A diplomatic crisis between Algeria and France has spilled over into trade and investment, as relations continue to wane. Bilateral economic agreements have been non-existent, and French businesses in Algeria have significantly scaled back their presence in North Africa over the past three years. For its part, Algeria has strengthened its ties with the likes of the United States, China, Türkiye, Qatar, Italy, Saudi Arabia, and Germany.
Figures published by the Algerian Press Service in a report titled Algeria-France: What Development Assistance Are We Talking About? indicate that French investments in Algeria are far below the desired level. Analysts complain that French investments in Algeria have been largely unproductive, failing to generate wealth, meet labour market demands, or facilitate technology transfer.
Bilateral trade
“French exports to Algeria amounted to $3.2bn in 2023, concentrated mostly in the financial and banking sectors, as well as in certain industrial branches such as the production of construction materials and pharmaceuticals,” the report states. There is also some bilateral engagement on hydrocarbons (exploration and production) “within the framework of partnerships with the (Algerian state) oil company Sonatrach”.
In 2023, bilateral trade reached $11.8bn, and Algerian President Abdelmadjid Tebboune told French newspaper L’Opinion that although trade relations continued despite the “toxic climate” between the two nations, this figure was highly likely to decline, not least because of Algeria’s exclusion of French wheat from its tender offers.
Benoît Piétrement of the Grains Council at FranceAgriMer said French grain exports—particularly wheat—suffered a major blow after Algeria closed its market to French exports. Algeria’s wheat imports from France plunged from $874mn in 2022 to just $174mn in 2023, a fall of around 80%.
Conversely, Algerian hydrocarbon exports to France actually rose by 15.3% to $6.3bn, after the European Union decided to reduce its reliance on Russian gas after the invasion of Ukraine in February 2022 and states sought alternative suppliers. Around 13% of Algeria's oil and gas exports now go to France.
Yet in Algeria today, France is seen as a secondary force to countries such as Italy, Germany, Türkiye, Russia, and Qatar, which have all shown a strong interest in strengthening economic cooperation, particularly in trade and investment. Most significantly, China has replaced France as Algeria's leading supplier.
Firms take flight
Paris-based companies operating in Algeria have lost market share, including RATP Group, a French firm specialising in rail and metro transport that managed and maintained Algiers' metro system since 2011. It left Algeria in October 2020 after authorities decided not to renew its contract.
French water management company Suez SA, which managed water and sanitation services in Algiers, had a similar issue. After three contract renewals from 2006-21, its operations were ultimately terminated. Likewise, Renault's car manufacturing plant in Algeria ceased production in 2020.
One of the most striking examples of France's declining presence in Algeria is the departure of Crédit Agricole, one of the largest French banks operating in Algeria. It withdrew after the Algerian central bank revoked its operating licence, despite it having operated in Algeria since 2007.
