under pressure from declining oil revenues and rising domestic energy demand, has warned of potential delays in power purchase agreements with foreign firms if the political climate deteriorates. In 2024, SONATRACH signed preliminary deals worth $1.2 billion with Italian and Spanish energy firms for renewable projects in the Sahara. But in recent weeks, several European investors have flagged “regulatory uncertainty” in their internal reviews, according to energy analysts at Algeria Energy Monitor, a local research group.
Diaspora entrepreneurs, particularly those in the UAE and France, are also feeling the impact. Algerian tech founders based in Dubai report a chill in networking events and joint venture talks. “We used to host bi-monthly pitch sessions with Algerian startups looking to enter the UAE market,” said Leila Haroun, a venture partner at Algiers-Dubai Ventures. “Now, those events are on hold. Some partners in the Emirates are asking us to ‘clarify’ our position on Algeria’s political orientation before moving forward.” Meanwhile, entrepreneurs in France are seeing slower capital flows from Gulf-based Algerian investors who are reportedly reviewing their exposure to Algerian startups until the regional climate stabilizes.
Amid the diplomatic noise, Algeria’s government is trying to reassure the private sector. In a rare public briefing last week, Finance Minister Mohamed Loukal emphasized that “the economy remains open and foreign investment welcome,” adding that the government is committed to protecting private property and contracts. He cited ongoing infrastructure projects in the ports of Bejaia and Djen Djen as proof of continued foreign engagement. Still, entrepreneurs note that such statements are not enough to offset the perception of risk.
The repression of civic space ahead of the elections, highlighted by Amnesty International in September 2024, also raises concerns about long-term stability. The human rights group documented the detention of at least 23 activists, journalists and opposition figures since mid-2024, many on charges related to “undermining national unity.” While the government defended the arrests as necessary to prevent “foreign-backed subversion,” entrepreneurs worry that a crackdown on dissent could deter international partners who prioritize rule of law and transparency.
In the run-up to the presidential vote, Algeria’s business climate is caught between competing pressures: the need for foreign capital and the impulse to assert national sovereignty. The Algerian diaspora, an important source of remittances and know-how, is watching closely. Remittances from Algerians abroad reached $14 billion in 2023, according to Bank of Algeria data, and a slowdown in diaspora investment could strain the country’s foreign reserves, currently around $60 billion.
For now, local entrepreneurs are hedging their bets. Some are shifting focus to domestic markets, betting on growing consumer demand in cities like Tlemcen and Annaba. Others are accelerating partnerships with Tunisian, Moroccan or European firms to reduce exposure to Gulf-related risks. “We’re doubling down on the Maghreb corridor,” said Yacine Zeggai, CEO of a fintech company in Algiers. “The intra-Maghreb trade agreement offers real opportunities, and it’s less exposed to the Gulf turbulence.”
Key takeaway for entrepreneurs
Algeria’s diplomatic tensions with the UAE risk cooling foreign investor appetite, especially in energy and tech sectors. Entrepreneurs should anticipate slower decision-making cycles from Gulf and European partners in the coming months. Diversifying partnerships within the Maghreb or with non-Gulf markets may offer more stable growth paths while the political climate stabilizes.
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