Sediment deposits in North African catchments contribute to around 2%–5% of the yearly loss in the water storage capacity of dams. Despite its semi-arid climate, the Tafna River plays an important role in Algeria’s water self-sufficiency. There is continuous pressure on the Tafna’s dams to respond to the demand for water. The Soil and Water Assessment Tool (SWAT) was used to evaluate the contribution of different compartments in the basin to surface water and the dams’ impact on water and sediment storage and its flux to the sea in order to develop reservoir management. The hydrological modelling fitted well with the observed data (Nash varying between 0.42 and 0.75 and R2 varying between 0.25 and 0.84). A large proportion of the surface water came from surface runoff (59%) and lateral flow (40%), while the contribution of groundwater was insignificant (1%). SWAT was used to predict sediments in all the gauging stations. Tafna River carries an average annual quantity of 2942 t·yr−1 to the Mediterranean Sea. A large amount of water was stored in reservoirs (49%), which affected the irrigated agricultural zone downstream of the basin. As the dams contain a large amount of sediment, in excess of 27,000 t·yr−1 (90% of the sediment transported by Tafna), storage of sediment reduces the lifetime of reservoirs.