Algeria is quietly reshaping the African Union (AU) into an extension of its own diplomatic and economic agenda, with Vice President Selma Malika Haddadi leveraging her position to centralize control over key financial and human resources decisions. The move risks sidelining regional players, including the Algerian diaspora and local small and medium-sized enterprises (SMEs), who rely on AU platforms for trade, investment, and financing opportunities.
A Power Grab at the AU’s Heart
The latest flashpoint was the appointment of Tayeb Toufik Dahar, an Algerian, as director of human resources—a role controlling recruitment and promotions across the entire Commission. Reports from Africa Intelligence suggest Haddadi’s office operates with “highly tense” relations with Youssouf’s team, with Algerian diplomats embedded in her cabinet to push Algiers’ agenda.
For Algerian entrepreneurs and the diaspora, this consolidation matters. The AU’s financial mechanisms—such as the African Continental Free Trade Area (AfCFTA) and development funds—are critical for cross-border trade and SME access to credit. If Algiers dominates these structures, local businesses may face barriers to equal participation in AU-led projects.
Diaspora Investors Face a New Hurdle
“AU institutions should be neutral,” says a senior Algerian economist based in Paris. “If recruitment and funding decisions are driven by national agendas, diaspora investors may hesitate to engage, fearing favoritism or bureaucratic delays.”
The AU’s recent push to streamline trade under AfCFTA could be undermined if Algerian officials control key appointments. For example, the appointment of Dahar—without proper AU-wide consultation—sets a precedent where national interests override merit-based selection. This could deter foreign investors, including Algerian expatriates, from participating in AU-backed initiatives like the Africa Investment Bank or the Africa Guarantee Fund.
SMEs Left Out of the AU’s $4 Trillion Opportunity
The AFIS report highlights that African banks—though profitable—lend only 15% of deposits to private sector SMEs, compared to 50% in Europe. If the AU’s financial arm is dominated by Algerian appointees, local entrepreneurs may struggle to access AU-backed credit lines or trade facilitation programs.
“Algerian SMEs need predictable, transparent access to AU funds,” says Djamel Hadj Sadok, president of the Algerian SMEs Federation. “If political considerations override economic logic, businesses will turn to informal financing—at higher costs and risks.”
The Diaspora’s Dilemma: Trust or Exit?
“Many Algerian entrepreneurs in Europe already face visa restrictions and bureaucratic hurdles,” says a London-based Algerian business owner. “If the AU—supposedly a pan-African body—becomes another layer of Algerian state control, why invest in a system that may not serve our interests?”
The risk is not just reputational. If AU financial mechanisms are seen as politicized, diaspora capital could flow elsewhere, depriving Algeria of much-needed FDI for infrastructure and startups.
Key takeaway for entrepreneurs
Algerian SMEs and diaspora investors must monitor AU appointments closely, as political influence over financial institutions could limit access to trade and credit. Entrepreneurs should diversify funding sources beyond AU-backed programs and engage directly with regional banks or private equity funds to mitigate risks. The diaspora, in particular, should explore neutral financial hubs if AU mechanisms become less transparent.
Sources
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