BRICS Summit in New Delhi Tests Algeria’s Dual Strategy for Financing and Trade

Algeria’s Balancing Act: Western Ties vs. BRICS Financing

Algeria’s business leaders are watching the BRICS summit in New Delhi with keen interest, but not without caution. The North African nation has long relied on European markets and Western financing, yet its entrepreneurs—especially SMEs—are eyeing BRICS as a potential lifeline for cheaper loans and new trade routes. The challenge? Avoiding a full break with traditional partners while securing benefits from the bloc’s growing financial muscle.

According to theafricareport.com, African nations at the summit are adopting a pragmatic approach: they want BRICS financing without abandoning Western alliances. For Algeria, this means navigating a delicate path. The country’s state-owned banks, like BNP Paribas Algérie and Attijariwafa Bank, have deep ties to European lenders, while private-sector entrepreneurs—particularly in tech and renewable energy—are exploring BRICS-linked opportunities.

The risk? A sudden shift could disrupt Algeria’s $15 billion annual trade with the EU, its top export market for hydrocarbons and manufactured goods. But the reward—access to BRICS’ $1 trillion-plus funding pool—could unlock projects stalled by tight Western credit conditions.

BRICS Financing: What Algeria’s SMEs Can Realistically Access

BRICS’ focus on resilience, innovation, and sustainability aligns with Algeria’s post-oil diversification push. The bloc’s New Development Bank (NDB), based in Shanghai, has already funded projects in Africa, including renewable energy and infrastructure. For Algerian entrepreneurs, this could mean lower-cost loans for solar farms or industrial zones—critical as local banks tighten lending due to high inflation.

Yet the process is far from straightforward. BRICS financing often comes with strings attached: local currency settlements (reducing dollar exposure) and partnerships with Chinese or Indian firms. Algerian tech startups, for instance, might find BRICS-backed venture funds—but only if they collaborate with Asian investors, a hurdle for many.

The Indian presidency’s avoidance of contentious issues like de-dollarisation or Ukraine could ease tensions, but Algeria’s Western-aligned banks may still face hurdles. A 2024 report by Algeria’s National Office of Statistics showed that 60% of Algerian SMEs rely on European loans. A sudden pivot to BRICS could leave them stranded without backup financing.

Diaspora Entrepreneurs: A Bridge Between Worlds?

Algerian expatriates—particularly in France, Canada, and the Gulf—are well-positioned to leverage BRICS opportunities. Many already operate in both Western and emerging markets, making them ideal connectors for trade and investment. The diaspora’s networks could help Algerian firms access BRICS financing by acting as guarantors or local partners in Africa and Asia.

For example, Algerian-French entrepreneurs in renewable energy might secure BRICS-backed loans for projects in Morocco or Egypt, then supply equipment from Algeria. The diaspora’s remittances—$3.5 billion annually—could also be redirected into BRICS-aligned ventures if incentives improve.

But timing is everything. The BRICS summit’s emphasis on “cooperation” over confrontation suggests gradual integration, not a rush. Algerian business founders should start now: building relationships with BRICS-linked institutions, exploring joint ventures, and preparing for a mixed financing model.

Sources
theafricareport.com
Algeria’s National Office of Statistics

Key takeaway for entrepreneurs
Algerian SMEs should diversify financing sources now—BRICS offers lower-cost loans but demands local partnerships. Diaspora networks can bridge gaps, but Western ties remain critical. The safest path? Start small with BRICS-aligned projects while keeping EU and Gulf markets as backup.