These days, billions of dollars are pouring into Egypt in the form of loans, deposits and direct investments from allied countries and international institutions, in an attempt to extricate it from the economic crisis it is facing, which is feared to affect its stability, a country with a population of more than 103 million people. It is feared that these billions are just a means used by the regime of President Abdel Fattah al-Sisi to alleviate the crisis, instead of using them to restructure the Egyptian economy and change its spending policies that have led to the impoverishment of the Egyptian people and the grinding down of the poor classes.

Investments & loans

Two weeks ago, coinciding with the announcement of the Central Bank of Egypt to raise the interest rate by 1%, and to allow the value of the pound to depreciate against the dollar by 16%, the UAE Wealth Fund announced its intention to invest $2 billion in Egypt to purchase government stakes in major successful companies. Meanwhile, the Abu Dhabi Ports Group announced an investment of $500 million in the ports and transport sector in Egypt.

A few days later, Qatar, whose relationship with the Sisi regime has improved a lot, announced its intention to invest $5 billion in Egypt, during a high-level visit by the Qatari foreign and finance ministers, during which they discussed developing relations between the two countries. Two days ago, the Kingdom of Saudi Arabia announced providing $5 billion as a deposit with the Central Bank of Egypt, which will contribute to supporting the Central Bank’s diminishing reserves.

According to a research note by French bank BNP Paribas, there is a “reasonable chance” that Egypt will receive $3 billion from the Saudi Public Investment Fund and $2 billion from the Kuwaiti sovereign fund in the coming weeks. A few days ago, Egypt and Saudi Arabia signed an agreement that the Saudi Public Investment Fund is to invest $10 billion in Egypt in cooperation with Egypt’s Sovereign Fund. In addition, Egypt is negotiating with the International Monetary Fund to obtain a new loan, and it seems that the negotiations are going well as the Bank expressed its enthusiasm to help Egypt. According to speculation, the value of the loan may reach about 7 billion dollars.

A few days ago, the Egyptian parliament approved two financing agreements between the government, the International Bank for Reconstruction and Development and the Asian Infrastructure Investment Bank, according to which the government will obtain two loans worth $720 million, provided equally between the two international institutions.

We are talking about the volume of loans, investments and deposits if all of them are made, which will amount to 35 billion dollars, which is a very huge number, especially if we know that it is equivalent to 77% of Egypt’s total exports during the year 2021, which amount to 45.2 billion dollars.

No time to waste

This is not the first time that Egypt has received huge inflows of foreign exchange. For example, the Gulf countries have provided financial support to the Sisi regime, during the past 8 years, exceeding $100 billion. Since 2016, the International Monetary Fund has provided loans amounting to $20 billion. Egypt’s foreign debts rose during the Sisi era to a record level, reaching $137.4 billion last September, compared to 46 billion dollars in June 2014 (the beginning of Sisi’s rule).

The question now is, where did all these billions go? It went on Sisi’s non-productive projects that did not generate real returns and did not contribute to a significant increase in exports, and thus the trade balance deficit remained. I went to the largest presidential palace in the world, the largest mosque, the largest church, and the largest building of the Ministry of Defense, which Sisi resides in the new capital. It went on to bridge the budget deficit, which devours debt service more than 60% of its revenues.

The solution now, so as not to waste billions of new dollars, like the previous ones, is for the regime to change its economic policy immediately, and start pumping these funds into the agricultural, industrial and technological production sectors instead of building new capital, in order to generate real returns that contribute to reducing imports or increasing exports.

The solution is for the regime to unleash the private sector to work and invest freely, stop the monopolistic operations carried out by the army, and remove all obstacles and legal legislation that hinder investment in Egypt. Otherwise, this money will be spent like others, and Egypt’s debts will rise more and more, and current and future generations will bear burdens they cannot accept, and what is even worse is that the economic crisis will return to its head again at the earliest opportunity, as the causes that led to it have not ended.