Algeria’s election dispute spooks investors and diaspora

Opposition candidates have filed a court appeal challenging the results of Algeria’s recent presidential election, casting a shadow over the country’s political stability and economic outlook. The appeal, lodged by figures including former prime minister Ali Benflis and opposition leader Abdelmadjid Tebboune’s rival Abderrazak Makri, alleges irregularities in the vote that handed Tebboune a second term. According to ASHARQ AL-AWSAT, the legal challenge questions the transparency of the electoral process, citing discrepancies in voter turnout and ballot counting.

The dispute comes at a delicate moment for Algeria’s economy. The government has been pushing for foreign investment in sectors like renewable energy, agriculture, and digital startups, with initiatives such as the 2022 Investment Law offering tax breaks and land incentives. However, political uncertainty has historically deterred investors. In 2023, Algeria attracted just $1.2 billion in foreign direct investment (FDI), a fraction of the $10 billion Morocco secured in the same period, according to the United Nations Conference on Trade and Development (UNCTAD).

Legal battle tests business confidence

The opposition’s appeal is not the first to rock Algeria’s political landscape. In 2019, mass protests led to the resignation of longtime president Abdelaziz Bouteflika, and subsequent elections were marred by low turnout and allegations of fraud. This time, the stakes are higher for entrepreneurs. The Algerian diaspora, which sends an estimated $2 billion in remittances annually, has been a key source of capital for local startups, particularly in tech and real estate. But diaspora investors, wary of political instability, may hold back until the legal challenge is resolved.

Local business leaders are also watching closely. The Algerian Business Leaders Forum (FCE), which represents major firms like Sonatrach and Cevital, has called for calm, urging the government to address the opposition’s concerns swiftly. “Investors need predictability,” said FCE president Reda Hamiani in a recent statement. “A prolonged legal battle could delay critical projects, including the $3 billion solar energy plan.”

Economic reforms at risk

The election dispute threatens to derail Algeria’s economic reforms. Tebboune’s government has been working to diversify the economy away from hydrocarbons, which still account for 90% of export revenues. In 2024, the state launched a $5 billion fund to support startups and small businesses, with a focus on agribusiness and digital innovation. But the fund’s rollout has been slow, and the legal challenge could further delay disbursements.

The banking sector, which has been liberalizing under the guidance of the Bank of Algeria, is also feeling the pressure. Interest rates have remained high to combat inflation, but political uncertainty could lead to capital flight. “Banks are already cautious about lending to new businesses,” said a senior executive at Banque Extérieure d’Algérie (BEA). “If the election dispute drags on, we could see a tightening of credit.”

Diaspora’s role in the balance

The Algerian diaspora, particularly in France, Canada, and the Gulf, has been a lifeline for the economy. Remittances have funded everything from real estate developments in Algiers to tech startups in Oran. But the diaspora’s confidence is fragile. In 2021, remittances dropped by 15% following political unrest, according to the World Bank. This time, entrepreneurs in the diaspora are adopting a wait-and-see approach.

“Many of us want to invest in Algeria, but we need stability,” said Karim Benziane, a Paris-based entrepreneur who runs a logistics startup. “If the legal challenge leads to protests or further unrest, we’ll hold off on expanding our operations there.” Benziane’s sentiment is shared by others in the diaspora, who are closely monitoring the court’s decision.

What’s next for Algeria’s economy

The Constitutional Council, Algeria’s highest legal authority, is expected to rule on the opposition’s appeal in the coming weeks. If the court upholds the election results, the government will likely push ahead with its economic agenda, including the privatization of state-owned enterprises and the expansion of the Algiers Stock Exchange. But if the appeal succeeds, Algeria could face a prolonged period of political uncertainty, with potential snap elections.

For now, businesses are bracing for impact. The Algerian Chamber of Commerce and Industry (CACI) has advised its members to prepare contingency plans, including diversifying supply chains and securing alternative financing. “We’re telling our members to expect delays in government approvals and contracts,” said CACI president Mohamed Laïd Benamor. “The next few months will be critical.”

Key takeaway for entrepreneurs
Algeria’s election dispute could delay critical economic reforms, including the $5 billion startup fund and solar energy projects. Diaspora investors may hold back until the legal challenge is resolved, while local businesses should prepare for potential disruptions in government approvals and credit access. The outcome of the court’s decision will shape Algeria’s business climate for the next year.