Algeria tries to hide its large military budget through the finance ministry

At the end of last year, Algeria announced that it would increase its military budget by 2023 amid heightened regional tensions with Morocco. Despite the fact that the Arab country is already one of Africa's biggest military spenders, the Algerian government said it would allocate some $23 billion to the arms and defence sector, an increase of more than 110% in a single year.

Algeria's decision has alarmed the West because of its enmity towards Morocco, its support for the Polisario Front and its strong arms ties with Russia. Even the African Union (AU), which supports initiatives such as 'Silencing the Guns' that seek to end conflict on the continent, has been concerned about Algeria's increased military spending.  

For these reasons, Algeria opted to make a small reduction in the 2023 military budget. However, as Le360 reveals, while Algiers was cutting the defence budget, it was "disproportionately inflating" the Ministry of Finance.

The Moroccan daily notes that Algeria's Finance Law will allocate some 2,486,000,000,000,000 Algerian dinars (more than $18 billion) in 2023 to an item called "unallocated amount" for which no further details are provided. Through this "unallocated amount", the Ministry of Finance dethrones the Ministry of Defence as the portfolio with the largest budget. However, as Le360 underlines, this amount "corresponds exactly and strangely to the same figure that serves as the Algerian army's budget for this year, i.e. 2,486,000,000,000 Algerian dinars".  

The Ministry of Finance's real budget would therefore be 1,218,849,000 Algerian dinars, which means that the arms and defence sector will be the real beneficiary for yet another year. Since 2000, Algeria has been increasing its military spending. Over the past 23 years, the Ministry of Defence's budget has grown from $2.7 billion to $18 billion. 2012 was the year in which it exceeded 10 billion, and since then military spending has only grown.

It is likely that through this investment in defence Algeria will begin to modernise and invest in military intelligence, as well as diversify its arms sources in order to stop depending on Russia, its main supplier. Other countries such as China, Turkey and Iran could replace Moscow as Algeria's major military partner.  

If the Algerian government can distance itself from the Kremlin, it could silence criticism from Washington. Several senators have called for sanctions against the Algerian government on the basis of CAATSA (Countering America's Adversaries Through Sanctions Act). Through this federal order, the US government imposes sanctions on countries that enter into defence or intelligence agreements with certain nations, such as North Korea, Iran or Russia.

Recently, Algerian President Abdelmadjid Tebboune himself, in an attempt to disassociate himself from Russia, criticised the presence of Russian mercenaries from the Wagner group in Mali and postponed a visit to Moscow planned for December 2022. In November, the Algerian authorities also cancelled joint military exercises with Russia that were to take place near the border with Morocco.

Analysts have also warned Al-Arab that Algeria could use part of its arms budget to provide military support to pro-Algerian groups such as the Polisario Front, as well as to cover up corruption within the army.