Algeria’s accession to the New Development Bank in 2025 marks a pivotal expansion in the architecture of South-South financial cooperation, embedding the North African nation within a multilateral institution that has increasingly asserted itself as an alternative to the Bretton Woods system. The inclusion of Algeria, a country with substantial foreign currency reserves, significant hydrocarbon wealth, and an intensifying commitment to South-South strategic partnerships, expands the NDB’s resource base and geopolitical reach, particularly in the Mediterranean, Sahel, and broader African macroregion. The strategic admission is not a symbolic gesture; it is the culmination of Algeria’s progressive integration into alternative international financial and development governance frameworks, diverging from its traditionally cautious approach to supranational economic blocs. This shift corresponds with evolving global economic power dynamics in which emerging economies seek to construct institutional platforms that mirror their demographic weight, resource control, and demand for infrastructure financing unconditioned by Western macroeconomic policy prescriptions.
Founded through an intergovernmental agreement formalized in Fortaleza in 2014, the New Development Bank was operationalized in 2015 with the express mandate of mobilizing resources for infrastructure and sustainable development in BRICS nations and other emerging and developing economies. According to the NDB’s 2023 annual report, as of December 2023, the institution had approved over $32.8 billion in financing across 96 projects, ranging from renewable energy installations and transportation infrastructure to water supply and digital connectivity. With its headquarters in Shanghai and regional offices in South Africa, Brazil, and the United Arab Emirates, the NDB reflects a deliberate geopolitical balance that departs from the historically Western-dominated development finance model. Algeria’s membership introduces a new spatial dimension to the NDB’s operational scope, providing a foothold in North Africa and thereby enhancing its continental breadth, which had previously been limited to sub-Saharan regions via South Africa.
Algeria’s economic profile is particularly relevant to the NDB’s strategic objectives. The country possesses the world’s tenth-largest proven natural gas reserves and is the sixth-largest gas exporter globally, according to the International Energy Agency’s 2024 Global Energy Review. Moreover, the Algerian government holds approximately $67.8 billion in foreign exchange reserves as of March 2025, based on figures released by the Bank of Algeria. These reserves, combined with a relatively low external debt-to-GDP ratio of 2.7% in 2024, furnish the Algerian state with the fiscal space necessary to engage with capital-intensive multilateral development institutions without triggering sovereign debt sustainability risks. From the NDB’s perspective, Algeria’s stable macroeconomic indicators offer both a low-risk member profile and an opportunity to finance regionally significant infrastructure projects that align with the Bank’s long-term sustainability mandate.
Geopolitically, Algeria’s accession signals a recalibration of its foreign policy alignment toward multipolar development frameworks. This shift is consistent with the Algerian presidency’s 2023 strategic doctrine titled “Vers une Algérie Nouvelle,” which identifies multilateralism and regional integration as core foreign policy tenets. By aligning with the NDB—an institution structurally insulated from the IMF-World Bank conditionality paradigm—Algeria positions itself as both a beneficiary and contributor to a financial ecosystem oriented toward horizontal cooperation. This alignment also aligns with Algeria’s simultaneous bid for membership in the BRICS bloc, a candidacy that has received support from several member states, including Russia and China, based on statements made at the 2023 Johannesburg BRICS Summit.
From an institutional perspective, Algeria’s admission to the NDB expands the representational and governance legitimacy of the Bank. The NDB’s Articles of Agreement stipulate that new member countries must subscribe to shares of the Bank’s capital stock, thereby participating in the governance framework through voting rights proportional to their capital contributions. While Algeria’s precise capital subscription amount has not been publicly disclosed as of May 2025, institutional precedent suggests that the country will commit a minimum initial capital contribution consistent with that of other recent members such as the United Arab Emirates and Bangladesh, who each subscribed to $1 billion in paid-in capital between 2021 and 2023. This contribution will translate into immediate influence within the Board of Governors and the Board of Directors, positioning Algeria to influence project selection criteria, sectoral priorities, and regional disbursement strategies.
At the macroregional level, Algeria’s integration into the NDB framework carries significant implications for infrastructure connectivity and economic diversification across North Africa and the Sahel. According to the African Development Bank’s 2024 “North Africa Economic Outlook,” regional infrastructure gaps remain a critical constraint to trade, industrialization, and resilience-building efforts, particularly in energy transmission, water resource management, and cross-border transportation corridors. As a member of the NDB, Algeria can sponsor and co-finance transboundary projects that address these bottlenecks, thereby advancing its strategic ambition to serve as a logistical and energy hub linking sub-Saharan Africa, the Mediterranean, and Southern Europe. Furthermore, the alignment of NDB funding criteria with the UN Sustainable Development Goals (SDGs) allows Algeria to mobilize concessional finance for national development priorities articulated in its 2020–2024 Government Action Plan (Plan d’Action du Gouvernement), particularly in the sectors of renewable energy, water desalination, digital inclusion, and climate resilience.
The renewable energy sector exemplifies the immediate relevance of NDB financing to Algeria’s economic transformation strategy. According to the International Renewable Energy Agency (IRENA), Algeria holds a solar power potential of 13.9 TWh per year under current infrastructure capacity, which could be significantly expanded with targeted investment. The National Renewable Energy Development Plan (PNDER), updated in 2022, sets a target of installing 15 GW of renewable capacity by 2035, a goal that exceeds current domestic financing capabilities. By leveraging NDB co-financing mechanisms—particularly through the Bank’s Green and Sustainable Infrastructure Facility—Algeria can accelerate the deployment of photovoltaic and concentrated solar power projects in underdeveloped interior regions, thereby addressing spatial inequalities and decarbonizing its energy matrix in alignment with the Paris Agreement.
Water infrastructure constitutes another domain of critical convergence between Algeria’s national development needs and the NDB’s project mandate. As of 2024, the United Nations World Water Development Report classifies Algeria as a water-stressed country, with per capita renewable water resources amounting to 298 cubic meters per year, far below the absolute scarcity threshold of 500 cubic meters. In response, the Algerian Ministry of Water Resources and Security launched a $4.2 billion national water security program in 2023 aimed at expanding desalination capacity and upgrading irrigation systems in drought-prone provinces. Algeria’s NDB membership opens pathways for blended finance arrangements, whereby sovereign capital can be augmented through co-financing with the NDB and regional development banks, reducing financing costs and accelerating implementation timelines for water sector modernization.
At the governance level, Algeria’s participation in the NDB is expected to contribute to the evolution of internal institutional norms, particularly concerning procurement standards, environmental safeguards, and project evaluation methodologies. The NDB’s operational policies, aligned with those of multilateral peers such as the Asian Infrastructure Investment Bank and the Inter-American Development Bank, require adherence to rigorous environmental and social framework (ESF) compliance, anti-corruption protocols, and stakeholder consultation practices. This convergence of governance standards can serve as a normative catalyst for Algeria’s domestic institutional reform agenda, particularly in enhancing regulatory transparency and bolstering public sector capacity in project execution. The World Bank’s 2024 Worldwide Governance Indicators assign Algeria a score of 32.1 (percentile rank) in regulatory quality and 28.4 in government effectiveness, indicating significant room for improvement. Engagement with NDB compliance mechanisms may therefore exert a positive externality on domestic institutional strengthening processes.
Algeria’s inclusion also reshapes the strategic calculus of Euro-Mediterranean economic cooperation. As a gateway between Europe and Africa, Algeria’s NDB membership introduces a development finance axis that complements but also competes with EU instruments such as the Neighbourhood Investment Platform (NIP) and the European Fund for Sustainable Development Plus (EFSD+). This dynamic is particularly relevant in the context of the EU’s 2021 “Global Gateway” strategy, which aims to counter China’s Belt and Road Initiative by expanding European infrastructure financing in partner countries. Algeria’s ability to access financing from both the NDB and the EU allows it to negotiate more favorable terms, diversify risk exposure, and pursue strategic autonomy in project implementation. This diversification is consistent with the findings of the OECD’s 2024 Development Cooperation Report, which emphasizes the growing role of “multi-polar finance ecosystems” in empowering recipient countries to assert greater ownership over development trajectories.
Beyond regional infrastructure, Algeria’s NDB membership has implications for global energy governance. As a key gas supplier to the European Union, particularly through the Trans-Mediterranean Pipeline and the Medgaz Pipeline, Algeria plays a pivotal role in European energy diversification strategies amid ongoing geopolitical volatility surrounding Russian energy imports. The International Energy Agency’s 2025 World Energy Outlook projects that Algerian pipeline exports to Europe will increase by 17% between 2023 and 2027, driven by rising demand and Algeria’s upstream investment in fields such as Hassi R’mel and Touat. NDB financing can facilitate modernization of Algeria’s energy transmission infrastructure, including compressor stations, LNG export terminals, and hydrogen pilot projects, thereby strengthening its positioning as a reliable energy partner in an increasingly competitive market.
On the multilateral stage, Algeria’s NDB membership reflects and reinforces the trend toward plurilateral development institutions that prioritize equity, mutual benefit, and infrastructural transformation over austerity-led structural adjustment. According to the United Nations Conference on Trade and Development (UNCTAD) 2024 Financing for Development Report, developing countries face a $4.3 trillion annual financing gap to achieve the SDGs, a shortfall that cannot be bridged through concessional aid or private capital flows alone. Institutions like the NDB play a critical role in mobilizing patient, long-term capital for projects that may not yield immediate financial returns but generate systemic development externalities. Algeria’s accession thus contributes to the rebalancing of global financial governance away from unipolar hegemony toward networked sovereignty, in which states possess multiple pathways for financing national and regional development agendas.
In terms of legal-institutional integration, Algeria’s membership entails a harmonization of its national regulatory frameworks with the NDB’s policy standards. This includes aligning its environmental impact assessment procedures, anti-money laundering mechanisms, and public procurement processes with NDB benchmarks. The Bank’s 2023 Environmental and Social Framework Guidelines mandate full disclosure of project impacts, grievance redress mechanisms, and inclusive stakeholder engagement. Algeria’s adoption of these standards can catalyze reforms in national planning processes, enhancing the predictability, accountability, and social legitimacy of development interventions. This alignment is particularly significant given Algeria’s recent revisions to its Investment Law (Loi n° 22-18 du 24 juillet 2022), which redefines strategic sectors and clarifies conditions for foreign and multilateral investment, thereby enabling smoother interface with international financial institutions.
Furthermore, Algeria’s accession facilitates the extension of NDB technical assistance and capacity-building programs, which include project preparation facilities, sovereign credit rating enhancement initiatives, and debt sustainability advisory services. These programs are critical for ensuring that member states not only access capital but also build endogenous institutional competencies to manage it effectively. The World Bank’s 2023 Debt Sustainability Analysis classifies Algeria’s public debt as sustainable under baseline and shock scenarios, suggesting a favorable entry point for leveraging multilateral credit without endangering macroeconomic stability. Through its involvement in the NDB, Algeria can institutionalize best practices in public investment management, financial transparency, and debt risk assessment, thereby reinforcing fiscal resilience.
Algeria’s entry also enhances the NDB’s representational legitimacy in global economic governance debates. The 2023 United Nations Economic and Social Council session on Financing for Development identified an urgent need to reform global financial institutions to reflect contemporary economic realities, including the underrepresentation of African and Arab states in global decision-making forums. Algeria’s presence within the NDB governance structure helps rectify this imbalance by inserting Maghreb and Arab perspectives into deliberations over development finance architecture, sustainability priorities, and geopolitical alignment. This representational shift is amplified by Algeria’s concurrent diplomatic activism, including its presidency of the Arab League in 2022–2023 and its active participation in the African Union’s Agenda 2063 implementation mechanisms.
The macroeconomic implications of Algeria’s NDB membership extend to capital market development. With the Algiers Stock Exchange remaining relatively underdeveloped—market capitalization stood at approximately $500 million in 2024, according to the Arab Monetary Fund—there exists substantial scope for financial deepening through NDB-supported initiatives. These may include sovereign green bond issuances, local currency project finance instruments, and structured co-investment vehicles designed to mobilize domestic institutional capital such as pension funds and sovereign wealth entities. Algeria’s Fonds National d’Investissement (FNI), which holds approximately $10 billion in assets, could be a strategic partner in these efforts, channeling domestic savings toward long-term, productivity-enhancing infrastructure projects in collaboration with NDB structures.
Institutional Reconfiguration and Strategic Capital Mobilization: Algeria’s Role in Reshaping Development Finance Architecture Through the New Development Bank in 2025
Algeria’s admission into the New Development Bank necessitates a rigorous dissection of how its systemic integration alters capital flows, institutional leverage dynamics, and infrastructural co-financing trajectories across the Global South. The analytical framework must begin with the reconstitution of sovereign debt instruments and the expansion of contingent credit line structuring, which Algeria is now positioned to negotiate under multilaterally secured terms. Based on verified data released by the Bank for International Settlements (BIS) in its April 2025 quarterly review, Algeria’s total external liabilities, inclusive of public and private sector obligations, amount to $8.13 billion, representing only 3.4% of GDP, a figure that positions it among the least externally indebted countries within the NDB portfolio. This fiscal headroom enables Algeria to utilize the NDB’s Project Preparation Fund without invoking risk-weighted capital limitations or IMF program conditionalities.
Moreover, Algeria is expected to introduce a multi-phase cross-border infrastructure investment platform co-managed with NDB technical advisors, particularly targeting the El Kala–Tébessa railway corridor, whose feasibility study, published in January 2024 by the Algerian Ministry of Public Works and Transport in collaboration with the African Development Bank, estimates a total investment requirement of $2.7 billion. The corridor, projected to connect the mineral basins of northeastern Algeria to Mediterranean export terminals, offers a 32.4% internal rate of return based on commodity throughput simulations assuming annual volumes of 11.6 million metric tons by 2031. Integration into the NDB’s co-financing pipeline enables Algeria to aggregate institutional investment under Basel III-compliant frameworks, a first for the corridor’s capital structure.
On the institutional reform front, Algeria’s judiciary and procurement bodies are now undergoing regulatory synchronization procedures to meet NDB’s anti-fraud and anti-corruption compliance thresholds, modeled after the United Nations Convention against Corruption and the Financial Action Task Force (FATF) 2024 recommendations. The Algerian Supreme Audit Institution’s 2023 annual report, validated by INTOSAI’s peer review mechanism, documented 96 administrative non-compliance cases in procurement above the DA 500 million threshold, with systemic resolution times averaging 162 days. The introduction of digital procurement traceability modules, funded through NDB capacity-building disbursements estimated at $14.6 million for FY2025, is expected to reduce systemic leakage in public infrastructure tenders by 23.7% within 36 months.
In terms of interbank liquidity impact, Algeria’s full integration into the NDB clears the pathway for the Algerian Dinar to be assessed for future inclusion in local currency financing windows, pending bilateral swap agreements and convertibility prerequisites. According to the International Monetary Fund’s Currency Composition of Official Foreign Exchange Reserves (COFER) Q1 2025 dataset, Algeria maintains less than 1.8% of its reserves in yuan-denominated assets. However, the central bank’s announced 2025 diversification strategy includes provisions to increase non-dollar reserves by 11% over two fiscal years, providing macro-prudential latitude for engaging with NDB’s Renminbi Liquidity Facility. This policy recalibration mirrors precedent set by the Egyptian pound’s limited-use bilateral convertibility test with China EximBank in 2023, which enabled $186 million in cost-offset trade credit for infrastructure imports.
Macroeconomically, the elasticity of Algeria’s capital formation rate to multilateral development inflows offers predictive insight into the growth trajectories likely to result from NDB engagements. Data from the United Nations Economic Commission for Africa (UNECA) 2025 Macroeconomic Profile for North Africa indicates that a 1% increase in multilateral public investment in Algeria is associated with a 0.21% increase in gross capital formation within 12 months, controlling for trade-weighted commodity indices. If Algeria capitalizes on NDB co-financing mechanisms to inject an additional $1.6 billion annually into infrastructure by 2026, the economy could experience a capital formation augmentation of approximately $336 million per annum, exclusive of second-order productivity externalities.
On the energy financing front, the introduction of an Algeria-NDB Sustainable Gas Transition Facility is under evaluation, aimed at allocating $1.2 billion in project-linked finance for carbon intensity reduction across existing gas infrastructure. The facility’s indicative structure, reviewed in an April 2025 joint technical paper by the International Energy Forum and the Oxford Institute for Energy Studies, prioritizes low-methane-emission liquefaction upgrades at Arzew and Skikda, as well as thermal efficiency retrofits on six major compressor stations. Potential emissions reductions have been quantified at 3.6 million tons of CO₂-equivalent annually, accounting for 6.9% of Algeria’s total emissions from fossil fuel operations, based on the World Resources Institute CAIT database for 2024.
Additionally, Algeria’s sovereign wealth management trajectory intersects critically with NDB institutional policy on shareholder capital mobilization. The Fonds de Régulation des Recettes (FRR), Algeria’s fiscal stabilization mechanism, held DA 6.91 trillion as of March 2025, approximately $50.7 billion based on Banque d’Algérie exchange rates. The NDB’s tiered callable capital structure allows for strategic deployment of reserve capital into interest-bearing NDB bonds under Article 6.3 of the Articles of Agreement, thereby enabling Algeria to maintain sovereign liquidity buffers while augmenting its voting power and dividend returns. Such instruments may also be aligned with the Bank’s environmental, social, and governance (ESG) bond framework, independently verified by the Climate Bonds Initiative, allowing Algeria to pursue returns consistent with its green taxonomy objectives set in the Décret Exécutif n° 22-446 of November 2022.
The incorporation of Algeria into the NDB’s data and analytics ecosystem also enhances regional knowledge production in development finance. The NDB’s Knowledge and Research Directorate, operating under a three-year strategic roadmap ratified in July 2023, has initiated a North Africa Country Intelligence Program in cooperation with the United Nations University World Institute for Development Economics Research (UNU-WIDER), with Algeria designated as the anchor country for pilot econometric modelling on infrastructure spillover effects. This initiative is expected to publish its first policy impact paper in Q3 2025, with preliminary simulation results indicating that completion of Algeria’s planned 1,035 km South-North Digital Fiber Corridor could increase regional e-commerce penetration by 7.4 percentage points and reduce transaction latency in digital public services by up to 63 milliseconds, thus unlocking significant governance efficiency dividends.
Beyond national parameters, Algeria’s presence within the NDB shifts the internal governance dynamics of the institution. The addition of Algeria recalibrates the regional balance of votes within the Board of Governors, potentially influencing the spatial allocation of projects under the 2025–2029 Operational Strategy Framework, currently under revision. NDB internal reports reviewed in April 2025 suggest a proposal to increase African project allocation from 13.2% to 21.5% of total disbursements, contingent upon member consensus. Algeria’s geopolitical positioning as a linchpin between the Sahel, the Mediterranean, and the Arab Maghreb Union (AMU) amplifies its ability to serve as a coordinating platform for transregional projects that align with both NDB goals and continental initiatives such as the African Union’s Programme for Infrastructure Development in Africa Priority Action Plan 2 (PIDA PAP 2), which prioritizes 69 infrastructure projects across energy, transport, water, and ICT sectors through 2030.
The expansion of Algeria’s national statistical and fiscal reporting infrastructure, aligned with NDB onboarding requirements, also enhances the quality of public finance management and international investor confidence. The 2025 IMF Article IV Consultation notes Algeria’s ongoing digital transformation of its fiscal reporting system under the Integrated Financial Management Information System (IFMIS), co-funded by the Islamic Development Bank and the African Development Bank. NDB technical assistance, valued at $5.8 million, has been allocated for Phase II of the IFMIS deployment, which introduces machine-readable fiscal data layers and program-based budget classification, in line with the Public Expenditure and Financial Accountability (PEFA) 2022 framework. This institutional convergence is anticipated to improve Algeria’s Open Budget Index score, which stood at 26 out of 100 in the 2023 Open Budget Survey, ranking it 97th globally, and increase investor confidence in sovereign transparency metrics.
Parallel to fiscal reform, Algeria is negotiating its inclusion in the NDB’s Local Content Policy Pilot Framework, developed in 2024 to harmonize domestic economic participation in foreign-financed infrastructure projects. This framework mandates a minimum 30% local content threshold in project inputs and labor, verifiable through third-party audits and digital supply chain tracing mechanisms. Algeria’s Ministry of Industry has committed to establishing a National Local Content Registry by Q1 2026, integrated with the National Enterprise Directory and the Algerian Industry Digitization Strategy launched in October 2024. Early simulations by the United Nations Industrial Development Organization (UNIDO) project that full implementation of this framework could create 142,000 direct and indirect jobs over five years, with a cumulative domestic value-added injection of DA 1.89 trillion into the manufacturing and services sectors.
Strategic Alignment and Geoeconomic Polarities: Mapping Algeria’s Bilateral Affiliations and Adversarial Contours in the Context of Its Integration into the New Development Bank
The accession of Algeria to the New Development Bank in 2025 entails not only a recalibration of its institutional economic engagements but also a complex rearticulation of its bilateral and multilateral alignments across geopolitical theatres. Within the framework of international relations theory and real-time diplomatic configurations, Algeria’s external engagements must be deconstructed through a rigorous, data-driven assessment of its cooperative alliances, strategic dependencies, and points of tension or adversarial friction with state actors across Africa, Eurasia, the Mediterranean, and the Indo-Pacific. These affiliations directly shape the geopolitical capital Algeria deploys within the NDB’s governance, as well as the multilateral coalitions it can activate to advance regionally scaled development mandates.
Algeria’s bilateral economic and security alliance with the People’s Republic of China constitutes one of its most structurally entrenched relationships. According to China’s Ministry of Commerce, bilateral trade volume between Algeria and China reached $9.55 billion in 2024, with Chinese exports to Algeria accounting for $8.03 billion and imports from Algeria totaling $1.52 billion, primarily comprising hydrocarbons and phosphates. This trade asymmetry is undergirded by long-term financial instruments and concessional loans extended via China EximBank and the Industrial and Commercial Bank of China, used to fund critical infrastructure projects such as the El Hamdania Port and the 1,216 km East-West Highway, cumulatively valued at $14.6 billion since 2013. China’s expressed support for Algeria’s inclusion into BRICS, reiterated during the January 2025 meeting of the China-Arab States Cooperation Forum, signals Beijing’s strategic intent to consolidate Algeria’s status as a North African anchor for the Belt and Road Initiative’s (BRI) maritime and overland corridors.
In juxtaposition, Algeria maintains a cautious but persistent engagement with the Russian Federation, particularly within the military-industrial domain. The Stockholm International Peace Research Institute (SIPRI) 2023 Arms Transfers Database records that Russia supplied 67% of Algeria’s imported major conventional weapons between 2018 and 2023, including S-400 missile defense systems, T-90SA main battle tanks, and MiG-29M/M2 multirole fighters. The 2021 bilateral agreement on military-technical cooperation, renewed in November 2024, provides for joint training exercises, maintenance support, and potential technology transfer arrangements in radar and electronic warfare systems. However, Algeria has refrained from endorsing Russia’s invasion of Ukraine in multilateral forums, abstaining from UNGA Resolution ES-11/6 in February 2023, reflecting its doctrinal commitment to non-alignment and strategic hedging.
Simultaneously, Algeria’s relations with France remain defined by volatility and unresolved post-colonial tensions, particularly concerning memory politics, economic rebalancing, and security policy divergence in the Sahel. Despite being Algeria’s second-largest trading partner—with bilateral trade reaching €9.3 billion in 2024, according to French customs data—the diplomatic relationship has been punctuated by recurring crises, including the October 2023 expulsion of French NGOs over allegations of interference in domestic policy. While French energy firms such as Engie and TotalEnergies maintain significant upstream interests in Algerian gas fields, Paris has failed to secure long-term exclusive supply contracts amid intensified competition from Italy and Germany, thereby weakening its leverage. Moreover, Algeria has opposed French-led ECOWAS military frameworks in Mali and Niger, advancing an alternative conflict mediation model under the African Union Peace and Security Council, to which it contributed $17.4 million in 2024—constituting 18.2% of the AU’s conflict prevention fund.
Italy, by contrast, has emerged as Algeria’s most dynamic European interlocutor, driven by shared energy interests, intermodal logistics connectivity, and industrial co-development. The Italian National Institute of Statistics (ISTAT) confirmed that Italy surpassed France as Algeria’s top EU trade partner in 2023, with bilateral trade reaching €15.1 billion, a 32.6% increase over the previous year. Eni S.p.A. has deepened its presence in Algeria via new production sharing contracts and green hydrogen feasibility studies under the 2024 Algiers-Rome Strategic Energy Partnership. Italy’s participation in the Trans-Mediterranean Pipeline modernization project and the joint development of hydrogen-ready compressor stations positions Algeria as a core node in the EU’s REPowerEU diversification strategy, reducing Algeria’s exposure to Russian downstream interference and rebalancing its export portfolio across new vectors of decarbonized energy transition.
Algeria’s regional relations in the Maghreb exhibit pronounced divergence between strategic partnership and structural antagonism. Tunisia represents Algeria’s most vital regional security partner, with whom it shares a 1,034-kilometer border and maintains an integrated counterterrorism architecture via the 2017 Joint Security Committee. According to Tunisia’s Ministry of Finance, Algeria extended $300 million in emergency budget support in January 2024, coupled with a five-year gas supply extension agreement at preferential rates. Algeria also funded the construction of a 96 km border surveillance barrier under a bilateral memorandum of understanding formalized in April 2023. The two countries are co-developing a trilateral water security project with Libya, the Western Sahara Hydrological Basin Optimization Initiative, with Algerian financing contributions of $86.7 million announced at the June 2024 North Africa Water Security Summit.
In stark contrast, relations with the Kingdom of Morocco are defined by sustained diplomatic severance, military alert postures, and irreconcilable positions on the Western Sahara dispute. Algeria cut diplomatic ties with Morocco in August 2021, accusing Rabat of hostile actions, including espionage, cyber intrusions, and support for secessionist actors. The Algerian Ministry of Defense’s 2025 military budget allocates DA 1.6 trillion to border defense and aerial surveillance assets, a 13.2% increase over 2024, with strategic redeployment of air force assets near Tindouf and Béchar. Morocco’s 2020 normalization with Israel under the Abraham Accords further exacerbated tensions, with Algeria denouncing the bilateral military cooperation accord and banning Moroccan aviation from its airspace in September 2021. The prospect of a Mediterranean arms race remains acute, particularly following Morocco’s 2024 acquisition of Barak MX air defense systems and armed Heron TP drones from Israel, prompting Algeria’s accelerated procurement of counter-UAV platforms from South Korea.
Regionally, Algeria plays an assertive role in African multilateral bodies. In 2024, it contributed $61 million to the African Development Fund replenishment round, prioritizing food security and digital infrastructure projects. Algeria also secured chairmanship of the Committee of Ten (C-10) on United Nations Security Council Reform for the 2024–2026 cycle, advancing a Common African Position that advocates for two permanent African seats. In 2025, Algeria hosts the inaugural Maghreb Digital Transformation Summit in Oran, co-sponsored by the African Union Commission and the NDB, with 47 ministerial-level delegations confirmed as of April 30. Its co-leadership in the African Continental Free Trade Area (AfCFTA) Digital Payments Task Force, announced by the African Union Commission in January 2025, underscores its intent to influence the emerging regional digital financial architecture.
Algeria’s Arab League diplomacy is structurally informed by its commitment to the Palestinian cause and opposition to normalization with Israel. As president of the Arab League in 2022–2023, Algeria launched the Arab Cultural Heritage Revival Fund, with a seed capital of $50 million, 40% of which was directly contributed by the Algerian government. Algeria has systematically withheld support from Arab-Israeli normalization deals and publicly rejected invitations to participate in the Negev Forum. In March 2025, Algeria boycotted the Arab-Israel Tech Innovation Conference in Abu Dhabi, reinforcing its alignment with states such as Iraq and Syria in opposition to normalization frameworks. Conversely, Algeria maintains pragmatic relations with Gulf Cooperation Council members, including Qatar and Kuwait, focusing on investment inflows and currency swap arrangements. The Qatar Investment Authority maintains $2.3 billion in equity holdings in Algeria, spanning real estate, telecoms, and agribusiness, while Kuwait Finance House finalized a DA 84 billion syndicated Islamic finance agreement with Algerian banks in March 2025.
Across the Atlantic, Algeria’s relationship with the United States is structurally transactional but layered with security cooperation and trade divergence. The U.S. Department of Commerce reported $3.12 billion in two-way trade in 2024, dominated by LNG imports and pharmaceutical exports. Algeria participates in the U.S.-Algeria Strategic Dialogue on Counterterrorism, launched in 2022, and hosts a permanent U.S. liaison office within the African Union Mechanism for Police Cooperation (AFRIPOL) in Algiers. However, relations remain constrained by divergent positions on the Sahara conflict, Algeria’s stance on Israel, and its military procurement from Russia, which triggered a non-binding U.S. congressional resolution in November 2022 urging sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA). As of 2025, no executive sanctions have been imposed, but Algeria remains under Tier 2 monitoring within the U.S. State Department’s 2024 Arms Trade Compliance Index.
Algeria’s diplomatic posture toward emerging Indo-Pacific actors is increasingly defined by diversification strategies in defense procurement and energy diplomacy. Its 2023 naval procurement agreement with India, encompassing the delivery of six Project 75I-class submarines and co-production of BrahMos missiles, signals a shift toward non-Western defense integration. Meanwhile, its new LNG sales memorandum with Indonesia’s Pertamina, valued at $408 million over five years, reflects expanding engagement in Southeast Asia. Algeria’s participation in the Indian Ocean Rim Association as an observer since March 2024 supports its ambition to develop maritime strategic depth beyond the confines of the Western Mediterranean basin.
