Algeria’s farming sector has billions of dinars in government and private funds waiting to be deployed, yet many entrepreneurs say they still cannot access capital to modernise orchards and greenhouses because lenders want guarantees no start-up can give, according to السفير العربي.
The mismatch was described in a recent policy review published by the Ministry of Agriculture and Rural Development. The review shows that the National Agricultural and Rural Development Fund (FNAR) had 300 billion dinars on its balance sheet at the end of last month, while a parallel public-private vehicle, the Agricultural Investment Support Fund (FAI), reports uncommitted capital of 110 billion dinars. Despite these liquidity pools, the same report notes that only 38 % of the planned 200 000 hectares of new irrigated cropland was actually planted last season, underscoring the gap between money and execution.
Fruit and vegetable exporters in the wilayas of Tlemcen and Béjaïa told السفير العربي they have repeatedly approached FNAR and FAI only to be asked for fixed-asset collateral equal to 150 % of the loan value. Younger growers who lease land cannot meet this requirement because leases are not accepted as collateral under current banking rules. One exporter in Tlemcen, Kamel Touati, said he secured a 75 million dinar contract to supply cherry tomatoes to the European Union, but lost the order after a Moroccan competitor signed a deal by offering the same produce at a lower price. “We could have doubled our greenhouse capacity in six months,” Touati said, “but the bank refused to lend without a land title we do not have.”
The sector’s biggest development zone, the 10 000-hectare Sidi Fredj Agropole near Oran, illustrates how public money can work when project design is strong. Sidi Fredj received 19 billion dinars from the state in 2020 and 2021 to build packing houses, cold stores and a 3 MW solar-powered irrigation network. The zone now exports 18 000 tonnes of citrus and early vegetables annually, up from zero before the investment. Yet officials at the Agropole’s management company, Agropole d’Oran SPA, say only 65 % of the plots are currently operational because the remaining investors struggle to secure working capital for fertilisers and fuel.
Algeria’s banking law technically allows leases to be pledged as collateral, but local bankers say the Central Bank’s prudential circulars still treat them as off-balance-sheet items, making lenders reluctant to accept them. In May, the Ministry of Agriculture asked the Central Bank to draft a new circular that would recognise lease contracts as acceptable security. A draft is now circulating for public comment, but no implementation date has been set.
Meanwhile, the diaspora is returning with ideas but few resources. Rachid Lounis, who worked for a decade in French agribusiness, opened a 5-hectare date-packing unit in Adrar in 2021. He financed the project with his savings and a 15 million dinar personal loan from a private bank because public funds were unavailable. Lounis now employs 22 local workers and sells 40 tonnes of pitted dates monthly to Germany. “I used my foreign savings because Algerian lenders see only bricks, not plants,” he said.
The Ministry’s latest figures show that 27 % of agricultural graduates under 35 are unemployed, even though food imports cost Algeria 11.2 billion dollars in 2021. Experts say a skills upgrade could unlock the idle capital. The National Institute of Agricultural Sciences (INSAA) in Algiers runs a six-month accelerator called “AgriTech Start” whose graduates have raised 320 million dinars in combined private and public funding. One cohort company, HydroDrip, uses drip-irrigation kits and blockchain traceability to supply French supermarkets with 300 tonnes of tomatoes a month. HydroDrip’s co-founder, Yacine Benabdelkader, says the programme’s main benefit was teaching founders how to package a business plan that banks can understand.
As authorities weigh a new circular on lease collateral, entrepreneurs like Touati and Lounis argue that speed matters more than perfect guarantees. “Banks will always want a risk-free loan,” Touati said. “We must show them how to take calculated risks.”
Key takeaway for entrepreneurs
– Public funds of 410 billion dinars sit idle because lenders require land titles or 150 % collateral, closing doors to leaseholders.
– Agro-industrial zones such as Sidi Fredj prove that targeted infrastructure investment can unlock export capacity within two years.
– Returning diaspora entrepreneurs with foreign savings and foreign market contacts can bypass local collateral rules but still face working-capital gaps.
💡 Starting a business in Algeria? GlobalStart guides you step by step: procedures, real costs, company forms (SARL, EURL, SPA) and CNRC registration.