Joining BRICS: Egypt’s way to reduce pressure on state budget amid global crisis

CAIRO – 25 August 2023: Egypt is scheduled to join the BRICS bloc of developing nations along with five other countries starting January 2024.

Experts have shed light on the benefits that Egypt is expected to gain from its membership of the BRICS, a group that already comprises the economies of Brazil, Russia, India, China, and South Africa.

The economies of these five countries combined account for only more than a quarter of the world's gross domestic product (GDP), according to the World Bank.

Dealing in national currency

Dealing in national currency among member states of the BRICS helps Egypt in “rationalizing consumption in the currencies basket of the import bill,” Minister of Finance Mohamed Maait said.

“This would reduce the pressures on the state’s general budget, which bears huge burdens to provide basic needs of wheat and fuel,” Maait said.

This comes in the light of war in Europe and the global inflationary wave that resulted in an unprecedented rise in the prices of goods and service, the minister added.

Over the past year, Egypt has been suffering from a foreign currency crunch, which has caused the import bill to surge and fuel and wheat prices to hike.

The state has been struggling to fulfill its global debt obligations especially amid a $3 billion loan that it has agreed on with the International Monetary Fund in December.

Egypt suffers from a “dollar gap” of up to $30 billion, which require investments of around $100 billion over the coming five to seven years, according to estimations by President Abdel Fattah El-Sisi in February.