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Africa in March 2024

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2024-3-6

  1. Suez Canal Revenues Halve Due to Red Sea Turmoil
    Egypt faces a significant drop in Suez Canal revenues, with a 50.7% decline reported from the start of the year to February 26, 2024, amid ongoing Houthi threats and disruptions in the Red Sea. Revenues plummeted to $724 million from $1.469 billion in the same period last year, with ship transits decreasing from 3.9 thousand to 2.3 thousand. The Suez Canal Authority forecasts a sharp fall in annual revenues to $5 billion from last year’s $10.2 billion if disruptions persist. The crisis has escalated shipping costs, including a tenfold increase in insurance rates and heightened fuel costs, due to diverted routes around the Cape of Good Hope, potentially triggering global inflationary pressures.

 

2024-3-12

  1. Will UAE’s $35B investment help Egypt recover from financial crisis?
    The U.S.-based media outlet Al Monitor notes that the UAE has pledged a $35 billion investment to aid Egypt’s faltering economy, with President Abdel Fattah al-Sisi’s government benefiting from this economic lifeline. Following a historic deal focusing on the development of the Ras el-Hekma area, Egypt’s Central Bank introduced measures including floating the local currency and securing an increased IMF bailout loan from $3 billion to $8 billion. These steps, part of broader economic reforms, aim to alleviate Egypt’s foreign currency shortage, which has impacted business activities and commodity imports, with $10 billion of the UAE’s investment already received. 

 

2024-3-13

  1. EU Prepares €7.4 Billion Aid Package for Egypt
    To bolster Egypt’s economy and address the migration crisis, the European Union has devised a €7.4 billion aid package. The initiative, announced by European Commission President Ursula von der Leyen alongside leaders from Greece, Italy, and Belgium during a visit to Cairo, marks the latest in EU agreements with North African countries. The package encompasses grants and loans through 2027, immediate financial aid of €1 billion, and further support contingent on IMF-negotiated reforms. It also focuses on energy sector support, managing the influx of Sudanese refugees, and securing Egypt’s borders with Libya to mitigate Mediterranean crossings.

2024-3-14

  1. Egyptian Mediators Seek Breakthrough in Sudan Crisis  Egypt aims to facilitate a meeting between Sudanese Army Chief Abdel Fattah al-Burhan and Rapid Support Forces leader Mohamed Hamdan Dagalo, “Hemedti,” in order to end the conflict between the two Sudanese sides. Former Sudanese Prime Minister Abdalla Hamdok, leading the “Progress” initiative for civil democratic forces, discussed this during his Cairo visit with Egyptian officials. While previous mediation attempts by the “IGAD” have not yielded results, Egypt’s proactive engagement now raises hopes for a direct dialogue between the warring parties, who began their civil war almost a year ago.

2024-3-19

  1. World Bank Aid Boosts Egypt’s International Dollar Inflows to Over $50 Billion The World Bank announced on March 18th its commitment to provide Egypt with over $6 billion in aid, significantly increasing global rescue efforts for Egypt’s struggling economy to over $50 billion in recent weeks. This aid package, aimed at both government support and private sector development, follows the European Union’s $8 billion aid commitment and an IMF funding increase to $8 billion. These financial pledges, totaling $57 billion, aim to address Egypt’s dollar shortage and require comprehensive economic reforms beyond mere financial injections. The World Bank’s support emphasizes private sector growth, efficient public resource management, and enhanced social protection, signaling strong international support for Egypt’s reform efforts.
  2. S&P Upgrades Egypt’s Outlook to Positive, Anticipates Foreign Reserve Boost Standard & Poor’s has upgraded Egypt’s economic outlook from stable to positive while maintaining its B-/B long and short-term foreign and local currency sovereign credit ratings. This positive shift reflects the potential for an improved external position and alleviation of foreign currency shortages, partly due to the Egyptian pound’s flotation aimed at GDP growth and fiscal consolidation. A rating upgrade could occur with accelerated improvements in Egypt’s public finance or external debt conditions, potentially through increased direct foreign investment or asset privatization. Conversely, a return to a stable outlook might stem from reform retrenchment or unaddressed high government borrowing costs.

2024-3-20

  1. Will Egypt Sell Alexandria Port to Turkiye?
  2. Greek media spotlight rumors that Egypt might sell or lease a strategically important port to Turkiye, as reported by Ta Nea Newspaper with the headline “Will Egypt sell Alexandria Port to Turkiye?” Egypt’s sale of the Ras El-Hikma area to the UAE for $22 billion was mentioned as a precedent. This potential deal with Turkiye could extend beyond bilateral relations, potentially opening new economic and trade opportunities across Africa for Turkiye. This speculation is supported by Turkiye’s recent diplomatic initiatives and investments in Africa, including opening 26 embassies and engaging in projects worth $85.5 billion. 
  3. Saudi Arabia Agrees to High-Level Financial Dialogue with Egypt
    The Saudi Cabinet, led by King Salman bin Abdulaziz, approved a Memorandum of Understanding (MoU) between the finance ministries of Saudi Arabia and Egypt, aimed at establishing a high-level financial dialogue. This decision, reported by the Saudi Press Agency (SPA), underscores the Kingdom’s commitment to fostering comprehensive development across all sectors and strengthening relations with both neighboring and friendly nations. 
  4. Significant Increase in Israel’s Natural Gas Exports to Egypt in 2023
    In 2023, Israel’s Leviathan offshore gas field, managed by NewMed Energy, witnessed a 28% surge in natural gas exports to Egypt. Despite a drop in fourth-quarter profits, NewMed, the field’s major stakeholder, plans to enhance production by late 2025 with a $568 million investment alongside partners Chevron and Ratio Energies. This investment aims to boost the field’s output capacity from 12 billion cubic meters annually to 14 billion by the second half of 2025. While overall sales from the field slightly decreased, exports to Egypt notably increased to 6.3 billion cubic meters, maintaining steady sales to Jordan at 2.7 billion cubic meters.
  5. U.S. Approves $260 Million Javelin Missile Sale to Morocco
    The U.S. State Department has authorized a significant arms deal, selling Javelin anti-tank missiles and related equipment to Morocco, totaling $260 million. This deal, announced by the Pentagon, emphasizes the U.S.’s support for enhancing Morocco’s long-term defense capabilities and maintaining its sovereignty and territorial integrity. Morocco, a major non-NATO ally, requested 612 FGM-148F Javelin missiles, including 12 training units, and 200 lightweight command launch units. 

2024-3-21

  1. Egypt’s Largest Bank Eyes 30 Billion EGP in Joint Loans
    The National Bank of Egypt, the country’s largest state-owned bank, is considering injecting 30 billion Egyptian Pounds (EGP) into joint loans to support various major projects as part of broader plans to fund 340 companies across vital economic sectors, including transportation, industry, real estate development, construction, petroleum, fertilizers, and building materials. The initiative comes in the wake of more than $50 billion in new international financing for Egypt coming from the UAE, EU, IMF, and World Bank.
  2. UN Says Sudan on the Brink of Becoming World’s Worst Hunger Crisis
    The United Nations warns that Sudan is on the verge of facing the world’s most severe hunger crisis, with a third of its population already experiencing acute food insecurity. The ongoing conflict between the Sudanese army and the Rapid Support Forces has exacerbated the situation, particularly in Darfur, where catastrophic hunger levels could be reached by May. The humanitarian catastrophe unfolding in Sudan, amid international neglect, includes alarming reports of ethnic attacks, sexual violence, and significant child mortality due to malnutrition.

 

2024-3-25

  1. Egypt to Receive 26% Increase in Natural Gas Imports from Israel by 2025
    Egypt has agreed to a 26% increase in natural gas imports from Israel, raising the daily volume to 1.45 billion cubic feet by the first half of next year, up from the current 1.15 billion cubic feet. This boost follows Chevron’s completion of a 60% production increase at the Tamar field next year. Despite the wartime disruptions, Israeli gas imports have surpassed pre-Gaza war levels, helping Egypt enhance its exports and secure foreign currency. The increase is part of Egypt’s strategy to meet domestic demand and export surplus gas to Europe.
  2. Egypt and UAE Discuss Gaza Management Post-War
    During UAE President Mohammed bin Zayed’s recent visit to Cairo, discussions with Egyptian President Abdel Fattah el-Sisi focused on the situation in Gaza and post-war arrangements. Egypt is pushing for an administrative model that involves the internationally recognized Palestinian Authority, avoiding a split between Gaza and the West Bank administration. The talks come at the same time as Israeli plans to establish local governance in Gaza, excluding Hamas. Egypt opposes the Israeli proposals, fearing future complications, and stresses the inclusion of all Palestinian political factions in any arrangement for Gaza’s future administration.
  3. EU Allocates $178 Million to Tunisia for Migration Control
    The European Union plans to allocate up to €164.5 million ($177.74 million) over three years to support Tunisia’s security forces, focusing on migration control, as reported by the Financial Times. This funding is part of a broader €278 million EU expenditure on migration, with approximately two-thirds dedicated to security and border management. The package includes a training academy for the Tunisian maritime guard, implemented by the German Federal Police, and investment in surveillance and patrol equipment. Additionally, this month, the EU disbursed €150 million to assist Tunisia’s budget, aiming to stabilize its financial situation and encourage economic reforms.

2024-3-26

  1. Egypt Faces Significant Economic Damage from Red Sea Conflict
    Egyptian Prime Minister Mostafa Madbouly reported a sharp decline in Suez Canal revenues by over 50% due to the conflict in the Red Sea area, highlighting Egypt as the country most affected by the regional turmoil. In discussions with members of the U.S. House Ways and Means Committee, Madbouly emphasized the urgent need for a ceasefire in Gaza and increased humanitarian aid access. He expressed Egypt’s commitment to a just and lasting solution to the Palestinian issue based on the two-state solution, and appreciated U.S. economic support while seeking continued cooperation in various sectors including energy, food security, and education.
  2. Egypt’s Economic Crisis Deepens Despite $50 Billion Rescue Plan
    Egypt faces escalating economic challenges as a Bloomberg report reveals the depth of the crisis, exacerbated by currency devaluation and rising prices. Despite a record $50 billion investment led by the UAE, the largest in Egypt’s history, and additional funds from the IMF, EU, and World Bank, the country struggles with economic instability. This situation is worsened by the war in Gaza and increased Middle Eastern instability. With inflation exceeding 35% in 2023 and basic goods prices soaring, Egyptians endure severe economic pressures, relying on installment payments for necessities, amidst a backdrop of government attempts to manage the crisis.

2024-3-27

  1. Saudi Company Signs a Deal to Boost Production in Egypt’s Aging Oil Fields
    Ades International, a Saudi company, has finalized a long-term service agreement with the Egyptian General Petroleum Corporation to enhance production in aging oil fields in Egypt, planning investments of $30 million in SUCO fields and $36 million in OSUCO fields over the initial three years of the contract. The 10-year agreement, extendable by another decade, allows Ades to benefit from increased production revenues based on a pre-agreed mechanism. The deal anticipates a share of production increase between 61% and 72%, with an oil barrel reference price set according to market rates, and operations expected to commence within 90 days.
  2. Egypt Allocates $1.5 Billion to Pay Outstsnding Bills to Foreign Oil Companies
    The Egyptian government announced the initiation of payments towards the outstanding dues owed to foreign companies operating in the oil and gas sector, setting aside up to $1.5 billion for this purpose. A Cabinet statement revealed that about 20% of the backlogs are being cleared through a scheduled plan to gradually pay off all arrears. This move comes during a foreign currency shortage that had been exacerbating the arrears situation. The payment strategy coincides with Egypt’s financial reforms, including a significant investment deal, currency devaluation, and an increased loan from the IMF, aiming to settle billions in accumulated dues over the past decade.

2024-3-28

  1. Egypt Warns Ethiopia of Consequences Over Dam Impact
    Egypt’s Irrigation Minister states that Ethiopia will face repercussions for any harm caused by the Grand Ethiopian Renaissance Dam to downstream countries, based on a principle agreement among Egypt, Sudan, and Ethiopia. Despite stalled negotiations, Egypt asserts its right to take necessary measures to protect its water security and outlines new water conservation strategies in response to potential droughts exacerbated by the dam.

 

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