The timing of the blaze at the Ramses Central this week, one of Egypt’s critical digital infrastructure installations, could hardly have been worse, according to many observers.
The fire, which put mobile networks, ATMs, and online payments on pause, came a few days after the news broke that the International Monetary Fund (IMF) might delay the disbursement of the fifth tranche of its loan to Egypt, a delay reportedly linked to slow progress on structural reforms, particularly privatisation.
On Tuesday, the local bourse and a handful of banks suspended their work for the day on the back of failures in their systems due to the Ramses blaze. Besides the four members of personnel who lost their lives in the incident, the material losses of the fire have yet to be revealed.
According to a former member of the National Telecommunications Regulatory Authority (NTRA), it is still difficult to estimate the value of the losses resulting from the accident. However, according to the expert, this will not take long as every financial company and sector has crisis and risk management departments with pre-prepared scenarios in case of accidents, and they will soon have an initial estimate of their losses.
Meanwhile, experts are trying to put scenarios on how Egypt will deal with the effect the delay in the disbursement of the IMF’s fifth loan tranche will have, as well as placing a value on the impact of the 12-day war between Israel and Iran.
Despite both developments sending shockwaves through business circles, time is proving that the effects can be contained.
The IMF will combine the fifth and sixth reviews of the $8 billion support programme to Egypt to give the authorities more time to meet critical objectives of its economic reform programme, particularly on the state’s role in the economy, IMF Spokeswoman Julie Kozack told a regular briefing last week.
The news came while the government was taking measures aligned with IMF demands, like increasing the VAT on construction materials, cigarettes, and crude oil as well as cancelling the decision to reduce the price of electricity to industrial facilities, though such movements could increase inflation rates in July.
According to Hani Geneina, head of research at Al-Ahly Pharos, the IMF’s unexpected move came on the back of the government’s inability to go ahead with plans to gather $3.5 billion from the proceeds of privatisation before the end of June 2025, a target that was impossible to meet due to the mood of uncertainty caused by the economic decisions taken by the Trump administration in the US.
In a comment posted on his Facebook page, Geneina stressed that this uncertainty had led to a loss of trust in the dollar and investors putting their plans to invest worldwide on ice. Meanwhile, the current air of stability after the end of the Israel-Iran war could be an opportunity for the government to put stakes in state-owned entities on the block, he said.
A few days ago, the government revealed plans to offer stakes in 11 state-owned companies in 2025-26 to private investors. The list includes the military-affiliated firms Wataneya, Safi, Silo Foods, Chill Out, and the National Roads Company. Some estimates put potential revenues at $4 billion.
A number of airports are also being offered for privatisation, and steps are being taken to open the door to the private sector to operate and build power stations and water and wastewater treatment plants, probably through private-public partnership (PPP) agreements.
Some experts believe that Egypt was not harshly affected by the Israel-Iran war.
Aly Metwalli, an economist based in London, said that the 2025-26 budget had initially been predicated on an oil price of $82 per barrel. With current prices hovering around $66, the government stands to benefit from reduced subsidy expenditures, he said.
However, according to Metwalli, this advantage could be offset by decreased revenues from oil exports on the back of low oil prices and other non-tax revenues.
Metwalli highlighted the increased interest by the Gulf countries and their sovereign wealth funds to invest in Egypt, a factor that enhances the possibility of their investing in privatised assets. “Recent actions suggest a continued commitment to supporting Egypt’s economy. For example, Kuwait renewed a $2 billion deposit with Egypt’s Central Bank [CBE] in December 2024, extending it through 2025,” he said.
“Such moves indicate a strategic partnership that transcends short-term oil price movements. Qatar and Saudi Arabia have expressed interest in converting their deposits at the CBE into direct investments, inspired by the UAE’s successful Ras Al-Hekma deal,” Metwalli said.
Bloomberg reported that Qatar is in advanced talks to invest $3.5 billion in a tourism project on Egypt’s North Coast.
Another source of relief came in recently released economic indicators. The economy grew by 4.8 per cent year-on-year in the first quarter of 2025, up from 4.3 per cent in the last quarter of 2024.
According to Capital Economics, this is the fastest pace of expansion since the start of 2022. The recovery was caused by “stronger growth in the manufacturing and tourism sectors, helped by improved external competitiveness. This more than offset a contraction in Suez Canal activity due to shipping disruptions,” a note by the London-based firm stated.
Moreover, this recovery was maintained during the second half of the year, with the demand for credit, an indicator of economic activity, having grown at its fastest pace in two years in April.
Heba Mounir, an economist and financial analyst at HC Securities, told Al-Ahram Weekly that Egypt’s external position had showed resilience during the turbulent regional geopolitical tensions in June, demonstrated in the pound’s exchange rate to the dollar reaching LE49.6 by the end of the month.
Mounir said that foreign investors were net buyers in the secondary market for Egyptian treasuries by LE1.2 billion in June, due to the attractive yields, despite some outflows due to the Israel-Iran war.
However, analysts expect inflationary pressures in July in the wake of parliament’s approval of IMF-recommended amendments to VAT regulations, extending the tax to include cigarettes and tobacco, besides a potential increase in electricity prices.
US President Donald Trump’s announcement that he is not thinking of extending the 9 July deadline for countries to negotiate trade deals with the US could suggest the resumption of higher tariffs, Mounir said, which could lead to higher global inflation.
“Based on our expectation of domestic inflationary pressures, geopolitical tensions, and tariff threats in July, we expect the CBE’s Monetary Policy Committee to maintain policy rates at its upcoming 10 July meeting,” she said.
Interest rates were cut by one per cent during the last meeting in May. This was the second consecutive change to the rates since March 2024, following seven consecutive meetings where rates were held steady.
*Additional reporting: Ahmed Abdel-Hafez
* A version of this article appears in print in the 10 July, 2025 edition of Al-Ahram Weekly
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