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www.ft.com Egypt’s deepening economic crisis
The editorial board yesterday
4-5 minutes
Receive free Egypt updates
We’ll send you a myFT Daily Digest email rounding up the latest Egypt news every morning.
For almost a decade, Egypt’s president Abdel Fattah al-Sisi has promised his people that he would revive the economy and build a new state. But when Egypt this year marks the 10th anniversary of the coup that brought the former army chief to power, Egyptians will find little to cheer.
Instead, tens of millions of people will be struggling to put food on their tables as the Egyptian pound has fallen to record lows and inflation soars above 20 per cent. The private sector is grappling with an almost year-long foreign currency shortage that is choking businesses. Egypt is a country in crisis.
Like much of the world, the Arab state was hit hard by Covid and is enduring headwinds caused by Russia’s war in Ukraine. But Sisi’s autocratic regime is also squarely to blame as it has presided over a state living beyond its means.
Last year, Cairo was forced to go to the IMF for the fourth time in six years. Even before that $3bn loan was secured in October, Egypt was the fund’s second biggest debtor after Argentina. At the core of its problems is an over-reliance on hot money flowing into its domestic debt as a source of foreign currency, and the muscular expansion of the military’s footprint across the economy.
The vulnerabilities of the former were exposed when investors withdrew about $20bn from Egyptian debt around the time Russia invaded Ukraine. Egypt, which had been paying the world’s highest real interest rate to attract the portfolio inflows while artificially propping up the pound, was forced to turn to Gulf states for bailouts. The central bank has since been devaluing the pound in phases to bring supply-demand equilibrium to the forex market. It has agreed with the IMF to move to a flexible exchange rate, with the pound down about a third against the dollar since October.
The deeper problem is the military’s role in the economy, which stretches from petrol stations to greenhouses, pasta factories, cement plants, hotels, transport and beyond. It also oversees hundreds of state infrastructure developments, including vanity projects such as building a new administrative capital and cities in the desert.
It is a phenomenon that has crowded out a private sector wary of competing with the most powerful state institution, and stymied foreign direct investment that would generate jobs and a more sustainable source of hard currency. Yet since Sisi’s regime first went to the IMF for a $12bn bailout in 2016, the fund and donors have, inexplicably, tiptoed around the issue while Cairo quashed internal debate.
The IMF appears to be belatedly addressing the issue with the latest loan. It says Cairo has committed to reducing the “state footprint” in the economy, including military-owned companies, by withdrawing from “non-strategic” sectors and through asset sales. State-owned entities will also be required to submit financial accounts to the finance ministry on a twice yearly basis and provide information on any “quasi-fiscal” activities to improve transparency.
It is now up to the IMF and donors to use their leverage to ensure the military-led regime meets its commitments. After conducting some reforms in 2016 to secure the $12bn loan, the government continued to expand the army’s role, while failing to make the serious changes the economy needs.
It is often assumed that Egypt is too important to fail, and that donors or Gulf states will always bail Cairo out. But the reality is with an estimated 60mn people living below or just above the poverty line and getting poorer, the state is already failing its citizens. If Cairo’s allies are serious about helping the country, they must pressure Sisi to act on his pledges.
The editorial board yesterday
4-5 minutes
Receive free Egypt updates
We’ll send you a myFT Daily Digest email rounding up the latest Egypt news every morning.
For almost a decade, Egypt’s president Abdel Fattah al-Sisi has promised his people that he would revive the economy and build a new state. But when Egypt this year marks the 10th anniversary of the coup that brought the former army chief to power, Egyptians will find little to cheer.
Instead, tens of millions of people will be struggling to put food on their tables as the Egyptian pound has fallen to record lows and inflation soars above 20 per cent. The private sector is grappling with an almost year-long foreign currency shortage that is choking businesses. Egypt is a country in crisis.
Like much of the world, the Arab state was hit hard by Covid and is enduring headwinds caused by Russia’s war in Ukraine. But Sisi’s autocratic regime is also squarely to blame as it has presided over a state living beyond its means.
Last year, Cairo was forced to go to the IMF for the fourth time in six years. Even before that $3bn loan was secured in October, Egypt was the fund’s second biggest debtor after Argentina. At the core of its problems is an over-reliance on hot money flowing into its domestic debt as a source of foreign currency, and the muscular expansion of the military’s footprint across the economy.
The vulnerabilities of the former were exposed when investors withdrew about $20bn from Egyptian debt around the time Russia invaded Ukraine. Egypt, which had been paying the world’s highest real interest rate to attract the portfolio inflows while artificially propping up the pound, was forced to turn to Gulf states for bailouts. The central bank has since been devaluing the pound in phases to bring supply-demand equilibrium to the forex market. It has agreed with the IMF to move to a flexible exchange rate, with the pound down about a third against the dollar since October.
The deeper problem is the military’s role in the economy, which stretches from petrol stations to greenhouses, pasta factories, cement plants, hotels, transport and beyond. It also oversees hundreds of state infrastructure developments, including vanity projects such as building a new administrative capital and cities in the desert.
It is a phenomenon that has crowded out a private sector wary of competing with the most powerful state institution, and stymied foreign direct investment that would generate jobs and a more sustainable source of hard currency. Yet since Sisi’s regime first went to the IMF for a $12bn bailout in 2016, the fund and donors have, inexplicably, tiptoed around the issue while Cairo quashed internal debate.
The IMF appears to be belatedly addressing the issue with the latest loan. It says Cairo has committed to reducing the “state footprint” in the economy, including military-owned companies, by withdrawing from “non-strategic” sectors and through asset sales. State-owned entities will also be required to submit financial accounts to the finance ministry on a twice yearly basis and provide information on any “quasi-fiscal” activities to improve transparency.
It is now up to the IMF and donors to use their leverage to ensure the military-led regime meets its commitments. After conducting some reforms in 2016 to secure the $12bn loan, the government continued to expand the army’s role, while failing to make the serious changes the economy needs.
It is often assumed that Egypt is too important to fail, and that donors or Gulf states will always bail Cairo out. But the reality is with an estimated 60mn people living below or just above the poverty line and getting poorer, the state is already failing its citizens. If Cairo’s allies are serious about helping the country, they must pressure Sisi to act on his pledges.
fedro10
è la somma che fa il totale...
Business news: Egitto, esportazioni in aumento del 23,3 per cento da gennaio a ottobre 2022
I dati dell'Agenzia centrale per la mobilitazione pubblica e le statistiche dell'Egitto (Capmas) hanno rivelato un aumento del valore delle...
www.agenzianova.com
Business news: Banca centrale Egitto, erogati oltre 2 miliardi di dollari per sbloccare le merci nei porti
Le banche dell'Egitto hanno erogato più di due miliardi di dollari negli ultimi tre giorni per soddisfare le richieste degli importatori....
www.agenzianova.com
pietro17elettra
Nonno pensionato
Italy's foreign minister eyes migration, energy on trip to Cairo
22/01/2023 16:45 - RSF
By Aidan Lewis
CAIRO, Jan 22 (Reuters) - Italy's Foreign Minister said on Sunday his country saw Egypt as an important partner in stemming irregular migration across the Mediterranean and in bolstering its energy security.
Though Egypt has largely prevented departures of migrant boats from its own north coast since 2016, the number of Egyptian nationals crossing to Europe via Libya has risen sharply.
In 2022, 20,542 Egyptians disembarked in Italy, up from 1,264 in 2020 and the largest group by nationality, according to data published by Italy's interior ministry.
As part of efforts to tackle irregular migration, Italy was "ready to have more legal migrants, including those coming from Egypt", Foreign Minister Antonio Tajani said during a trip to Cairo.
He mentioned pilot projects to give migrants grants to study and train in Italy, though he did not give any numbers at a press conference with his Egyptian counterpart.
Tajani also called for a resolution of Libya's crisis that would lead to elections and a new constitution.
"The solution to the Libyan problem is also part of the solution of the illegal immigration problem," said Tajani.
Both Egypt and Italy have been deeply engaged in Libya, where migrant smugglers have found space to flourish amid conflict and political stalemate.
Italy and Europe were also looking to North Africa to meet their energy needs in the wake of the war in Ukraine, Tajani said.
Italy's Eni (ENI.MI) has a strong presence in Egyptian gas production. Tajani said Italy was working to strike more agreements with producer countries.
"I believe Egypt should become one of Italy's big partners in the Mediterranean. Italy aspires to be a big European energy hub and on this point there can be convergence with Egypt," he said.
The cases of Giulio Regeni, an Italian student found dead in Egypt in 2016, and Patrick Zaki, an Egyptian who was studying in Italy and is on trial under charges of spreading false news, were also addressed in talks with Egyptian President Abdel Fattah al-Sisi and Foreign Minister Sameh Shoukry, said Tajani.
"The problem was raised by the president, who told me it was the intention of Egypt to resolve the problems, and remove all the obstacles," he said.
A statement by Sisi's office made no mention of the cases.
(Editing by Andrew Heavens)
(([email protected]; +20-1001174410
)
22/01/2023 16:45 - RSF
By Aidan Lewis
CAIRO, Jan 22 (Reuters) - Italy's Foreign Minister said on Sunday his country saw Egypt as an important partner in stemming irregular migration across the Mediterranean and in bolstering its energy security.
Though Egypt has largely prevented departures of migrant boats from its own north coast since 2016, the number of Egyptian nationals crossing to Europe via Libya has risen sharply.
In 2022, 20,542 Egyptians disembarked in Italy, up from 1,264 in 2020 and the largest group by nationality, according to data published by Italy's interior ministry.
As part of efforts to tackle irregular migration, Italy was "ready to have more legal migrants, including those coming from Egypt", Foreign Minister Antonio Tajani said during a trip to Cairo.
He mentioned pilot projects to give migrants grants to study and train in Italy, though he did not give any numbers at a press conference with his Egyptian counterpart.
Tajani also called for a resolution of Libya's crisis that would lead to elections and a new constitution.
"The solution to the Libyan problem is also part of the solution of the illegal immigration problem," said Tajani.
Both Egypt and Italy have been deeply engaged in Libya, where migrant smugglers have found space to flourish amid conflict and political stalemate.
Italy and Europe were also looking to North Africa to meet their energy needs in the wake of the war in Ukraine, Tajani said.
Italy's Eni (ENI.MI) has a strong presence in Egyptian gas production. Tajani said Italy was working to strike more agreements with producer countries.
"I believe Egypt should become one of Italy's big partners in the Mediterranean. Italy aspires to be a big European energy hub and on this point there can be convergence with Egypt," he said.
The cases of Giulio Regeni, an Italian student found dead in Egypt in 2016, and Patrick Zaki, an Egyptian who was studying in Italy and is on trial under charges of spreading false news, were also addressed in talks with Egyptian President Abdel Fattah al-Sisi and Foreign Minister Sameh Shoukry, said Tajani.
"The problem was raised by the president, who told me it was the intention of Egypt to resolve the problems, and remove all the obstacles," he said.
A statement by Sisi's office made no mention of the cases.
(Editing by Andrew Heavens)
(([email protected]; +20-1001174410
)
pietro17elettra
Nonno pensionato
UPDATE 1-Egypt signs $1.5 bln financing agreement with ITFC - CNBC Arabia
22/01/2023 20:15 - RSF
(Adds details from Egypt's planning minister)
Jan 22 (Reuters) - Egypt has signed a $1.5 billion financing agreement with the International Islamic Trade Finance Corporation to fund its trading, including imports of energy products and essential commodities, CNBC Arabia wrote on Twitter, citing the head of the corporation.
Last year Egypt signed a similar agreement also worth $1.5 billion with the ITFC, which is headquartered in Jeddah in Saudi Arabia and often funds Egypt's commodities imports, including grains and petroleum.
Egypt's Planning Minister Hala al-Saeed said at a signing ceremony in Cairo that the financing cooperation portfolio between Egypt and the corporation totals $14.5 billion so far, according to a statement by the Planning Ministry posted on its account on Facebook.
She added that the latest signing comes within the framework agreement concluded between Egypt and the ITFC in 2018 that was renewed last year for an additional five years, with an amendment to the credit limit of the agreement from $3 to $6 billion.
Egypt recently agreed to a $3 billion IMF support package as it faces a currency crunch exacerbated by Russia's war in Ukraine, pushing up its bills for wheat and oil while dealing a blow to its tourist numbers from both nations. Tourism is a key source of hard currency for Egypt.
(Reporting by Nayera Abdallah; Editing by Hugh Lawson)
(([email protected])
22/01/2023 20:15 - RSF
(Adds details from Egypt's planning minister)
Jan 22 (Reuters) - Egypt has signed a $1.5 billion financing agreement with the International Islamic Trade Finance Corporation to fund its trading, including imports of energy products and essential commodities, CNBC Arabia wrote on Twitter, citing the head of the corporation.
Last year Egypt signed a similar agreement also worth $1.5 billion with the ITFC, which is headquartered in Jeddah in Saudi Arabia and often funds Egypt's commodities imports, including grains and petroleum.
Egypt's Planning Minister Hala al-Saeed said at a signing ceremony in Cairo that the financing cooperation portfolio between Egypt and the corporation totals $14.5 billion so far, according to a statement by the Planning Ministry posted on its account on Facebook.
She added that the latest signing comes within the framework agreement concluded between Egypt and the ITFC in 2018 that was renewed last year for an additional five years, with an amendment to the credit limit of the agreement from $3 to $6 billion.
Egypt recently agreed to a $3 billion IMF support package as it faces a currency crunch exacerbated by Russia's war in Ukraine, pushing up its bills for wheat and oil while dealing a blow to its tourist numbers from both nations. Tourism is a key source of hard currency for Egypt.
(Reporting by Nayera Abdallah; Editing by Hugh Lawson)
(([email protected]
)
pietro17elettra
Nonno pensionato
First Boxing Club opens doors to women in Gaza
Oggi 10:04 - RSF
By Nidal al-Mughrabi
GAZA, Jan 23 (Reuters) - In Gaza's only boxing club for girls, 15-year-old Farah Abu Al-Qomsan is practising her moves, trading jabs and punches with the other girls training with coach Osama Ayoub at the Palestine Boxing Centre.
Since taking to the sport at the age of nine, Farah has found a release from the daily stresses of life in Gaza, a narrow coastal strip where some 2.3 million Palestinians live blockaded by both Israel and neighbouring Egypt.
"We used to train in a small garage. Now we train according to the full rules and release bad energy," the 15-year-old girl, at the territory's first women-only boxing center.
Six years ago, Ayoub, started with two girls. As more joined, they moved out of the garage and began training on the beach or in rented spaces before moving into the new club building.
"The girls are ready. I trained them hard for five years," said Ayoub. "We are setting an example."
Now around 40 girls train in the centre with its full-size boxing ring, training equipment and posters of boxing heroes such as Mike Tyson on the walls, defying expectations in a region where boxing has traditionally been a sport for men.
"Some people used to tell me 'Why boxing, what are you going to benefit from it, go and learn something girly'," Farah said.
"I benefit a lot from boxing and today my ambition is to represent my Palestinian people and take part in world championships."
(Writing by Nidal Almughrabi, Editing by Timothy Heritage)
(([email protected]; 00970599401958; Reuters Messaging: [email protected]))
pietro17elettra
Nonno pensionato
Egypt's Sisi defends mega-projects with economy under strain
23/01/2023 19:39 - RSF
CAIRO, Jan 23 (Reuters) - Egyptian President Abdel Fattah al-Sisi on Monday defended mega-projects undertaken since he took power, saying they were not to blame for economic turmoil that has seen the currency plummet and inflation accelerate.
Since Sisi became president in 2014, Egypt has embarked on an infrastructure splurge spearheaded by the military that has included the expansion of the Suez Canal, the construction of a new capital in the desert, and extensive road building.
Critics have questioned why the government poured tens of billions of dollars into the projects at a time when Egypt has struggled to contain its debt burden and provide public services such as health and education to a growing population.
The government in early January issued an order for the postponement of projects with a large foreign currency component, and cuts to non-essential spending.
In a Nov. 30 letter of intent to secure a $3 billion financial rescue package from the International Monetary Fund, Egypt pledged that "spending on public projects including national projects would be slowed down and adjusted to limit pressures on the foreign exchange market and inflation."
In comments to mark Egypt's annual police day, Sisi said, "I will speak about what's being circulated, that the national projects are the cause of the crisis we're currently in."
"Could we not have developed the Suez Canal ... and after seven years its income would have reached $8 billion?"
The Suez Canal underwent a first expansion in 2015 and is now being expanded again. Sisi also made reference to investments in the power grid early in his rule which resulted in a large power surplus.
"While we had a power shortage, could we have not developed the electricity infrastructure to cope with the demand and also to cope with the development we were aiming for?" he said.
"There wasn't anything unimportant that we worked on, or a miscalculation that we made."
Police day officially falls on Jan. 25, which is also the anniversary of the start of the Arab Spring uprising that toppled former President Hosni Mubarak in 2011.
Sisi led the overthrow of Egypt's first democratically elected leader, Mohamed Mursi, two years later.
He has blamed the 2011 uprising for destabilising Egypt and hampering its economic development, and frequently blames recent economic turmoil on the impacts of Russia's war on Ukraine and other global factors.
(Reporting by Mohamed Waly, Mariam Rizk and Patrick Werr; Writing by Aidan Lewis; editing by Grant McCool)
(([email protected]; +20-1001174410)
23/01/2023 19:39 - RSF
CAIRO, Jan 23 (Reuters) - Egyptian President Abdel Fattah al-Sisi on Monday defended mega-projects undertaken since he took power, saying they were not to blame for economic turmoil that has seen the currency plummet and inflation accelerate.
Since Sisi became president in 2014, Egypt has embarked on an infrastructure splurge spearheaded by the military that has included the expansion of the Suez Canal, the construction of a new capital in the desert, and extensive road building.
Critics have questioned why the government poured tens of billions of dollars into the projects at a time when Egypt has struggled to contain its debt burden and provide public services such as health and education to a growing population.
The government in early January issued an order for the postponement of projects with a large foreign currency component, and cuts to non-essential spending.
In a Nov. 30 letter of intent to secure a $3 billion financial rescue package from the International Monetary Fund, Egypt pledged that "spending on public projects including national projects would be slowed down and adjusted to limit pressures on the foreign exchange market and inflation."
In comments to mark Egypt's annual police day, Sisi said, "I will speak about what's being circulated, that the national projects are the cause of the crisis we're currently in."
"Could we not have developed the Suez Canal ... and after seven years its income would have reached $8 billion?"
The Suez Canal underwent a first expansion in 2015 and is now being expanded again. Sisi also made reference to investments in the power grid early in his rule which resulted in a large power surplus.
"While we had a power shortage, could we have not developed the electricity infrastructure to cope with the demand and also to cope with the development we were aiming for?" he said.
"There wasn't anything unimportant that we worked on, or a miscalculation that we made."
Police day officially falls on Jan. 25, which is also the anniversary of the start of the Arab Spring uprising that toppled former President Hosni Mubarak in 2011.
Sisi led the overthrow of Egypt's first democratically elected leader, Mohamed Mursi, two years later.
He has blamed the 2011 uprising for destabilising Egypt and hampering its economic development, and frequently blames recent economic turmoil on the impacts of Russia's war on Ukraine and other global factors.
(Reporting by Mohamed Waly, Mariam Rizk and Patrick Werr; Writing by Aidan Lewis; editing by Grant McCool)
(([email protected]; +20-1001174410
)
pietro17elettra
Nonno pensionato
Egypt's Sisi heads to India amid investment push
Oggi 10:05 - RSF
CAIRO, Jan 24 (Reuters) - Egyptian President Abdel Fattah al-Sisi begins a visit to India on Wednesday where he will meet business leaders and be a guest of honour at India's Jan. 26 Republic Day.
The trip will include discussions on strengthening economic relations between the two countries and reviewing opportunities for Indian investment in Egypt, a statement from the Egyptian presidency said.
Egypt is trying to drum up foreign investment as it tries to manage a dollar shortage that has led to a sharp depreciation of the Egyptian pound.
Last year it sought help from energy-rich Gulf allies and the International Monetary Fund after the economic fallout from the war in Ukraine exacerbated its underlying challenges.
Cairo has also been seeking to forge political and trade ties beyond its traditional alliances with the United States and European powers, including in sub-Saharan Africa and Asia.
(Reporting by Aidan Lewis; Editing by Christina Fincher)
(([email protected]; +20-1001174410)
Oggi 10:05 - RSF
CAIRO, Jan 24 (Reuters) - Egyptian President Abdel Fattah al-Sisi begins a visit to India on Wednesday where he will meet business leaders and be a guest of honour at India's Jan. 26 Republic Day.
The trip will include discussions on strengthening economic relations between the two countries and reviewing opportunities for Indian investment in Egypt, a statement from the Egyptian presidency said.
Egypt is trying to drum up foreign investment as it tries to manage a dollar shortage that has led to a sharp depreciation of the Egyptian pound.
Last year it sought help from energy-rich Gulf allies and the International Monetary Fund after the economic fallout from the war in Ukraine exacerbated its underlying challenges.
Cairo has also been seeking to forge political and trade ties beyond its traditional alliances with the United States and European powers, including in sub-Saharan Africa and Asia.
(Reporting by Aidan Lewis; Editing by Christina Fincher)
(([email protected]; +20-1001174410
)fedro10
è la somma che fa il totale...
era un po che non li guardavo
