Algeria’s economic shifts—energy, digital, and SME reforms

Energy transition accelerates, but hydrocarbons remain central

In parallel, Algeria’s solar capacity targets remain unchanged: 15 GW by 2035, with 4 GW installed by 2024. Current installed solar capacity stands at 500 MW. The government has not released updated figures on private sector participation in renewable projects since 2022, when foreign firms accounted for 30% of approved solar tenders.

Europe’s role in Algeria’s green transition is expanding. The European Union committed €1.5 billion in grants and loans in 2024 to support hydrogen and solar projects. No new agreements were signed this week, but negotiations continue on a 10 GW green hydrogen pipeline to Italy by 2030.

For entrepreneurs, the energy sector offers two distinct paths: upstream oil services (drilling, logistics, equipment supply) and downstream renewables (solar panel assembly, battery storage, grid integration). The oil bid round will require local partnerships for foreign bidders. Renewable projects remain dominated by state tenders, with limited direct private investment opportunities.

Digital infrastructure expands, but payment gaps persist

First, Ooredoo completed its 5G rollout to all 58 provinces. The network now covers 70% of the population, up from 45% in 2023. Mobile internet speeds average 42 Mbps, compared to 18 Mbps in 2022. No data was released on enterprise adoption rates.

Second, the electronic payment market surpassed 22 million active cards. The Central Bank reported 1.2 million new cards issued in Q1 2025, a 15% increase year-on-year. However, cash still accounts for 85% of retail transactions. Fintech startup Gifty launched a payment app targeting small merchants. The app processes 5,000 daily transactions, with a 0.5% fee per sale. No user growth targets were disclosed.

Third, Yassir, Algeria’s largest ride-hailing and delivery platform, reached a $2.1 billion valuation after a $300 million funding round. The company now operates in 15 Algerian cities and employs 120,000 drivers. Yassir’s partnership with Huawei will deploy AI-driven logistics software in Algiers and Oran by Q3 2025.

For e-commerce entrepreneurs, the payment bottleneck remains critical. Only 12% of Algerian SMEs accept digital payments, according to a 2024 World Bank survey. Yalidine, a local delivery firm, expanded its last-mile network to 28 wilayas (provinces), up from 12 in 2023. The company offers same-day delivery in Algiers and next-day service in major cities.

Economic outlook mixed as oil prices decline

The government’s 2025 budget assumes $80 oil and a 3.5% deficit. Public debt reached 52% of GDP in 2024, up from 48% in 2023. Foreign exchange reserves fell to $58 billion in March 2025, down from $62 billion a year earlier.

Non-hydrocarbon exports rose 8% in 2024, driven by pharmaceuticals (+12%) and agri-food (+9%). The government aims to double non-oil exports to $10 billion by 2027. No sector-specific targets were announced this week.

For entrepreneurs, the economic slowdown increases reliance on state contracts. The 2025 budget allocates 2.1 trillion DZD ($15.5 billion) to public investment, with 30% earmarked for infrastructure. Private sector credit growth slowed to 4.2% in 2024, down from 6.8% in 2023.

Business creation and legal reforms target startups

First, the government waived IPO fees for startups until 2028. The measure applies to companies with annual revenues below 500 million DZD ($3.7 million). No data was released on the number of eligible firms.

Second, the National Center for Trade Register (CNRC) now requires digital submission of production data for all physical goods. The rule applies to 12,000 manufacturing firms. Compliance deadlines vary by sector: pharmaceuticals (June 2025), textiles (September 2025), and electronics (December 2025).

Third, the tax authority mandated digital integration of transaction data for all businesses with annual revenues above 100 million DZD ($740,000). The system, called “e-Tax,” will launch in Q4 2025. No penalties for non-compliance were announced.

For entrepreneurs, the IPO fee waiver reduces listing costs by 0.1% of capital. The CNRC’s digital reporting requirement increases administrative burdens but may improve supply chain transparency. The e-Tax system could reduce tax evasion but requires upfront IT investments.

Foreign investment and business partnerships expand

First, Algerian firms announced partnerships with Tanzanian counterparts in agribusiness and construction. The deals, signed during a trade mission, include a $45 million fertilizer plant and a $22 million cement distribution agreement. No Algerian companies were named in the announcements.

Second, Flat6Labs and the International Finance Corporation (IFC) launched StartAlgeria, a $10 million incubator program. The initiative targets 50 startups annually, with a focus on fintech and AI. Applications open in May 2025. No equity stakes or repayment terms were disclosed.

For diaspora entrepreneurs, the Tanzanian deals signal opportunities in East Africa. Algeria’s trade with sub-Saharan Africa grew 18% in 2024, reaching $2.1 billion. The StartAlgeria program offers mentorship but no direct funding. Previous Flat6Labs programs in Egypt and Tunisia saw 30% of startups secure follow-on investment within 18 months.

SMEs and digital transformation advance

First, the government approved the launch of Dzair Digital Services, a portal for government-to-business transactions. The platform will integrate 12 services, including tax filings, import licenses, and social security registrations. No launch date was announced.

Second, Algeria’s National AI Strategy entered its implementation phase. The plan allocates $120 million to AI research and training by 2027. Priority sectors include healthcare (diagnostic tools), agriculture (crop monitoring), and energy (grid optimization). No private sector funding commitments were disclosed.

Third, the social protection system reform introduced a new unemployment insurance scheme. The program covers workers in firms with 10+ employees and offers 60% of the last salary for up to 12 months. No enrollment figures were released.

For SMEs, the Dzair Digital portal could reduce bureaucratic delays. The AI strategy creates opportunities in software development and data analytics. The unemployment insurance scheme increases labor costs but may improve workforce stability.

Week’s highlights

Key takeaway for entrepreneurs