Algeria’s Sahel return reshapes regional business

Algeria’s recent re-engagement with the Sahel is more than a diplomatic shift—it is a commercial opening for entrepreneurs and investors. In March 2026, President Abdelmadjid Tebboune signaled Algiers’ return to the region by hosting leaders from the Alliance of Sahel States (AES), a bloc formed by Mali, Burkina Faso, and Niger after their withdrawal from the Economic Community of West African States (ECOWAS). The move follows years of strained relations, particularly after the 2023 coups in these countries, which Algeria initially condemned. Now, Algiers is positioning itself as a mediator and economic partner, offering an alternative to Western and ECOWAS-led initiatives.

The timing aligns with Algeria’s broader strategy to diversify trade beyond Europe and strengthen ties with African markets. According to Algeria’s Ministry of Commerce, trade with the Sahel has historically been minimal—less than 2% of Algeria’s total exports—despite shared borders and cultural links. However, recent meetings in Algiers and Niamey have focused on reviving cross-border trade, particularly in energy, agriculture, and pharmaceuticals. Algeria’s state-owned pharmaceutical company Saidal, for example, has already signed agreements to supply generic medicines to Mali and Niger, filling gaps left by the departure of French and Indian suppliers.

For entrepreneurs, the Sahel presents untapped opportunities. Algeria’s private sector, long constrained by bureaucracy and dependence on hydrocarbons, is now encouraged to explore new markets. The government has introduced tax incentives for companies exporting to AES countries, including reduced customs duties and simplified export procedures. In 2025, Algeria’s exports to Mali alone grew by 18%, driven by cement, construction materials, and food products, according to data from the Algerian Customs Authority. The Sahel’s demand for affordable housing and infrastructure—estimated at $12 billion annually—could benefit Algerian firms already active in public works, such as Cosider and Sonelgaz.

Energy remains the most promising sector. Algeria, Africa’s largest natural gas exporter, is leveraging its resources to position itself as a key supplier to the Sahel, where energy deficits hinder economic growth. Sonatrach, Algeria’s state energy giant, has proposed extending its gas pipeline network to Niger and Mali, offering cheaper and more reliable supplies than those from Nigeria or Europe. This aligns with the AES’s push for energy sovereignty, particularly after Niger’s decision to cancel its oil export deal with China’s PetroChina in 2024. For Algerian entrepreneurs, this could mean opportunities in downstream sectors like gas distribution, renewable energy, and petrochemicals.

Security concerns, however, remain a hurdle. The Sahel’s instability—marked by jihadist insurgencies and military rule—has deterred foreign investment. Algeria’s approach combines economic engagement with security cooperation, including joint military exercises and intelligence-sharing with AES members. This dual strategy aims to stabilize the region while creating a safer environment for business. For Algerian startups and SMEs, this could mean access to a market of over 70 million people, many of whom lack basic goods and services.

The rivalry with Morocco adds another layer of complexity. While Algeria pushes for deeper ties with the Sahel, Morocco has advanced its own economic agenda, particularly through the $26 billion Nigeria-Morocco gas pipeline project, approved by ECOWAS in July 2026. This pipeline, which bypasses Algeria, threatens to divert European and African gas markets away from Algiers. In response, Algeria is accelerating its own energy projects, including the Trans-Saharan Gas Pipeline (TSGP), which would connect Nigeria to Europe via Algeria. For entrepreneurs, this competition could drive innovation in energy logistics, storage, and alternative fuels.

Algeria’s re-engagement also reflects a broader shift in African trade dynamics. The collapse of the Arab Maghreb Union (AMU) in 2026—due to persistent tensions between Algeria and Morocco—has forced Algiers to seek new alliances. The Sahel, with its young population and growing consumer base, offers a strategic alternative. Algeria’s private sector, particularly in agribusiness and manufacturing, stands to benefit from this realignment. For example, Algeria’s Cevital Group, one of Africa’s largest food producers, is exploring partnerships to supply processed foods to Niger and Burkina Faso, where food insecurity remains high.

For the Algerian diaspora, this shift presents an opportunity to invest in cross-border ventures. The government has introduced measures to facilitate remittances and encourage diaspora-led businesses in the Sahel. In 2025, remittances from Algerians abroad reached $2.1 billion, with a growing share directed toward African markets. The diaspora’s cultural and linguistic ties to the Sahel could help bridge gaps in trade and investment, particularly in sectors like education, healthcare, and digital services.

Key takeaway for entrepreneurs
Algeria’s Sahel pivot opens new markets for exporters, particularly in energy, pharmaceuticals, and agribusiness. The government’s tax incentives and simplified trade procedures reduce barriers, while the region’s demand for affordable goods creates immediate opportunities. However, security risks and competition from Morocco require careful risk assessment and local partnerships. For the diaspora, this is a chance to leverage cultural ties and invest in high-growth sectors.