Algeria Wins Financial Trust Battle… but Does the Major Reform Phase Begin?
By economic expert Houari Tigharsi
Translated by Dr. Hana Saada
Algeria’s exit from the Financial Action Task Force (FATF/GAFI) grey list was not merely a technical decision or a passing financial procedure, but rather an international acknowledgement confirming that the country has regained a significant portion of confidence in its financial and regulatory system, following a series of extensive legislative, institutional and regulatory reforms initiated since 2024.
Commenting on this development, the statement that “Algeria has won the battle of financial trust and continues to improve its business climate” carries deep economic implications, as trust has become today the most valuable capital sought by markets, international financial institutions, and foreign investors.
From “Compliance Battle” to “Attractiveness Battle”
Algeria has succeeded in winning the compliance battle with transparency standards and anti-money laundering and counter-terrorism financing requirements through:
- Updating the legal framework related to financial crimes
- Strengthening the powers of the Financial Intelligence Processing Unit
- Imposing “Know Your Customer” (KYC) procedures within banks
- Tightening oversight over sensitive non-financial professions
- Digitising a number of financial and commercial procedures
- Developing information-sharing mechanisms between regulatory bodies
However, the next phase is expected to be more complex, as it concerns shifting from regaining trust to transforming that trust into investments, financial inflows, and concrete projects.
Expected Major Reforms in the Algerian Financial System
- Full digitisation of the banking sector
Expected measures include the generalisation of electronic payments, the launch of digital banks, the development of open banking, the expansion of electronic signatures, and the digitisation of credit, loans, and transfers. This is expected to reduce the informal economy and improve transparency. - Modernisation of the capital market
The next phase may include revitalising the Algiers Stock Exchange, listing new public and private companies, establishing investment and venture capital funds, and developing Islamic finance instruments and green bonds. - Greater liberalisation of the banking sector
Anticipated reforms include the entry of new foreign banks, stronger competition between banks, easier financing for start-ups and SMEs, and shorter loan approval timelines. - Reform of the exchange rate system
Algeria may gradually move towards greater exchange rate flexibility, easier financial transfers for investors, improved foreign trade services, and enhanced convertibility of the dinar in the medium term. - Digitisation of taxation and customs
This would help combat tax evasion, broaden the tax base, accelerate commercial procedures, and improve Algeria’s ranking in international business indicators. - Integration of the informal economy
Given the large volume of cash circulating outside the banking system, the state is expected to encourage bank deposits, expand electronic payment systems, strengthen financial inclusion, and develop Islamic finance to attract savings. - Transition towards a data- and AI-driven economy
Future reforms include full administrative digitisation, interconnected databases, digital identity systems, and the use of artificial intelligence in taxation, customs, and financial oversight.
What Comes After FATF?
After exiting the grey list, Algeria’s real challenge lies in improving its sovereign rating, attracting foreign direct investment, reducing external financing costs, developing a modern financial market, and building a regional financial hub in North Africa.
The Most Optimistic Scenario
If reforms continue at the same pace, the next five years could see Algeria transition from an economy largely dependent on hydrocarbon rents to a more diversified, open economy with stronger capacity to attract capital.
Conclusion
Algeria has indeed won the international financial trust battle, but the most important battle has yet to begin.
In today’s economic landscape, international compliance alone is not enough; the real test lies in transforming this trust into new factories, foreign investments, start-ups, jobs, and sustainable economic growth.
Exiting the grey list is not the end of the journey, but rather the beginning of a new path toward building a renewed financial and economic Algeria.
— 𝐄𝐍𝐃 —
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