Algeria’s upcoming presidential election should represent a turning point for investment. As expected, Algeria’s President Abdelaziz Bouteflika will seek a fourth term in April. He is expected to win easily. What isn’t as certain is what this means for Algeria’s investment prospects. While foreign MNCs are attracted to the country’s high public and private spending potential, tight restrictions across sectors limits FDI opportunities.

The president will be faced with a decision between two economic paths. Bouteflika could promote a continuation of protectionist policies and watch Algeria’s economy underperform its potential in his waning years. However, FSG believes it is more likely that Bouteflika, supported by his allies, will build on recent reforms to improve the investment climate and enshrine his legacy.

Bouteflika and his allies are incentivized heavily to implement reforms in order to attract FDI in the non-oil sector and bring balance to the economy. Reforms are badly needed, particularly to ease the process for FDI, as well as reduce the risk of currency volatility. The increasing presence of foreign companies would reduce the need for imports and inject more hard currency in the economy. Both developments are essential to ease pressure on the current account in the long term.