Africa in April 2024

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  1. Egypt’s Foreign Asset Deficit Shrinks Following Key Financial Deal Egypt’s foreign asset deficit was reduced by 217.1 billion Egyptian pounds ($7.04 billion) to 679 billion pounds in February, following a $5 billion installment from a $24 billion deal related to the Ras El Hekma project with the UAE, announced by Prime Minister Mostafa Madbouly. The impact of an $8 billion IMF support program signed on March 6 is not yet reflected in the data. The Central Bank’s reliance on foreign assets has been crucial for supporting the Egyptian currency, which adjusted to slightly below 50 pounds per dollar in March.


  1. Egypt Seeks €2 Billion Grant for Electrical Interconnection with Greece and Italy Egyptian government sources say Cairo is prioritizing electrical connection projects with Italy and Greece and is in consultations with the European Union for a €2 billion grant to fund them. These projects aim to link Egypt’s power grid with Europe’s, supplying clean energy to Europe. Discussions with EU officials started months ago, with notable EU interest due to the projects’ reliance on clean energy and carbon emission reduction. Electrical interconnection projects are among the top priorities receiving EU support.
  2. Egypt’s External Debt Rises Despite Increased Foreign Income Egypt’s Ministry of Planning and Economic Development reported a 2.1% increase in external debt in Q2 of the current fiscal year, totaling $168.03 billion. The debt increased by $3.512 billion within three months, reaching $168.034 billion by December 2023. Economist Mamdouh Elweli notes Egypt’s external debt tripled in ten and a half years. Despite rising debt, Egypt’s foreign income totaled over $1.293 trillion in the past decade, averaging $129.284 billion annually.


  1. Egyptian Pound Loses Ground Against the Dollar The dominance of the dollar imposes pressure on the Egyptian pound, which has been sliding in value for nearly eight years. Recent increases in the dollar rate signal fresh danger amid escalating tensions between Iran and Israel, adding further strain to Egypt’s currency. Economists anticipate further depreciation of the pound against major currencies and say that rising demand for dollars, coupled with delayed dollar inflows, underscores the urgent need for proactive measures to stabilize Egypt’s economy.
  2. Paris Conference: Over €2 Billion Pledged for Sudan International leaders gathered in Paris Monday pledged humanitarian aid exceeding €2 billion to support civilians in conflict-stricken Sudan. French President Emmanuel Macron announced the commitment. Despite ambitious pledges, the total falls short of the €3.8 billion the UN estimates is needed. The conference aimed to address the dire humanitarian crisis and find pathways to peace, urging coordinated global efforts to alleviate Sudan’s suffering.


  1. Russia’s Africa Corps Will Deploy to Eastern Libya Ahead of the anticipated deployment of Russia’s Africa Corps in eastern Libya, Egypt’s President Abdel Fattah el-Sisi and the head of Russian intelligence, Sergei Naryshkin, discussed counter-terrorism cooperation in Libya. The meeting focused on preventing extremist groups from exploiting the political deadlock in Libya to regain activity. This coordination reflects broader concerns about maintaining regional stability and curbing the influence of extremist factions in North Africa, where Egypt and Russia share aligned interests against terrorism and regional instability.


  1. Egypt Expects $1 Billion from World Bank to Support Budget Egypt anticipates receiving about $1 billion from the World Bank to support its budget in early H2 2024, as per Rania Al-Mashat, Minister of International Cooperation. The funding is part of a $6 billion aid plan over three years aimed at bolstering both public and private sectors. Al-Mashat, who also serves as Egypt’s Governor at the World Bank, revealed that this includes $500 million annually designated for budget support under the “Development Policy Support” program, with an additional $200 million specifically aimed at enhancing social safety nets under the “Takaful and Karama” initiative.
  2. Egypt to Receive $20 Billion from Ras al-Hikma Project Egypt will receive approximately $20 billion from the Ras Al-Hikma project and anticipates funds from the World Bank, the EU, and the IMF totaling nearly $2 billion by the end of June, according to Finance Minister Mohamed Maait. Concurrently, Egypt is preparing to launch a $1.1 billion program for implementing its state ownership policy, aiming to optimize the management and privatization of state assets.
  3. Egypt Readies for Potential Rafah Invasion Scenario Egyptian sources report full readiness along the 14-kilometer Gaza border in anticipation of a possible Israeli incursion into Rafah, labeled as Hamas’s last stronghold by Israeli Prime Minister Netanyahu. This heightened alert, initiated since last Monday, aligns with preparations for a military operation in southern Gaza, prompting Egypt to enhance its border forces and coordination for potential humanitarian impacts.


  1. Egypt Expects $400 Million from UK to Bolster Budget Egypt anticipates receiving $400 million from the United Kingdom over the next two years to support its budget as part of a broader $6 billion aid package from the World Bank announced earlier. Egyptian Minister of International Cooperation Rania Al-Mashat indicated that these funds, intended to alleviate the nation’s economic challenges, would accompany budget financing from the World Bank. The first installments are expected by July, contributing to Egypt’s comprehensive international support to revitalize its economy.
  2. Egypt Will Suspend LNG Exports as Summer Begins Egypt’s Ministry of Petroleum spokesperson, Hamdi Abdel Aziz, announced that the country will halt LNG exports starting May, citing increased domestic consumption during the hot summer months rather than power supply issues. This move, which was implemented last May and reversed post-summer, aligns with past practices to accommodate rising local energy needs. Abdel Aziz emphasized that this suspension was planned and not related to any contractual failures, highlighting Egypt’s strategic adjustments to manage its energy resources amid escalating temperatures and consumption.


  1. Egypt Denies Israeli Accusation that Cairo Tolerates Weapons Smuggling into Gaza Egypt’s General Intelligence Directorate chief, Diaa Rashwan, rebutted recent Israeli claims of weapons smuggling to Gaza, saying that Egypt asserts full sovereignty over its territory and controls its borders with Gaza and Israel. He said Egypt has destroyed over 1500 tunnels and strengthened the Gaza border wall. 
  2. Tanzanian-Flagged Vessel Rescued from Sinking in Suez Canal Egypt’s Suez Canal Authority announced the successful rescue of the Tanzanian-flagged cargo ship LABATROSfrom sinking before it crossed the canal. The 12-member crew is safe, with ongoing assessments of the ship’s condition. The authority’s Port Said office received distress signals, prompting immediate rescue efforts involving tugboats and a rescue vessel. Teams are inspecting the ship for damage and determining the cause of the incident. The vessel, 94 meters long with a 15-meter beam and a 6-meter draft, was laden with 3,000 tons, bound from Lebanon to Egypt’s Adabiya Port.


  1. Egypt Denies its Supports Israeli Plans for Rafah Offensive Egypt has officially denied American media claims of military discussions with Israel about invading Rafah, a city in the southern Gaza Strip. Egyptian authorities emphasize their staunch opposition to any invasion, which they predict would result in significant human losses and extensive destruction, echoing the severe impacts already witnessed in Gaza since Israel began its operations there last October. Egypt has reiterated warnings to Israel about the dire consequences of an attack on Rafah and continues to advocate for a ceasefire, humanitarian aid, and medical support for Gaza.


  1. Egypt Approves Free Zone and Tourist Port in Ras Al-Hikma The Egyptian Cabinet has approved the establishment of a specialized free zone and an international tourist port in Ras Al-Hikma, west of Alexandria. Named the “Ras Al-Hikma Urban Development Company,” the project was initiated in collaboration with Abu Dhabi Holding with a development contract worth $35 billion signed in February. Egypt’s government also formed a ministerial committee to expedite the project, which includes industrial, commercial, and financial zones, enhancing the country’s economic prospects.
  2. Egypt Warns of Tensions if Israeli Pressure at Gaza Border Continues Egypt’s Foreign Ministry spokesman, Ahmed Abu Zeid, expressed concerns over attempts to increase pressure on Palestinians near the Egyptian border, warning that such actions could strain relations with Israel. In a televised interview, Abu Zeid emphasized mechanisms in place to address any breaches of the 1979 peace agreement between Egypt and Israel. He also highlighted international opposition to military operations in Rafah, indicating that the area could not withstand further escalation or humanitarian suffering.
  3. Egyptian Debt Issuance Surges to $71.6 Billion This Year Egypt has issued $71.6 billion in debt instruments since the start of 2024, marking a 57% increase from last year, according to Bloomberg. This surge includes $69.2 billion in local currency bonds, the highest level since at least 2013. Egypt’s finance minister, Mohamed Maait, confirmed the country’s target to raise the average maturity of its debt to between 4.5 to 5 years. The rise in debt issuance aligns with Egypt’s efforts to meet a substantial financing need of 2.14 trillion Egyptian pounds for the fiscal year.


  1. Egyptian President Sisi to Visit Turkey Next Week Egyptian President Abdel Fattah el-Sisi is set to visit Turkey next week, aiming to bolster bilateral relations and address Gaza, Eastern Mediterranean, and other regional issues. The visit follows Turkish President Erdogan’s invitation during his February Cairo trip, signaling continued reconciliation after a decade-long rift. Trade between the two countries, valued at $6.6 billion in 2023, is poised to rise with Egypt targeting $15 billion in bilateral trade in the coming years.
  2. Egyptian Delegation Heads to Israel Seeking Gaza Ceasefire Israel’s Military Cabinet has authorized negotiations with an Egyptian delegation to discuss a potential Gaza truce and the release of hostages. The talks, which aim to increase flexibility in negotiations with Hamas, are part of broader efforts led by Egypt to de-escalate tensions and establish a truce in Gaza. This comes as Qatar’s mediation role is diminishing, with Cairo stepping up to try to prevent a potential Israeli military operation in Rafah, a key Hamas stronghold. 
  3. Egypt Activates Emergency Plan to Respond to Potential Israeli Incursion in Rafah Egyptian authorities are initiating an emergency plan starting next Tuesday in preparation for a possible Israeli invasion of Rafah. This plan involves heightened readiness across several governorates, including the cancellation of vacations for medical and foreign affairs personnel to handle potential emergencies. This follows a high-level meeting in Cairo involving Israeli and Egyptian officials, where ongoing concerns about the operation were discussed. As these preparations get underway, the U.S. is attempting to revive a prisoner deal to mitigate the operation’s impact. Meanwhile, Egyptian officials have been clear that they have not been part of planning the invasion, stressing the potential humanitarian consequences and rejecting any involvement.


  1. Egypt Upgraded in International Finance Ranking The World Bank’s International Finance Corporation has upgraded Egypt’s rating to “advanced application” for sustainable finance. This recognition follows substantial efforts by the Central Bank of Egypt to boost sustainable financing in the banking sector. Key initiatives included issuing guidelines for sustainable financing, enhancing employee capabilities, and aligning regulatory instructions with international standards. These efforts aimed to prepare the banking sector for greater sustainability and to address the challenges and opportunities in sustainable financing.
  2. Islamic Development Bank’s Financing in Egypt Reaches $22 Billion The Islamic Development Bank’s financing portfolio in Egypt has reached $22 billion, spanning 395 projects in various sectors such as electricity, infrastructure, and transportation. Hala Al-Saeed, Egypt’s Minister of Planning and Economic Development, highlighted this during the Bank Group’s meetings in Riyadh. The financing also supports Egyptian export growth, which has increased by 20% to $52 billion. Additional efforts include evaluating government headquarters in downtown for competitive offerings, with potential conversion into hotel spaces and a creativity center.


  1. Israel Decides Against Sending Delegation to Cairo for Ceasefire Talks Israel has opted not to send its delegation to Cairo for ceasefire negotiations in Gaza until receiving a response from Hamas regarding Egyptian proposals for a prisoner swap deal. A senior Israeli political official stated that they have decided against the Cairo trip. Tel Aviv will await Hamas’ response on the new deal proposals until next Wednesday before deciding on further negotiations. The nature of the responses awaited from Hamas by Tel Aviv has not been specified. Meanwhile, preparations for a potential military operation in Rafah are underway if new negotiations with Hamas fail.

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