Egypt

Egypt: monthly report February 2024

Egypt continued its diplomatic efforts in the context of the Gaza crisis. U.S. Secretary of State Antony Blinken visited Cairo, where he met with President Al-Sisi. The efforts for the release of the hostages held by Hamas were discussed together with other regional issues from Gaza to the Red Sea were addressed by the parties. The United States reiterated its opposition to any solution involving the relocation of Palestinians to Egypt and their support for the creation of a Palestinian state. According to local sources, senior officials of the Egyptian government reportedly threatened to suspend the 1979 Peace Treaty with Israel if Palestinian refugees were relocated to Egyptian territory. The offensive in Rafah further complicates the humanitarian crisis in Gaza. There has been debate over reports in American media regarding a possible agreement between Israel and Egypt for the relocation of civilians from Gaza. Some satellite images purportedly show Egypt constructing a structure to accommodate refugees from the Strip. The news has been denied by the governor of North Sinai, Mohamed Shousha, who stated that the ongoing work is aimed at creating a hub for humanitarian aid management. The month was also marked by Erdogan's visit to Cairo (the first since 2013). The Turkish president expressed the desire to increase bilateral trade volume between the two countries and invited Al-Sisi to visit Ankara in April. The visit was preceded by an interview with Turkish Foreign Minister Hakan Fidan, in which Ankara's top diplomat acknowledged that the Turkish government had authorized the sale of Bayraktar drones to Egypt.

Economically, the International Monetary Fund and Egypt are reportedly close to signing a new agreement to support Cairo's finances. According to early reports, the agreement would involve a $12 billion loan, with $7 billion financed by the Fund and $5 billion by external partners. In this context, the crisis in the Red Sea is putting pressure on revenues from the Suez Canal. Osama Rabie, head of the authority responsible for managing the infrastructure, stated that toll revenues in January had dropped by 50%, resulting in earnings of $428 million compared to the previous year's $804 million. There's good news regarding inflation, which has been decreasing for the fourth consecutive month. According to the latest data, the inflation rate in January in urban centers dropped from 33.7% in December to 29.8%, a larger reduction than analysts had anticipated, although the price of food items remains high. Taking advantage of improvements in some fundamentals and the potential IMF agreement, Al-Sisi fulfilled some electoral promises by raising the national minimum wage by 50% starting from March and increasing the salaries of state employees by 1,200 Egyptian pounds. Meanwhile, the government announced negotiations with an unidentified fund from the United Arab Emirates for the concession of the Ras el-Hekma coastline for a $22 billion deal involving the construction of luxury resorts in exchange for a thirty-year concession for area exploitation. Regarding the energy sector, Eni CEO Claudio De Scalzi denied rumors about payment difficulties from Egyptian government to energy companies. Speaking after Eni's results for the last quarter were published, De Scalzi emphasized that foreign investor payments were still flowing and highlighted that Egyptian authorities had acted to protect foreign investments.

Download the February 2024 report

• Previous reports
  • Report di November 2023
  • Report di October 2023