Egypt in January 2023

05 January 2023

Egypt’s Economic Crisis Deepens.

Egypt is experiencing runaway inflation, rising interest rates, and an economic crisis that has placed the entire country on edge.  Egypt’s currency lost more than one-third of its value during 2022, and the currency collapse has created a severe shortage of hard foreign currency with which to fund foreign exchange.  As a result, billions of dollars worth of goods are stacking up at Egyptian ports for lack of dollars to pay for the shipments.  Egypt’s prime minister said the government had worked with the Egyptian Central Bank to release $5 billion to reduce the port backlog since late November, but goods worth $9.5 billion are still stranded in the ports awaiting currency for foreign exchange.  A net importer of fuel and food commodities, Egypt has suffered an economic shock as a result of the Russian invasion of Ukraine, which has disrupted grain and energy deliveries that Egypt depends upon.

ISIS Claims Terror Attack in Ismailia.

Egypt’s economic troubles have been joined by a potential increase in terrorism.  On 30 December an armed group attacked a security checkpoint in the city of Ismailia, near the Suez Canal. The attackers used machine guns to kill three police officers and wound at least 12 others in the first terrorist attack to take place outside the Sinai Peninsula in three years.  The following day, 31 December, ISIS claimed responsibility for the attack in a statement issued by its media arm, Amaq.

06 January 2023

1. Egyptian Pound Continues its Decline to 27 Pounds Per Dollar (Sky News Arabia). On Thursday, the exchange rate of the Egyptian pound continued its downward path, retreating to the level of 27 pounds per dollar, which is its lowest level ever in the official market. Exchange rate flexibility was a key demand of the International Monetary Fund, which approved a 46-month bailout package worth $3 billion for Egypt in October. Egypt had been seeking the loan since March, after the economic fallout from the war in Ukraine exacerbated a foreign exchange shortage, causing a sharp slowdown in imports and a backlog of goods at ports.

9 January 2023

1. Egypt opens 2023 in economic uncertainty, with its currency sliding against the dollar and external debt growing. After several years of managing a peg of 16 pounds to the U.S. dollar, the Egyptian government has been forced in recent weeks to let the market set the value of the pound, and the currency now trades at more than 27 to the dollar. The pound’s rapid devaluation has caused prices of imports to spike and created a shortage of dollars with which to pay for shipments that are stuck in Egyptian ports. In December, Egypt turned to the IMF for its fourth loan in six years after agreeing to let the pound’s value be determined by market forces, but the government will still struggle to find means to pay the $45 billion in external debt that will come due this year, out of a total external debt that was estimated at more than $155 as of September 2022. Addressing the spike in prices of daily needs such as dairy products, bread, and vegetables, President Sisi gave a speech last Friday urging Egyptians “not to worry or be afraid” and explaining that the country’s current economic woes are due strictly to the effects of Russia’s war on Ukraine. Separately, though, the news outlet Atalayar assessed that Egypt and other Arab countries may be benefiting from EU sanctions on Russia, which is allowing Egyptian firms to take some of Russia’s market share. Atalyar reported that the volume of exports grew by 171% over the last year, resulting in a marginal profit of 5 billion euros in 2022.

10 January 2023

1. To Curb the Steady Collapse of the Pound, Egypt Announces “Dollar Austerity” (Al Nahar Al Arabi). Among the procedures included in the decision:  postponing the implementation of any new project that has not been implemented and has a dollar component, and requiring state entities to obtain the approval of the Ministry of Finance and the Central Bank before allocating foreign liquidity, in addition to rationalizing all travel outside the country except for extreme necessity, and after approval.

11 January 2023

1. Egypt to Receive Second Tranche of IMF’s $3 Billion Loan by End of March (Ahram Online). Egypt is set to receive the second tranche of the $3 billion loan it secured from the International Monetary Fund (IMF), estimated at around $347 million, by the end of March, following the completion of the first review of the loan programme, the IMF Mission Chief for Egypt, Middle East and Central Asia Department Ivanna Vladkova Hollar said on Tuesday.

12 January 2023

1. Egyptian Pound Continues Unprecedented Fall Against the Dollar (Ahram Online). In a dramatic performance on Wednesday, the Egyptian pound hit its lowest-ever price of EGP 31 against the US dollar, losing over 100 percent [sic] of its value since March before slowing down to EGP 29.63 at the Central Bank of Egypt (CBE) and major banks.

13 January 2023

1. Saudi Arabia and Egypt Stress the Need for Iran to Avoid Destabilizing Activities (Asharq Al Awsat). Meeting in Riyadh, the two countries’ foreign ministers stressed the importance of Arab security and the need to address any threats to the region’s waterways.

17 January 2023

1. Cairo Hosts Regional Summits. This week Cairo is hosting an Egyptian-Jordanian-Palestinian summit to discuss peace efforts and coordinate positions on regional policy. The summit comes just after Egypt also hosted meetings between the head of the Libyan Presidential Council, Muhammad Al-Munfi, retired General Haftar, and Speaker of the Libyan Parliament Aqila Saleh. The tripartite meeting is meant to establish a roadmap to new Libyan elections that would satisfy all Libyan political parties. 
2. Egypt’s Currency and Economic Crises Worsen. Egypt’s currency dropped more than 20 percent in just days to an all-time low of 32 pounds to the dollar before stabilizing at just under 30 pounds per dollar later in the week. Egypt’s currency has lost more than half its value since March 2022, with the drop accelerating in recent weeks as Egypt has been forced to release billions from its foreign currency reserves to address a severe dollar shortage in Egyptian markets. Prices of imports to Egypt have skyrocketed as a result, plunging the country into its deepest economic crisis in years.
3. Musk Touts Egyptian Tourist Site. Finally, the Egyptian media highlighted Elon Musk’s tweet over the weekend about Egypt’s “Dendera” temple, an ancient historical site dating from the Greco-Roman Ptolemaic era that took 200 years to build. The temple is famous for the astronomical scenes depicted on the ceiling as well as the many scenes depicting Egyptian kings and emperors. After multiple years in which Egypt’s tourism industry suffered from pandemic lockdowns and travel restrictions, Egyptian officials and celebrities were ecstatic, inviting Musk to visit Egypt and hailing the Twitter owner’s tweet as the best recent advertisement for Egyptian tourism.
4. Tunisians Protest Against President Said. Thousands of Tunisians organized protests against President Kais Said in Tunis on the 12th anniversary of the overthrow of the late president Zine El Abidine Ben Ali. The Arabic news outlet Elaph reported that “Avenue Habib Bourguiba, the traditional site of major demonstrations, was packed with thousands of protesters waving Tunisian flags, chanting similar chants to those heard against Ben Ali 12 years ago.” For his part, President Said said that his country is at war with corruption and with those he described as traitors and agents.

January 16, 2023

Cairo Hosts Regional Summits

This week Cairo is hosting an Egyptian-Jordanian-Palestinian summit to discuss peace efforts and coordinate positions on regional policy. The summit comes just after Egypt also hosted meetings between the head of the Libyan Presidential Council, Muhammad Al-Munfi, retired General Haftar, and Speaker of the Libyan Parliament Aqila Saleh. The tripartite meeting is meant to establish a roadmap to new Libyan elections that would satisfy all Libyan political parties.

Egypt’s Currency and Economic Crises Worsen

Egypt’s currency dropped more than 20 percent in just days to an all-time low of 32 pounds to the dollar before stabilizing at just under 30 pounds per dollar later in the week. Egypt’s currency has lost more than half its value since March 2022, with the drop accelerating in recent weeks as Egypt has been forced to release billions from its foreign currency reserves to address a severe dollar shortage in Egyptian markets. Prices of imports to Egypt have skyrocketed as a result, plunging the country into its deepest economic crisis in years.

Musk Touts Egyptian Tourist Site

Finally, the Egyptian media highlighted Elon Musk’s tweet over the weekend about Egypt’s “Dendera” temple, an ancient historical site dating from the Greco-Roman Ptolemaic era that took 200 years to build. The temple is famous for the astronomical scenes depicted on the ceiling as well as the many scenes depicting Egyptian kings and emperors. After multiple years in which Egypt’s tourism industry suffered from pandemic lockdowns and travel restrictions, Egyptian officials and celebrities were ecstatic, inviting Musk to visit Egypt and hailing the Twitter owner’s tweet as the best recent advertisement for Egyptian tourism.

TUNISIA

Tunisians Protest Against President Said

Thousands of Tunisians organized protests against President Kais Said in Tunis on the 12th anniversary of the overthrow of the late president Zine El Abidine Ben Ali. The Arabic news outlet Elaph reported that “Avenue Habib Bourguiba, the traditional site of major demonstrations, was packed with thousands of protesters waving Tunisian flags, chanting similar chants to those heard against Ben Ali 12 years ago.” For his part, President Said said that his country is at war with corruption and with those he described as traitors and agents.

17 January 2023

1. Egypt, China Agree to Develop Strategic Partnership (Asharq Al-Awsat). Egypt and China stressed their keenness to develop a comprehensive strategic partnership that brings them together in various fields. Egyptian President Abdel Fattah al-Sisi received Sunday Chinese Foreign Minister Qin Gang, who is on an African tour that includes five countries.

18 January 2023

1. Egypt Suffers Deficit in its Water Resources Amounting to 35 Billion Cubic Meters (Asharq Al-awsat). Hani Sweilem, Egyptian Minister of Irrigation and Water Resources, said that his country has a deficit of 35 billion cubic meters in available water resources, at a time when Ethiopia is preparing for a fourth filling of the “Renaissance Dam” reservoir on the Nile River, which raises tensions with the downstream countries (Egypt and Sudan).

20 January 2023

1. Russian Central Bank Includes the Egyptian Pound in Currency Exchange Rates (Al Arabiya). This comes in light of the decline in the price of the US dollar against the Egyptian pound, after successive increases that coincided with the liberalization of the exchange rate. The new decision will allow Egypt and Russia to use the ruble and the pound in commercial transactions between the two countries, instead of the dollar, as the volume of trade exchange between Egypt and Russia is estimated at about $4.7 billion for the year 2021.
2. Columbia University Names Egypt-born Nemat Shafik as First Woman President (Al Arabiya). Columbia University named former Bank of England Deputy Governor and current London School of Economics President Nemat “Minouche” Shafik as its president, marking the first time a woman has been named to lead the renowned American educational institution.

23 January 2023

The Libyan government of Abdul Hamid Dhabiba hosted a meeting of Arab foreign ministers in Tripoli this week, sparking surprise by the rival government of Fathi Bashagha. Though boycotted by Egypt, Saudi Arabia, and the President of the Arab League, the meeting was attended by 3 Arab foreign ministers, the Tunisian, Algerian, and Qatari, while Oman, Sudan, Mauritania, Comoros, Somalia and Palestine sent delegates.

During the conference, Dhabiba’s foreign affairs minister Ms. Najlaa Al Mankoush said Dhabiba’s National Unity Government was committed to holding elections, ending the transitional stage, and preventing the country from sliding into chaos.

In Egypt, President Sisi hosted Antonio Tajani, Deputy Prime Minister of Foreign Affairs of Italy this Sunday. The Italian Foreign Minister pointed out that this visit represents a clear message of the strength of historical relations between the two countries, and affirms the desire of the Italian government to consolidate and advance these relations during the next stage.

Egypt and Sudan held Irrigation and Water Resources ministerial meetings this week to discuss and develop the work of the permanent Egyptian-Sudanese Technical Authority for Nile Water, one of the oldest mechanisms of cooperation between the two countries. The two sides emphasized the necessity of “sincere cooperation with the Nile Basin countries.”

Hizballah leader Hasan Nasrallah in Lebanon lashed out at Saudi Arabia and Egypt this week. He ridiculed the current economic hardships in Egypt, arguing that Egypt was the first country to have signed a peace treaty with Israel but is now abandoned by America. Nasrallah added that the United States does not want a strong state in the region, but rather wants its people to keep “running after a loaf of bread.” The Egyptian Ministry of Foreign Affairs posted a statement on its official Facebook page describing Nasarallah’s remarks as “absurd.”

24 January 2023

1. CIA Director William Burns Visits Cairo (Al Sharq Al Awsat). According to the official spokesman for the Egyptian presidency, Sisi welcomed the American official, stressing the strength of the Egyptian-American relations and the importance that Egypt attaches to the firm cooperation between the two countries in various fields, especially at the security and intelligence levels, and to support efforts to restore stability in the Middle East in light of the challenges it is witnessing.

27 January 2023

1. Cairo and New Delhi to Elevate Bilateral Relations to Strategic Partnership (Ahram Online). Egypt’s President Abdel-Fattah El-Sisi and India’s Prime Minister Narendra Modi decided to upgrade the relations between both countries – especially political relations and relations in the fields of security, defense, energy, and economy – to the level of Strategic Partnership. 
2. US Dollar Price Stabilizes in Egypt on Thursday (Egypt Independent). The price of the dollar in banks across the country has recorded its lowest price at 29.84 to the dollar.

31 January 2023

1. US-Egyptian Consensus:  Prioritize the Economy and Achieving Stability (Al Nahar). Egyptian Foreign Minister Sameh Shoukry pointed out, in a joint press conference with his American counterpart Antony Blinken in Cairo, that there is a great agreement between the two countries on various issues, as the talks included the Renaissance Dam, Libya and Sudan, stressing that “Cairo is counting on cooperation with Washington to achieve stability in the Middle East region”…In turn, Blinken indicated that “the priority is the economy in relations between Egypt and the United States,” pointing out that the war in Ukraine has greatly affected the Egyptian people.
2. Russian-Egyptian Meeting to Discuss Politics and Trade (Sky News Arabia). On Monday evening, Egyptian Foreign Minister Sameh Shoukry will head to Moscow on a bilateral visit aimed at following up the course of bilateral relations between the two countries and discussing the repercussions of the war in Ukraine. Shoukry ‘s visit to Russia comes a few hours after the talks he held with his American counterpart, Antony Blinken, in Cairo, which focused mainly on ways to calm the Palestinian territories after the recent wave of escalation, in addition to other issues, including the Renaissance Dam and the situation in Libya and Sudan.