Legal Market Overview
Shortly after Abdelaziz Bouteflika announced his candidacy for a fifth presidential term last February, a wave of weekly protests, without precedent since the Algerian Civil War, took place across the North African country. Protestors demanded his immediate resignation, which eventually took place in April. The presidential election was later postponed – and political instability has since rocked the country, scaring off potential investors.
Changes to the 49/51 regulation, which prevents foreign entities from owning over 49% of any business, were meant to be forthcoming, but have since been stalled. Legal firms are hopeful that any relaxation of this rule will stimulate work, opening up new sectors to investment. Despite its aim of diversifying the economy, which is heavily dependent on hydrocarbons, the Algerian government has only managed to slightly increase work in the development of the automotive, pharmaceutical and renewable energy sectors.
Amidst political upheaval, firms report some increase in instructions from these industries, but traditional mandates in energy still dominate. Algeria’s revised hydrocarbons law, designed to encourage exploration, were drafted but the implementation was subsequently delayed until the instability and uncertainty subside.
As a result of the political turbulence, the number of transactions in each practice area has suffered. International firms, primarily French practices with a presence in Algeria, managed to solidify their presence on the local market. In what appears to be a downward trend, domestic firms are struggling to gain a foothold, losing out on the country’s most significant work to multinational teams with global networks and deep resources.