Algeria plans to further open its banking market to private, local and foreign investors. Its government intends to allow state-owned banks to get listed in order to diversify their sources of financing and grow their stock activities, under 2017 state budget project.

According to Reuters, under this project, foreign investors will be able to become majority shareholders in Algerian banks, thus overwriting the 51/49 rule imposed to these investors when partnering with local institutions.

The project however states that banks that want to get listed on the Algiers stock market would first have to get the approval of the central bank, before entering any agreement that might give foreign companies a majority stake in their capital.

Analysts estimate that it is difficult to know if the privatization of banks, via IPO, will attract foreign capital. Indeed, in June 2016, the listing of a state-owned cement plant was abandoned, due to a lack of demand. Presently, the Algiers bourse has only five companies listed and cash flow on the market remains extremely weak.

The move to let public banks get listed and allow foreign investors acquire majority stakes in their capitals comes amid slump in oil revenues.

Algeria currently has six public banks that own most of the sector’s assets.

Let’s recall that in 2007, Algerian authorities planned the same move when they announced the privatization of the Crédit Populaire d’Algérie (CPA) only to go back on their decision two days before the deadline for submission of tenders. As an explanation for their change of mind, they mentioned concerns about global financial crisis.