Egypt in March 2023

2 March 2023

1. Net Foreign Assets of Egyptian Banking Sector Fell by $5.2 Billion in January (The New Arab). According to Central Bank data, the net foreign assets of Egypt’s banking sector decreased by 160.2 billion Egyptian pounds in January, likely due to the maturity of debts and liquidation of work importers. The net foreign assets of the sector reached negative 654.43 billion pounds, down from negative 494.3 billion in December, resulting in a $5.3 billion decline. This decrease is partly due to foreign debt maturities and import clearing before Ramadan, according to Allen Sandeep of Naeem Brokerage.
2. Egypt to Restore Daylight Savings Time After a Decade (The National). Egypt’s Cabinet on Wednesday decided to restore daylight savings time nearly a decade after it had stopped the practice. A statement said Egyptians will put their clocks forward by one hour on the last Friday of April and put them back by the same time at the end of the last Thursday in October. “The decision was taken in view of the economic conditions and variables the world is witnessing and to save energy,” said the statement. Egypt has over the past year strived to save energy in view of higher costs caused by the Russia-Ukraine war and to make more natural gas available to export to Europe.

3 March 2023

1. Egypt Implements Wage and Pension Increases, but Offsets Benefits with Fuel Price Hike (Asharq News). Egyptian President Abdel Fattah El-Sisi has ordered an increase in the minimum wage for state workers and a 15% raise in pensions for retirees…The minimum wage will be raised according to job grade, with the lowest increase being 1,000 pounds per month. The minimum income for employees of the sixth grade and its equivalent is 3,500 pounds per month, and for holders of a PhD degree, it is 7,000 pounds per month. Meanwhile, the Egyptian Ministry of Petroleum announced a hike in the prices of gasoline products due to fluctuations in Brent crude prices and the exchange rate of the pound against the dollar.

6 March 2023

1. Muslim Brotherhood Attempts to Rebuild Itself in Egypt (Al Hadath). The Muslim Brotherhood is attempting to rebuild itself following a government crackdown and their forced removal from power in Egypt in 2013. Imprisonment of its leaders and the escape of senior figures to foreign countries has led the group to turn to new, youthful leaders who reside in the West and hold foreign nationalities. However, rebuilding the organization involves adopting modern, liberal features consistent with human rights values and presenting as a peaceful opposition force. The Brotherhood’s success in rebranding and rebuilding itself could impact the political landscape of the region.
2. Scarcity of Foreign Currency Frightens Egyptians and Raises Questions About Feasibility of Devaluing the Pound (Al Hurra). The price of chicken in Egypt has risen to 205 pounds due to a shortage of foreign currency, causing importers to struggle to purchase fodder needed for the poultry sector…[I]t is clear that the burden of debt service Cairo must pay in 2022-2023 is about $42 billion, while exports until last October amounted to about 37 billion dollars and imports amounted to 86 billion dollars until November, creating a large deficit. This situation is caused by global price inflation, repeated declines of the pound, and a shortage of dollars with import restrictions that have delayed goods in ports.

9 March 2023

1. Amidst Dollar Crisis, Egypt Offers Citizenship for Foreign Investors (Al Hurra). On Wednesday, the Egyptian government decided to provide facilities for granting Egyptian nationality to foreign investors in exchange for purchasing facilities, investing in companies, or depositing dollar sums of money. The decision is part of an effort to attract more hard currency into the country…One of the most significant new facilities is the reduction in the required amount to purchase a property owned by the state or a public legal entity in exchange for obtaining citizenship. The amount has been decreased from $500,000 to $300,000, and there is no longer a requirement to transfer the amount from abroad. Instead, it can be paid within the country as long as it has entered through a customs port, with supporting evidence.

10 March 2023

1. The Renaissance Dam:  New Satellite Images and an Escalating Debate Between Egypt and Ethiopia (Al Jazeera) Tensions have risen between Cairo and Addis Ababa once again over the Grand Ethiopian Renaissance Dam, coinciding with the detection of satellite images showing equipment for a new filling of the dam…The images revealed the ongoing construction and ramping of the Renaissance Dam in preparation for its fourth filling…This response follows the recent statements of Egyptian Foreign Minister Sameh Shoukry, in which he urged Ethiopia to show responsibility and warned that Egypt would defend its interests. Shoukry emphasized the danger of Ethiopia’s unilateral actions on the shared river basin, which he sees as a significant issue of advanced priority and with fateful consequences for Egypt’s national security.

2. Inflation in Egypt Jumped to 31.9% in February, Exceeding Expectations (Al Sharq Business). Core inflation in Egypt jumps to 40.26% in February, marking an all-time high; The real interest rate in Egypt reaches negative 15.65% after the latest inflation figures; Expectations that the Central Bank of Egypt will raise interest rates by 200 basis points. The rise in food prices and the depreciation of the pound against the dollar have led to an acceleration of inflation in Egyptian cities during February. This has resulted in the highest inflation rate in over five years, surpassing analysts’ expectations. The continuous rise in prices of goods and services in Egypt, the largest Arab country in terms of population, has contributed to this trend. The Central Agency for Public Mobilization and Statistics announced that consumer prices in Egypt rose by 31.9% on an annual basis in February, compared to 25.8% in January. This has exceeded analysts’ expectations and marks the highest level since August 2017, when it also reached 31.9%. On a monthly basis, inflation has reached 6.5%, the highest since March 2007.

13 March 2023

1. Sisi Says Egypt Aims to Consolidate Economic, Investment Ties with China (Arab News). Egyptian President Abdel Fattah El-Sisi said his country was keen to consolidate economic and investment cooperation with China and Chinese companies in areas of common interest. His remarks came during a meeting on Saturday with the China International Energy Group chairman and his accompanying delegation of senior executives. Meanwhile, The Central Agency for Public Mobilization and Statistics in Egypt has revealed that the value of trade exchange with China increased by 2.6% during the first 11 months of 2022, reaching $14.9 billion compared to $14.5 billion during the same period in 2021.
2. Egypt Has Started Selling Army-Owned Companies (The New Arab). On Sunday, Egyptian Prime Minister Mostafa Madbouly announced the commencement of procedures to offer the “Wataniya” company, which owns car gas stations, and the “Safi” water bottling company, both of which are affiliated with the Ministry of Defense (army), through the offering advisor on Wednesday.

14 March 2023

1. Sisi Says Egypt Won’t Tolerate Water Shortages (Al Hadath). Egyptian President Abdel Fattah El-Sisi said that Egypt will not tolerate any water shortages, and a legal and binding solution is necessary regarding the filling and operation of the Renaissance Dam in agreement with Ethiopia. He emphasized that Egypt understands Ethiopia’s need for development, but this should not negatively impact Egyptians.

15 March 2023

 1. FM Shoukry:  All Options Available to Egypt in Renaissance Dam Crisis (Al Hadath). The Egyptian Foreign Minister, Sameh Shoukry, said his country has the right to defend its people’s interests and take disciplined positions that consider all considerations and relations. He said all options are open in the Renaissance Dam crisis; all alternatives remain available, and Egypt has its capabilities and external relations.

20 March 2023

1. Egypt and Turkiye Agree on Normalization Roadmap (Al Sharq News). On Saturday, Egyptian Foreign Minister Sameh Shoukry and his Turkish counterpart, Mevlüt Çavuşoğlu, emphasized the existence of political determination to embark on a path of “comprehensive normalization” of relations between Egypt and Turkiye. Çavuşoğlu also announced initial arrangements for a summit between the leaders of both countries.

21 March 2023

 1. Egypt to Establish an Investment Company for Egyptians Abroad (CNN Arabic). The Egyptian government is attempting to alleviate the pressure on dollar demand by establishing new sources of foreign exchange. They aim to create a company that enables Egyptians living abroad to invest their savings. Additionally, the Egyptian government is working to secure dollar availability by finalizing commercial transactions with Russia in local currencies and expanding this mechanism to encompass China and India.

2. Sisi discusses Al-Dabaa Nuclear Reactor and Grain Supplies with Russian Officials (Times of Egypt).  President Abdel Fattah El-Sisi held discussions on Sunday with the Russian Minister of Trade and the special envoy of Russian President Vladimir Putin. The talks focused on joint projects, particularly the construction of the Dabaa nuclear power plant, which Russia is building on Egypt’s northern coast. They also addressed grain supplies, food security, and the establishment of a Russian industrial zone within the Suez Canal economic zone.

23 March 2023

1. World Bank Approves $7 Billion Partnership Framework with Egypt (Al Hadath). On Wednesday, the World Bank announced its approval of a new country partnership framework with Egypt for the fiscal years 2023-2027, providing Egypt with financing worth $7 billion. According to the statement, the framework entails a $1 billion annual allocation from the International Bank for Reconstruction and Development, along with approximately $2 billion throughout the partnership period from the International Finance Corporation.

27 March 2023

1. Egyptian Court Extends Muslim Brotherhood’s Inclusion on Terrorist Lists for Additional Five Years (The New Arab). On Sunday, the Egyptian Al-Waqi’ newspaper released a new court verdict, which extended the Muslim Brotherhood’s listing as a terrorist entity, and prolonged the inclusion of 169 Egyptians on the terrorist list for another five years…[T]he Muslim Brotherhood’s defense committee confirmed that they were not notified of the…ruling, did not attend the sessions to extend the decision to be included in the terrorist lists, and did not know anything about it until

28 March 2023

1. Egypt Grapples with $5 Billion Gulf Deposit Repayment Due in 6 Months (Al Hadath). The Central Bank of Egypt stated in a report on the debts owed by Egypt in the coming months that it might, by next April, pay two billion dollars, half of the Kuwaiti deposit, which amounts to a total of $4 billion. Meanwhile, the second half, worth two billion dollars, will be due next September. A portion of a $2 billion Emirati deposit is due to be paid next month, along with another $1 billion due in July 2023.

30 March 2023

1. Egypt Reduces Growth Targets to 4.1%, Increases Commodity and Fuel Subsidies (Al Arabiya). The Egyptian Cabinet has approved the draft budget for the upcoming fiscal year 2023-2024, which encompasses a 20% increase in subsidies for food commodities and a 24% increase in subsidies for petroleum products…The targeted growth rate for the fiscal year beginning in July has been adjusted to 4.1%, down from the previous 5.5%. Meanwhile, the budget estimates project an inflation rate of 16%.

2. Egypt Simplifies Entry for Tourists from Israel, Iran, and Turkey (The New Khaleej News). Egypt’s Tourism Minister announced:  “Mandatory entry visas will be granted at airports for tourists from China and India with Gulf Cooperation Council residencies, and eased entry will be provided for tourists from Algeria, Israel, Morocco, and Iran through compulsory visas at select Egyptian airports.” Additionally, entry procedures will be simplified for tourists from Turkey, excluding certain groups.

31 March 2023

1. Interest Rates in Egypt Increased to 18.25% for Deposits and 19.25% for Lending (The New Arab). On Thursday, the Monetary Policy Committee of the Central Bank of Egypt decided to implement a 200 basis point (2%) increase in interest rates for overnight deposits as part of the bank’s efforts to curb inflation, which has been on the rise due to the significant depreciation of the local currency and the widening gap between its official and parallel market rates against the US dollar… As a result, the Egyptian pound experienced a decline of approximately 15% in a similar market compared to the official rate as the country grapples with increasing pressures stemming from a severe liquidity crisis.