Esteban Obiang’s second-half goal delivered a huge shock, leaving the defending champions needing to beat the Ivory Coast in their final match.
Obiang struck from a corner to end Algeria’s run of 35 unbeaten internationals, inflicting their first defeat since October 2018.
The shock Group E result leaves Algeria bottom of the standings and needing a win in their last group game against the Ivory Coast on Thursday to stand any chance of advancing.
The tight nature of the group will make Thursday’s final round of games fascinating, with the Equatoguineans facing the Leone Stars in Limbe at the same time as Algeria take on Ivory Coast in Douala.
Algeria were held to a goalless draw by Sierra Leone in their opening match and were once again frustrated in front of goal – this time by a side mostly comprised of players from clubs in the lower leagues in Spain.
Youcef Belaili had two attempts blocked by keeper Jesus Owono shortly before the Desert Foxes had the ball in the net for the first time midway through the first half.
Owono made a fine reaction save to keep out Riyad Mahrez’s header but Baghdad Bounedjah tapped in the rebound – only for an offside flag against Mahrez to cut Algeria’s celebrations short.
Equatorial Guinea then threatened, as Pablo Ganet had a low free-kick clawed away by Rais M’Bolhi and Iban Salvador sent a fierce strike flashing past Algeria’s right-hand upright.
Belaili had a shot deflected wide midway through the second half before Josete Miranda helped on Salvador’s corner for Obiang to convert for the shock winner.
Algeria had chances to equalise, with their record goalscorer Islam Slimani miskicking from close range before Belaili’s rasping low strike from the edge of the area was then ruled out for offside.
Obiang made a crucial block to shut down an opening for Ramy Bensebaini and the Equatorial Guinea defender subsequently diverted Youcef Atal’s cross behind.
The Equatoguineans managed five minutes of injury time well and defeat leaves Algeria coach Djamel Belmadi sweating on their final match against Ivory Coast, with the Elephants not yet assured of progress to the knockout stages themselves.
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