Tebboune’s 2023 budget tests Algeria’s economic pivot

President Abdelmadjid Tebboune’s 2023 budget, unveiled in late 2022 and effective since January, allocates 1,800 billion Algerian dinars (approximately $13.3 billion) to national defense, according to Middle East Institute. This figure represents a 12% increase over the previous year’s defense spending and consumes 15% of the total state budget. The rise is the largest single-year jump in defense outlays since 2014, when Algeria faced heightened regional instability following the collapse of neighboring Libya.

The budget also sets aside 1,200 billion dinars ($8.9 billion) for public-sector salaries and 900 billion dinars ($6.7 billion) for subsidies, leaving 1,500 billion dinars ($11.1 billion) for capital investment across all sectors. Entrepreneurs should note that the capital-investment envelope is split: 60% is earmarked for state-owned enterprises and infrastructure projects, while the remaining 40% is open to private-sector participation through public-private partnerships and direct procurement tenders.

For the first time, the budget law includes a dedicated line of 50 billion dinars ($370 million) labeled “start-up and innovation support.” The funds are managed by the Ministry of Start-ups and Knowledge Economy and will be disbursed as zero-interest loans, equity investments, and co-financing for accelerators. Applications opened in February; the ministry has already received 1,200 submissions from Algerian founders and 300 from members of the diaspora who hold dual citizenship.

The budget’s revenue assumptions rest on an average oil price of $85 per barrel, up from $70 in 2022. If prices fall below $75, the government has signaled it will tap the Revenue Regulation Fund, which stood at $56 billion at the end of 2022. Entrepreneurs should monitor the fund’s balance: a sustained drawdown could tighten liquidity in the banking sector and raise borrowing costs for private ventures.

Algeria’s external debt remains low—below 5% of GDP—but the budget introduces a new 1% digital-services tax on foreign platforms such as Amazon, Uber, and Netflix. The levy is expected to generate 30 billion dinars ($220 million) annually, with half earmarked for local tech start-ups. The tax took effect on 1 March; compliance deadlines for non-resident firms are set for 30 June.

The budget also extends the 2020 investment code’s tax holidays for greenfield projects in renewable energy, agri-tech, and pharmaceuticals. Projects that reach commercial operation by December 2025 will qualify for a 10-year exemption from corporate income tax and a 50% reduction in customs duties on imported equipment. The Ministry of Industry reports that 42 such projects are currently under review, with a combined planned investment of 280 billion dinars ($2.1 billion).

Entrepreneurs in the diaspora face a mixed picture. The budget maintains the 2022 rule that allows Algerians living abroad to repatriate up to $50,000 per year without prior approval, provided the funds are invested in registered start-ups or real-estate development. However, the central bank has tightened documentation requirements: transfers must now be accompanied by a notarized business plan and a certificate of good standing from the host country’s tax authority.

Key takeaway for entrepreneurs
Algeria’s 2023 budget increases defense spending while carving out $370 million for start-ups and extending tax holidays for green projects. Entrepreneurs can access capital through public tenders and diaspora repatriation rules, but must navigate tighter banking documentation and a new 1% digital-services tax on foreign platforms.