2026 defense budget at $25 billion (≈ €23.5 billion), 20.6% of spending. Analysis of the reasons, sustainability, and capabilities targeted in relation to the Sahel and Morocco.
Summary
Algeria has approved a record defense budget for 2026 estimated at $25 billion (≈ €23.5 billion), or 20.6% of a national budget of $135 billion (≈ €126.9 billion). This trajectory continues the increases that began after 2022: approximately $18–22 billion in 2023–2024 and $24–25 billion in 2025–2026. The backdrop to this is structural rivalry with Morocco, instability in the Sahel (Mali, Niger), the need to renew fleets inherited from the 2000s, and the need to increase anti-drone defense. The constraint is macroeconomic: Brent prices trending downwards towards $60–62/bbl at the end of 2025 and projected at $51–59/bbl in 2026, with a budget deficit announced at around $40 billion. The political trade-off is clear: priority to the armed forces. Acquisition signals (rumors of Su-57/Su-34, AA reinforcement, MALE/HALE drones, electronic warfare) are aimed at achieving lasting regional superiority and coercive capability on the southern borders. The question is not only “how much” but “what for”: real availability, smart munitions, local MCO, and supply resilience under sanctions. The decisions made in 2026 will shape ten years of military effects; without rigor in maintenance and training, the investment will not deliver the full expected operational value.
The budget and its trajectory: a steady and deliberate increase
The 2026 draft budget places defense at the top of the list, ahead of Finance: 20.6% versus 20.3%. In terms of level, $25 billion (≈ €23.5 billion) continues the trend that began in 2022: ~$18–22 billion in 2023–2024, $24 billion in 2025, and a plateau at $25 billion in 2026. Based on a population of approximately 47.4 million, this represents ~€525 per person per year (conversion rate of $1 = €0.94), which is significantly higher than the continental average. Over ten years, a stable budget of $25 billion amounts to a cumulative total of $250 billion (≈ €235 billion), which is the financial equivalent of a major multi-domain renewal (air, land, sea, cyber). The signal is clear: the army is central to public policy. This hierarchy is also reflected in the share of the budget dedicated to heavy investments (platforms, guided munitions, radars) and personnel expenses necessary to maintain the build-up (technicians, SIGINT/EW specialists, instructors). Algeria remains the leading military spender in Africa, with around 21% of the state budget in 2024 according to international series, a trend that will continue in 2025–2026. It should be noted that the trajectory is not linear to the dollar (exchange rate fluctuations, budget reclassifications), but the trend remains strongly upward compared to the 2010–2020 averages ($8–11 billion). From a sustainability perspective, the government is betting on a tax and parafiscal base supported by hydrocarbons and intra-budgetary arbitrage in favor of sovereign functions. Strategic message: ring-fencing.
Macroeconomic sustainability: oil, deficit, and investment pace
Algeria has historically financed its spending through energy revenues. However, Brent has been sliding since mid-2025 towards the $62–66/barrel range, with 2026 projections around $51–59/b according to agencies (annual average): mechanically, export revenues are falling under current policy. Converted into euros, $62/bbl is equivalent to ~€58/bbl (at 0.94), and $51/bbl to ~€48/bbl. At the same time, the government is talking about a deficit of around $40 billion (≈ €37.6 billion), which is forcing it to prioritize investments. There are three levers that can be used to make a $25 billion budget sustainable: spreading out arms programs (phased deliveries), maximizing local MCO (repairs and parts “at home”), and reducing cost per flight hour through simulators/predictive maintenance. On the fuel side, an army that flies a lot is vulnerable to volatility: a €1 increase in military jet fuel has an immediate impact. Realistic trade-offs include prioritizing sensors (radar, ISR, electronic warfare) and smart munitions with a multiplier effect, then phasing in heavy platforms. In budgetary terms, defense absorbs “one dinar in five”; this ratio has political limits if real growth weakens. In the short term, sustainability depends on contracts with industrial offsets (sub-assemblies, engine/avionics MRO), which are a prerequisite for smoothing outgoing currency and creating skilled jobs. In the medium term, the major risk is dependence on a single supplier subject to sanctions: any logistical bottleneck comes at the cost of availability and additional expenses. A multi-source strategy (European sensors, Turkish/Chinese drones, Russian systems) reduces the risk but complicates C2 integration.
Strategic posture: Sahel, Moroccan rivalry, and mass effect
Algerian doctrine is structured around three axes: securing the southern borders, countering Moroccan pressure in the west, and strategic depth in the Mediterranean. In the south, instability in the Sahel (coups, reconfiguration of foreign presences, armed groups) generates flows of weapons, ammunition, and drones. The priority need is ISR: MALE/HALE drones, light surveillance aircraft, ground surveillance radars, and COM relays. A $25 billion budget allows for sensor-shooter coupling: monitoring (EO/IR, SAR-GMTI), identifying, and striking motorized troops with guided munitions (70 mm laser rockets, GNSS/INS kit bombs) without using front-line fleets. In the west, competition with Morocco is driving a dynamic of catching up and outbidding: multi-layered air defense, electronic warfare, long-range precision munitions (air-to-ground or cruise), and anti-drone warfare. The objective is twofold: deterrence through the cost imposed in the event of an incident, and freedom of action in its own airspace. In the Mediterranean, the focus is on maritime surveillance (EEZ, trafficking) and the protection of critical infrastructure (pipelines, bases). In this logic, “showcase” purchases (stealth fighters, tactical bombers) are less valuable than stacking layers: VHF/UHF radars, medium-range systems, offensive/defensive electronic warfare, armed reconnaissance drones, and a sufficient fleet of attack helicopters. The key is not the “exceptional” aircraft, but overall consistency: detection, decision-making, firing, ammunition replenishment, and reliable maintenance. The 2026 figures indicate that Algeria has chosen to invest in this “system of systems” rather than sticking with an aging mechanical core.
Probable purchases: aircraft, air defense, drones, and precision munitions
Converging signals point to interest in Russian Su-57 and Su-34 aircraft; several unverified leaks mention 12 Su-57 and 14 Su-34 aircraft. Caution: no consolidated public contract announcement. If these acquisitions are confirmed, they will involve separate supply chains: engines (AL-41/Izdeliye 30), AESA/pha-num radars, OBOGS, mission software, weapons (R-77-1, Kh-59/31, guided KAB). The total cost lies not in the unit price but in the initial batches (simulators, parts stocks, test benches, testing equipment), infrastructure (shelters, environmental equipment), and training. At the same time, integrated air defense will remain a priority: SHORAD/VSHORAD anti-drone layers, modernized medium-range capabilities, low-frequency radars to detect low SERs, and EW suites. On the drone side, Algeria has already explored various solutions; the 2026 phase authorizes local industrialization of assembly and increased provisioning (stations, links, SIGINT pods). Ammunition will drive the effect: guided rockets (cost per shot much lower than a missile), GPS/INS kit bombs, loitering munitions for land or air use. The optimal trade-off: increase useful flight time (high-level simulators), prioritize sensors/surface-to-air missiles and smart munitions, then phase in the most expensive platforms. Otherwise, the mass of expensive but unavailable platforms will undermine the actual effect. In short: buy effects before buying silhouettes.
Industry and availability: local MCO and risk of sanctions
The 2026 budget choice has a trade-off: avoiding dependence on a foreign supply chain under strain. There are two imperatives: localize part of the maintenance (airframe, engines, “line” avionics) and secure critical flows (hot parts, electronics, sensors). In concrete terms, this requires performance contracts: guaranteed availability (e.g., ≥ 75%), penalties/incentives, and measurable skills transfer (number of MRO projects carried out on Algerian soil, average lead times, MTBF). High-fidelity simulators reduce certain actual hours by 20 to 40%, freeing up fuel and engine potential; this is the least sexy but most profitable option. At the operational level, every 5 points of availability gained is equivalent to “one additional airframe” per squadron of 12 without purchasing new equipment. The other challenge is ammunition: building buffer stocks for 60–90 days of moderate intensity, with an annualized replenishment line. Algeria must also manage the interoperability of multi-source sensors (Russian, European, Turkish, Chinese): data formats, encryption, EW deconfliction. Without a robust C2 architecture, the accumulation of heterogeneous equipment creates blind spots. Finally, technical training (EW, radars, drones) determines the speed of ramp-up. Without qualified and well-paid technicians, a “modern” fleet remains grounded. These are recurring expenses, less visible than the purchase of a fighter jet, but crucial for converting $25 billion into concrete results.
What this budget really changes over ten years
With a constant budget, Algeria can: replace key fleets (combat aircraft, attack helicopters), densify its air defense, deploy a permanent ISR network in the south, and professionalize anti-drone warfare. The evaluation criteria will be simple: availability of equipment, useful flight hours generated, fire rate of guided munitions, and responsiveness of logistics chains. The temptation is well known: buy “flagship” platforms and then cut back on MCO. Bad calculation. The dominant forces are those that fire, repair quickly, and return to the area with up-to-date sensors. This budget can produce that effect, but only if operating funds follow the same trend, if critical supplies are secured, and if the plurality of suppliers remains controlled by a demanding C2 architecture. Algeria is playing a rational card here: converting a volatile income into a lasting military advantage. The gamble will be judged by actual availability, not by the length of press releases.
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