Algeria's government will continue to lead investment in the country in an effort to diversify the economy and respond to the demands of protesters calling for political and economic changes. Restrictions on foreign investment will be maintained in 2011-15 to protect Algeria's national economic interests and to promote domestic industries, but they could be eased towards the end of the forecast period. Since 2009 the government has taken an increasingly restrictive approach towards foreign investment, adopting a variety of measures including a tougher tax regime, a limit of 49% on foreign ownership and policies to reduce the amount of imports coming into the country. These policies have been supported by the state-linked labour unions. The hydrocarbons sector will receive preferential treatment and is in need of major investment to maintain production levels, which are already below potential, and to meet delivery contracts.

The privatisation or consolidation of small state-owned firms is unlikely to proceed with much enthusiasm over the forecast period. Limited capital market financing for domestic private firms and foreign-ownership caps mean there are few possible buyers of public enterprises in any case. The state will assume a large role in the telecommunications sector as the government proceeds with its acquisition of the local mobile-phone operations of Egypt's Orascom Telecom. Algeria's private sector is comparatively small because of the security problems of the 1990s, the underdevelopment of financial services and excessive bureaucracy. The government is attempting to address these issues, but private-sector leaders have complained of the increasing role of the state in industry and of difficulties in obtaining bank finance or property.