‘Egypt needs you,’ El Sisi tells local businessmen in call for economic assistance

The Egyptian leader has asked local businessmen to to help Egypt weather economic crisis

Egyptian President Abdel Fattah El Sisi. AP

Egyptian President Abdel Fattah El Sisi has sought to rally local businessmen behind his government’s efforts to weather the devastating impact on global prices caused by the Russia-Ukraine war, saying the nation wanted them to do more.

“Egypt needs you. We need your efforts. Do we need your success too? Yes, very much,” the Egyptian leader said in a video clip of the meeting released by his office on Tuesday.

“In all modesty, the country is now capable of taking off. What is left is for us to join hands. We are in the same boat.”

Egypt has suffered a foreign currency crunch since Russia’s invasion of Ukraine in February. Additionally, the uncertainty created by the conflict triggered an exodus of about $20bn from Egypt’s once-lucrative debt market.

A soaring import bill, mainly for fuel and food, has deepened the shortage of foreign currency, in addition to an initial slump in tourism revenue. The fallout from the war also forced Egypt to devalue its currency by 14 per cent in March. It has since allowed its embattled pound to shed about 6 per cent more of its value.

A street vendor in the Giza district, part of the Greater Cairo area. Reuters.

The shortage of foreign currency has hit local manufacturers hard and led to a months-long backlog of goods warehoused at ports across the country waiting for banks to pay their value in dollars to secure their release.

Authorities have recently dimmed the lights on streets and in government buildings throughout Cairo to save energy and make more liquefied gas available for export to earn foreign currency.

Egypt is already exporting $600 million worth of gas to Europe every month, according to Finance Minister Mohamed Maait. The government plans to increase that to $1bn next year, he said.

Mr El Sisi’s Tuesday meeting with Egyptian businessmen and investors came amid persistent speculation the state has taken an outsized role in the economy, using a wide range of privileges to push out private investors.

The meeting also came before a conference called by Mr El Sisi to discuss the way ahead for the country's economy. The meeting, bringing together Cabinet ministers, experts and businessmen, begins on Sunday.

Mr El Sisi, architect and driving force behind overhauling and modernising Egypt’s economy, has in the past sought to debunk charges that the state was squeezing out the private sector. He has insisted private companies had been awarded big contracts in infrastructure projects undertaken by the state since he came to office eight years ago.

US dollar and Euro notes at a foreign exchange bureau in Cairo, Egypt. EPA

“The Egyptian market is huge and we are determined that you grow and expand more,” Mr El Sisi said. He was addressing two dozen businessmen seated at a round table in a giant conference room at the presidential palace in Cairo.

The businessmen in attendance were not identified by the statement. Several Cabinet ministers attended.

“A country like Egypt has tremendous opportunities,” he said. He cited thousands of kilometres of new roads and a string of improved or new ports on the Red and Mediterranean seas.

Since taking office in 2014, Mr El Sisi has overseen billions of dollars’ worth of mega infrastructure and service projects. These include new cities, including a new capital in the desert east of Cairo, and roads, grain silos, power stations, solar energy farms and a major expansion of the Suez Canal.

He has publicly responded to criticism of his government’s spending priorities, saying the projects offered employment to millions of Egyptians and laid the foundation for a modern nation that can cope with growth.

In a statement at the weekend, the IMF touched on the role played by the private sector in Egypt’s economy, urging the Cairo government to allow it to do more.

Central Bank of Egypt Governor Hassan Abdalla. AFP

Egypt has for months been negotiating with the Washington-based lender to secure a loan as part of an economic restructuring programme that includes a more flexible foreign exchange mechanism.

The negotiations are at an advanced stage and a deal is widely thought to be imminent. No official word on the exact size of the loan is available, but officials have suggested less than $10bn.

“The implementations of the authorities’ comprehensive structural reform agenda would gradually enhance the competitiveness of the economy, reduce the role of the state in the economy, level the playing field for the private sector, improve the business climate, and foster transition towards a greener economy,” said IMF communications director Gerry Rice on Saturday.

Updated: October 19, 2022, 1:15 PM