Algeria’s Hirak reshapes political risk for investors

Algiers has entered a new phase of political uncertainty as the remnants of the Hirak protest movement test the limits of President Abdelmadjid Tebboune’s reform promises. The weekly demonstrations that filled central Algiers from early 2019 until the COVID-19 lockdowns suspended them may not return with the same intensity, but their legacy is now reshaping how entrepreneurs and the Algerian diaspora calculate political risk when deciding whether to invest or relocate back home.

The Hirak’s defining moment came in April 2019 when mass marches forced President Abdelaziz Bouteflika to resign after 20 years in power. Tebboune, who was prime minister under Bouteflika, won the December 2019 presidential election on a platform of gradual economic and political reform. Yet the protest movement left deep marks on Algerian politics that continue to influence business sentiment.

One key development is the fragmentation of the Hirak into smaller, localized networks. According to the Arab Reform Initiative, the movement’s informal leadership has splintered into dozens of committees across cities like Oran, Constantine and Tizi Ouzou. These groups maintain public pressure through social media campaigns and symbolic protests, but none has the national coordination that once made the Hirak a household name.

For entrepreneurs, the absence of a unified opposition front reduces the risk of sudden policy reversals driven by street pressure. “The Hirak is no longer a monolithic bloc,” says economic analyst Fatima Zohra Boukhelouf, who tracks political risk for Algerian business associations. “That means fewer surprise rallies that could disrupt traffic or shut down ports for hours.” SONATRACH, Algeria’s state-owned energy giant, has already reported fewer disruptions to its southern logistics routes since mid-2021, when the frequency of Hirak-linked protests diminished.

Yet the movement’s dispersed structure also creates new uncertainties. Localized protests can still flare up over specific grievances, such as water shortages in Béchar or unemployment in Annaba. In August 2021, demonstrations in the southern town of Djanet over government plans to auction mining licenses turned violent, leaving one police officer dead and forcing temporary halts at nearby oilfields operated by foreign contractors. Such incidents remind investors that Algeria’s political risk is now fragmented along regional lines rather than concentrated in a single national movement.

The Hirak’s impact on Algeria’s business climate is most visible in the regulatory sphere. Tebboune’s government has pursued a cautious liberalization agenda, lifting some currency restrictions and allowing greater foreign participation in sectors like pharmaceuticals and renewable energy. However, the president has also tightened control over labor unions and nongovernmental organizations that once served as conduits for protest energy.

In November 2022, the government introduced a new law regulating associations, requiring them to obtain permits from the Interior Ministry and submit annual financial reports. Human Rights Watch called the measure “a tool to silence dissent,” but business chambers see a silver lining: clearer rules on civic activity can help foreign investors assess which local partners are politically exposed.

The diaspora, meanwhile, is watching closely. According to the Algerian consulate in Marseille, visa applications from French-based Algerians spiked by 40 percent in early 2023 compared to the same period two years earlier. Many cite concerns over political instability as a reason to maintain dual residency or accelerate plans to relocate capital.

“People are hedging their bets,” says Kamel Haddad, a Paris-based financial advisor who helps Algerian clients repatriate savings. “They want to keep one foot in Algeria in case reforms take hold, but a second foot abroad in case the political climate deteriorates.” Haddad notes that remittances from the diaspora, which reached $2.3 billion in 2022 according to the central bank, remain resilient despite the uncertainty.

For Algerian startups, the Hirak’s legacy presents a paradox. On one hand, the protest movement forced the government to acknowledge youth unemployment as a priority, leading to new programs like the “Start-Up Algeria” fund, which offers grants of up to 5 million dinars ($37,000) to young entrepreneurs. On the other, the same movement’s unpredictability makes banks and venture capitalists wary of long-term commitments.

“Banks now require three years of audited accounts before approving loans to tech firms, up from two years before 2019,” says Yacine Benali, co-founder of a digital payments startup in Algiers. “They cite ‘regulatory risk’ in their internal memos.” Benali’s company, which processes payments for small retailers, has had to delay expansion plans in southern provinces due to banks’ stricter lending criteria.

Despite these challenges, some entrepreneurs see opportunity in the Hirak’s wake. The movement exposed weaknesses in Algeria’s centralized decision-making, pushing the government to decentralize some economic powers to wilayas (provinces). In 2023, the Ministry of Industry launched pilot programs in Oran and Sétif to allow local authorities to approve small industrial projects without central approval, a first since independence.

“The system is still slow, but the direction is clear,” says Leïla Hamidi, an economist advising the Oran Chamber of Commerce. “The more the government devolves authority, the less a single protest in Algiers can derail a nationwide business plan.”

For now, Algeria’s political risk profile remains a moving target. The Hirak’s transformation from mass movement to diffuse networks means the country is less likely to experience sudden, economy-wide disruptions—but more likely to face localized setbacks that can still derail specific projects. Entrepreneurs who succeed will be those who treat Algeria as a portfolio of opportunities rather than a single market, balancing investments across regions and sectors while maintaining contingency plans for regulatory or social shocks.

Key takeaway for entrepreneurs
The Hirak’s fragmentation reduces the risk of nationwide disruptions but increases the need to monitor local grievances that can still halt operations. Regulatory changes since 2021 offer clearer—but not trouble-free—paths for foreign participation in key sectors. Diaspora investors are diversifying assets across borders, signaling caution rather than retreat.