In statements on Saturday, 10 June, President Abdel-Fattah Al-Sisi assured Egyptians that the current economic difficulties faced by the nation and the world will be overcome. In the past 10 years, he added, other difficult and dangerous challenges have been faced.

Speaking to new cadets at the Military Academy, Al-Sisi said it is not Egypt alone that has been going through economic crises over the past three years, noting that the entire world economy was facing a sharp decline which, unfortunately, is not expected to end soon.

Hardly having started to recover from the devastating effects of Covid-19, which impacted the tourism industry and supply chain system the world over, Egypt – in common with many other countries in the Arab world and Africa – became one of the countries most negatively affected by the outbreak of war between Russia and Ukraine, two key suppliers of the strategic wheat crop as well as many other vital imported commodities.

In October, Egypt signed yet another loan deal with the IMF to help it cope with the negative effects of this war, which once again reduced tourism revenues and raised oil prices. The 46-month deal worth $3 billion was linked to a comprehensive economic reform programme which Egypt proposed and negotiated with the IMF. The amount of the loan was not the key issue. More important was the confidence of international monetary institutions in the country’s economy, and its huge potential. Along with the IMF loan, Egypt’s friends and traditional lenders pledged to invest more than $14 billion in the country, buying state-owned companies which the government decided to privatise, either fully or partly.

However, as the global economic crises continued due to rising tensions between the world’s superpowers, whether over the Russia-Ukraine war or the competition between the US and China, developing countries like Egypt continued to have difficulties attracting investors who are uncertain about where the world economy is heading. While the IMF presented its standard prescription to fix the country’s economy: floating the local currency, increasing interest rates, curbing inflation, reducing the state’s footprint in the economy and creating conditions that would launch a private sector-led economy, much of this remains easier said than done.

Over one year, the Egyptian pound lost over 50 per cent of its value against the US dollar, and the Central Bank of Egypt increased interest rates by 1000 points, leaving Egyptians to cope with the skyrocketing rise in the prices of all basic commodities, and making it very hard to make ends meet. Knowing that many other countries are facing similar economic crises, and aware of the volatile regional situation with nearly all neighbouring states collapsing or involved in civil wars, Egyptians have put national interest first, enduring the economic crisis by cutting spending and looking for cheaper alternatives.

Yet, if floating the currency and increasing interest rates several times in a year alone did not bring the country’s economy back on track, other methods and strategies have to be found. There is a growing belief that the country needs to carry out a comprehensive economic restructuring programme that would make the Egyptian economy more immune to external shocks in a region that has hardly seen stability in recent decades.

This includes revamping the country’s infrastructure, making it capable of increasing its exports and attracting investments through building mega power stations, ports, airports, railways and first-class highways. To reduce dependence on imports that consume a reasonable portion of Egypt’s foreign currency, plans were also made to launch industrial projects that can provide the country’s needs using locally sourced ingredients.

Meanwhile, improving the economy is not only a domestic issue. It also means working on a positive foreign policy that includes investments and trade as a main item on the agenda. Hours before he spoke at the Military Academy on Sunday, President Al-Sisi had returned from an African tour that included Zambia, Angola and Mozambique.

During the tour, which included participation in the Common Market for Eastern and Southern Africa (COMESA) summit, he underlined the importance of boosting cooperation with African countries. COMESA and the Southern African Development Community (SADC) are Africa’s largest economic entities that aim to boost trade exchange among African countries. Egypt has intensified efforts over the past two years to activate the trade agreement among COMESA member states, bringing benefits to all its African members. Due to this effort, only three more countries still have to endorse COMESA before cooperation can start.

Meanwhile, Egypt will continue working on carrying out its deal with the IMF. Antoinette Monsio Sayeh, deputy managing director of the IMF, was in Cairo this week for meetings with top officials, and she sounded a positive note, telling Al-Ahram Online in an interview that she was “encouraged by the discussions we’ve had with the authorities during this visit and expecting to see the results of the authorities’ efforts falling into place as part of a comprehensive package in the next few weeks.”

Due to the delay in carrying out the agreement reached with the IMF in December, the international monetary body did not carry out the first review of the programme or disburse the second trench of the loan. But with progress in the privatisation programme expected in the coming two or three weeks, there is likely to be good news on that front. All this will be done while putting the interests of the average Egyptian first, aware that they have already endured very tough times over the last three years. The spirit of resilience and determination to rebuild the country’s economy that marked President Al-Sisi’s efforts over the past nine years will be another important factor in building confidence among Egyptians.

* A version of this article appears in print in the 15 June, 2023 edition of Al-Ahram Weekly