Algeria - Country Commercial Guide
Digital Economy
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Overview                                                                          

The digital economy in Algeria has been growing steadily, with significant advancements in internet and mobile connectivity. As of early 2024, Algeria notably increased internet users and mobile connections. Algerian government focuses on improving its digital infrastructure, regulatory frameworks, and digital services to support this growth. This includes enhancing internet speeds and expanding access to digital tools and platforms to a growing population reaching 46 million in 2024. Here are some key points:

  • Internet Penetration: Internet penetration in Algeria has been rising, with a significant portion of the population now online. Algeria had 33.49 million internet users in the first quarter of 2024 (the equivalent of 72.9% of the total population with a yearly growth of 3.9% of the number of internet users).  
     
  • Mobile Connectivity: The number of active cellular mobile connections has also seen a substantial increase, a total of 50.65 million cellular (95.2% of the population owns a mobile phone). In Algeria, there are three main operators: State-owned mobile operator Mobilis, the largest one in the country with around 22.1 million subscribers as of Q3 2024; Djezzy, previously known as Orascom Telecom Algeria, is another major operator with approximately 15.6 million subscribers; and finally, Ooredoo, formerly known as Nedjma, has about 12.9 million subscribers.
      
  • Social Media Usage: Social media use continues to grow, with more people engaging on various platforms. Algeria hosted 24.85 million social media users in January 2024 (54.1% of the total population). 
     
  • Online payment: In January 2024, only 2.8% of the population possessed a credit card and 22.9% a debit card. In 2023, 8.2% of the population made purchases using mobile phones or the internet and 4.7% sent money.  

Despite Algeria’s efforts to accelerate its digitization progress, the country faces challenges including an incomplete regulatory framework, a lack of knowledge in using digital service platforms, and providing connection access to remote areas, mainly in the Sahara. The government of Algeria has put its efforts into developing the digital economy through the construction of new digital infrastructures, working on new regulations and improving existing ones, encouraging entrepreneurship in the ICT and digital sectors by providing help to startups and microenterprises, and focusing on advancing education through the creation of technology hubs around the country.  


Digital Market Challenges

In the past few years, Algeria has grown and developed its digital economy significantly. However, the country faces several challenges despite all this progress. We can name:

Regulatory framework: The regulatory environment can be described as restrictive and one which adapts slowly to international digital trends. This includes challenges in e-commerce, data protection laws, and the overall regulation governing digital transactions.  

Digital infrastructure: Despite the progress, Algeria is still behind compared to developed nations. The main issues are internet connectivity and the limited access to high-speed broadband in rural areas where 24.5% of the total population is concentrated (75.5% of Algeria’s population lives in urban areas).

Digital skills: A portion of the Algerian population lacks digital use skills. Educating people to use more digital tools is happening gradually. Greater progress is happening with younger generations who are more tech-savvy.  

Business adoption of digital technologies: Some businesses in Algeria are not familiar with digital technologies. This is partly linked to the cost of the digital transformation and not enough awareness and understanding of its benefits.

Public procurement law: In the IT Sector, the Algerian government is the largest buyer with its institutions and state-owned companies.

State-owned enterprises (SOEs): are subject to the public procurement law which requires all SOEs to issue tenders to provide goods and services. The current procurement regulations favor the lowest-cost bidder, particularly for appliances and electronic components.    

Data protection and localization: This is another challenge for foreign companies to enter the Algerian market of digitization. Indeed, digitization includes personal data and involves its protection. Algeria has established a legal framework for data privacy through Law No. 18-07, enacted on June 10, 2018, and officially came into force on August 10, 2023. This law outlines the conditions for collecting, recording, organizing, conserving, adapting, modifying, extracting, consulting, using, communicating, transmitting, disseminating, or making available personal data. The National Authority for the Protection of Personal Data (ANPDCP) is the main authority in charge of regulating data privacy and responsible for overseeing the data protection laws implementation and enforcement in the country. This authority ensures that personal data is processed in compliance with legal standards to protect individuals’ privacy and personal information.

Algeria is strictly protecting the flow of personal data in such a way that it becomes challenging to foreign companies to enter the market. The government of Algeria, with its law, made the localization of data mandatory. The data must be stored within the country to prevent unauthorized access.  

Cybersecurity: Algeria has been building a regulatory framework for cybersecurity through regulations and laws. The primary authority responsible for leading cybersecurity efforts is the National Council for Information System Security and falls under the President of the Republic’s jurisdiction. The Ministry of Post and Telecommunications plays a significant role in shaping and enforcing cybersecurity regulations. This ministry collaborates with other governmental bodies to develop and implement strategies aimed at enhancing the country’s cybersecurity infrastructure.

However, the national cybersecurity strategy is developed and implemented in Algeria mainly by the Ministry of National Defense and it actively monitors cyberspace for potential threats and attacks. They work on identifying cyber threats and implementing effective control and detection mechanisms. This leads to some challenges for foreign companies active in the cybersecurity field to get approvals of the use of their technology locally. The Algerian government is very careful when it comes to data privacy and cybersecurity.  

Foreign competition to U.S. companies: European, Chinese, and South Korean companies are actively competing with U.S. firms in Algeria’s digital market due to their presence for decades and price differences.  Chinese competition is becoming more and more important. It is a part of a broader trend where Chinese tech firms are expanding their presence in the Middle East and North Africa (MENA) region. Huawei is a prominent player getting important national projects. For example, Huawei had authorization from the Algerian Government to build a new data center, part of the country’s ambitions to enhance its digital infrastructure.  


Digital Trade Opportunities

Growing areas in Algeria

Despite the challenges, Algeria presents several promising market opportunities in public and private. Indeed, SOEs as well as several ministries, and public institutions, are the main customers and are using foreign companies’ solutions and products. The private sector is also improving its use of technological products.  

Algeria prepared a new digital strategy, extending through 2029 build on improvement of the forthcoming digitalization law and enhanced cybersecurity. This strategy is expected to create a conducive environment for innovation and economic growth. Algeria’s High Commission of Digitization (HCD) oversees the implementation of digital policies.  

Here are some key areas with significant potential:

Information and Telecommunication Technology (ICT): Investment in telecommunications infrastructure, mainly in improving the internet speed in urban areas and expanding it to rural areas, is where U.S. companies can find a niche to enter the Algerian market primarily in 5G and FTTH. Even if the Algerian government has invested significantly in ICT and despite the strong presence of Chinese firms and the existing competition with other foreign firms, there are still gaps for U.S. companies in areas like IT devices, data centers, cloud computing, hardware and software, and servers.  

Algeria’s state-owned company Algerie Telecom holds a monopoly over the country’s fixed-line and fiber optic networks and is responsible for developing Algeria’s telecommunication sector.  Algerie Telecom falls under the Group Telecom Algeria’s jurisdiction which resides within the Ministry of Post and Telecommunications’ jurisdiction, in which multiple directorates focus on developing and regulating the ICT sector.  

Startups and innovation: In 2020, the Delegate Ministry of Knowledge Economy and Startups was established. In 2022, it was elevated to Ministry of Knowledge Economy, Startups and Microenterprises to promote and develop the startup ecosystem. Since the creation of the ministry, more than 2,000 startups offering digital solutions have been certified, 7% of which are in FinTech. Innovative startups benefit from a range of facilitation resources and exemptions. As crowdfunding was introduced in the 2020 complementary finance law, the ministry ensured, in partnership with COSOB (The Algerian Stock Exchange Regulatory Authority) that startups can access equity through crowdfunding, which is a more flexible and accessible way to raise money. The enacted public procurement law in Algeria has made a more adaptable process for public entities to engage with startups through direct negotiation. This initiative aims to channel a greater portion of public expenditure into startups and innovation and creating opportunities for these emerging businesses.  

Another help to startups is the Algerian Startup Fund (ASF), a public venture capital company, that invests in early-stage startups. The Algerian government is prioritizing the development of technology startups as part of its transition to a knowledge-based economy. There are initiatives in place to support the viability of advanced technology startups, including strategic intellectual property capture, commercialization of university research, and coaching and mentoring. The Ministry of Knowledge Economy, Startups and Microenterprises is also working on a network of accelerators that will help large firms develop partnerships with startups by allowing them to access office infrastructure and a supportive business environment for nurturing new ideas and incubating projects that could be profitable to their sponsors. 

Here, U.S. companies can have opportunities to share their expertise in the creation of the startup ecosystem, intellectual property protection, and venture capital and create potential partnerships with different stakeholders.  

Government Contracts: The Algerian government is the largest buyer in the IT sector, making significant investments in IT products and services. This includes opportunities for U.S. companies to provide IT solutions to government institutions and state-owned companies. Algeria is progressing in terms of modernization of public services including e-governance platforms, digital identity systems, and online public services.

E-commerce: With the increase in internet penetration and the growth of the middle class, there is a growing demand in terms of online payment and purchases through online retail platforms and logistics solutions. However, online purchases with credit or debit cards are rare and people are mainly paying cash after delivery of the ordered product. Efforts are still being made in this field.  

Fintech: Algeria is gradually developing its Fintech to include mobile banking, digital wallets, and online payment systems. Algeria has 19 banks, including 6 state-run banks. The main foreign banks are French, Middle Eastern, British (HSBC) and American (Citibank). Two entities GIE Monétique and SATIM (Interbank Transactions and Electronic Payment Automation Company) can facilitate digital payments. They are both key players in Algeria’s electronic payment ecosystem and the modernization of the country’s banking system. Their main functions are interbank transactions, regulation, monitoring, enhancing the security of the electronic payment system and facilitating online in-store payment.  

The Bank of Algeria is the main actor playing a crucial role in the development and regulation of the Fintech sector in the country through establishment and enforcement of the regulation, promotion of financial inclusion, collaboration with both entities GIE Monétique and SATIM, and encouraging innovation. U.S. companies have opportunities through the introduction of innovative payment solutions, platforms, and services for digital investment, financial inclusion for people living in rural areas, and the introduction of advanced services and technologies in banks.  

Healthcare Technology: Algeria is still behind in terms of HealthTech, but the country is driven by a growing demand of advanced medical devices. The limitation in this sector is related mainly to prices of cutting-edge technology which slows down the demand of those products. However, U.S. companies can still find niches for their devices.  

Digital content and media: This includes online news and streaming services. Algeria’s young population depends on the media as the main source of information.  

Agricultural Technology: Including Internet of Things (IoT) and digital tools in the agricultural sector can enhance efficiency and productivity with for example automated irrigation systems, farming, etc. In 2024, agriculture is expected to contribute approximately 12.4% to Algeria’s GDP.  

Oil and gas sector: With approximately 93% of Algeria’s total exports, the oil and gas sector is key among all other sectors of activity of the country. Digitization is playing an important role in the oil and gas sector. Indeed, digital technologies are being used mainly to enhance operational efficiency through the use of IoT sensors, real-time data analytics to monitor and optimize production, reservoir management, etc. The reduction of carbon emissions is also using a lot of AI technology. The main actor in oil and gas in Algeria is the SOE Sonatrach which is implementing gradually new digital solutions.  

Cybersecurity: U.S. cybersecurity firms can find opportunities in this field as digital adoption increases and robust cybersecurity solutions are needed.  

Artificial intelligence: Artificial Intelligence (AI) is gaining a significant place in Algeria even though the country is still far from the international standards. However, to boost this area, the country has adopted a national strategy focused on research and innovation, this is mainly through the higher education sector and the promotion of the startup ecosystem. Indeed, as proof of this focus, the Algerian government opened The Technology Center of Sidi Abdellah, which operates under the authority of the Ministry of Higher Education and Scientific Research. The University of Sidi Abdellah is part of this large technology center. It collaborates with various institutions, including the National School of Artificial Intelligence (ENSIA) and the National Higher School of Mathematics (NHSM), to advance research and commercialization efforts. This university is involved in significant partnerships, such as with the Pulte Institute for Global Development, to enhance STEM learning and research in Algeria.

Main IT products imported in Algeria

Various trade opportunities exist in Algeria thanks to the efforts the country is making to develop its digital economy. The main products opportunities to be exported to Algeria are:  

Telecommunications and 5G equipment: This includes both hardware and software essential for mobile and fixed telecommunications. Algeria relies heavily on 3G and 4G LTE for mobile communications and ADSL and fiber for fixed telecommunications. The deployment of the 5G is still at the early stage in the country and is still pending approvals. This is an important market that U.S. companies should target.  

IT Equipment: This encompasses a wide range of products such as servers, data centers, cloud computing solutions, hardware, and software. These are crucial for the country’s digital transformation and modernization efforts.

Fiber Optic Cables: Both terrestrial and submarine fiber optic cables are vital for improving internet connectivity and broadband adoption rates in Algeria.

Electronic Components: Printed circuit boards and other electronic components are also significant imports, supporting various ICT infrastructure projects.

Audio/Video Equipment: Products like TVs and video players are popular among Algerians, especially with the rise of 3D TVs and streaming services. However, some of those products are already assembled in Algeria. The opportunities would be more in audio/video equipment for TV and Radio channels. The Audiovisual field is opening more private channels which can be a good niche for U.S. companies.  

Export opportunities

Given restrictions on imported products and the new policy of Algeria to promote first local production to reduce the import bill, Algeria’s export diversification program includes creating an electronics manufacturing hub in North Africa by expanding local manufacturing of ICT equipment, such as mobile phones, home appliances, and audio equipment.  Algeria-based manufacturers include state-owned companies like ENIE and ENIEM (for some electronic components and devices), private companies like Condor Electronics and Bomare Company, and foreign companies like Samsung (Korea), Huawei (China) and Wiko (France).  The expansion of local manufacturing presents opportunities for U.S. exporters of electronic components, printed circuit boards, OEM, and audio equipment.

Leading Sub-Sectors/Best Prospects
  • Telecommunications equipment (hardware and software)
  • Cables (fiber optic and marine)
  • IT equipment (hardware, software, integrated solutions, cloud computing, DDC)
  • Electronic components, printed circuit boards
  • Audio/video equipment
Resources:
Related trade shows:  

CTO Forum Algeria, Algiers
Algeria Digital Summit, Algiers
Cybersecurity Summit Algeria

For more information, contact Hadia Beghoura, Commercial Specialist – Algeria
Hadia.beghoura@trade.gov