What changed in Egyptian economy since Putin's 2015 visit

CAIRO – 11 December 2017: Russian President Vladimir Putin arrived in Cairo on Monday for his second official visit since President Abdel Fatah Al-Sisi was sworn into office in May 2014. This visit shows increasing interest from Moscow to boost cooperation with Egypt after the bilateral relations have been up and down.

Since Putin's last visit, the Egyptian economic strategy has shown optimistic signs of improvement. Russian president who is always in search of a strong ally in the Middle Eastern, Egypt’s recent economic reforms are hopefuly sending a positive message.

In the lines below, Egypt Today sheds light on the positive economic steps adopted by the country since 2015.

2015

• President Sisi launched the Egyptian Economic Development Conference in Sharm el-Sheikh which attracted more than 1,700 investors, government officials and consultancy experts.

• Minister of Electricity signed four memorandums worth $10 billion with Siemens AG to establish a 4.4 gigawatt power plant in Beni Suef and a wind farm over a two year time period.

• Egypt unveiled plans to build a new administrative capital on the outskirts of Cairo at the cost of $45 billion.

• BP announced discovery of the “Atoll-1” deepwater exploration well – Egypt’s deepest gas well – in the North Damietta Offshore Concession in the East Nile Delta. The estimated potential of the concession exceeds 5 trillion cubic feet.

• Egypt has officially become a founding member of the Asian Infrastructure Investment Bank (AIIB), along with 57 other countries. By becoming a founding member, Egypt will receive concessional loans and investments in the infrastructure development field.

• Egypt signs agreement with Siemens AG to build gas and wind power plants valued at €8 billion ($9 billion), which are estimated to boost Egypt’s power production. Siemens AG will deliver three ready to use gas steam power plants with a capacity of 4.8 gigawatts each.

• President Sisi inaugurated the new Suez Canal – an extension of the old canal – in a large ceremony attended by European, African and Arab leaders. The $8 billion project was completed in just one year instead of three on Sisi’s orders. Government economists say the new waterway will increase traffic and boost revenues from the Suez Canal from $5.3 billion annually in 2015 to $13.2 billion by 2023.

• Sisi launched a development project in the East Port Said region which aims to transform the Suez Canal from a navigational corridor to an integrated development and industrial zone.

• Italy’s Eni announced its Zohr gas field, located about 120 miles off the coast of Egypt, could hold as much as 30 trillion cubic feet of lean gas, marking the largest discovery in the history of both Egypt and the Mediterranean Sea.

• President Sisi and his Russian counterpart witnessed the signing of an agreement between Egypt's Nuclear Power Plants Authority and Russia's state nuclear company Rosatom to build a nuclear power plant in Egypt (Dabaa), with Moscow extending a loan to Cairo to cover the cost of construction.

• The African Development Bank (AfDB) approved a $1.5 billion loan for Egypt to be paid over three years. In addition, the World Bank board of directors also approved a $3 billion budgetary support loan for Egypt over a three-year period.

2016

• Egypt and China signed 21 deals including a $1 billion financing agreement with Egypt's central bank (CBE) and a $700 million loan deal with the state-owned National Bank of Egypt (NBE). Both countries agreed to expand cooperation under the Belt and Road Initiative.

• Egypt participated for the first time in the G20 Sherpa Meeting held in Beijing, to prepare for the G20 summit in Hangzhou.

• General Motors resumed operations in Egypt after temporarily halting activities due to its inability to source dollars amid Egypt’s currency crisis.

• Sisi outlined Egypt’s progressive sustainable development strategy, “Egypt’s Vision 2030,” which aims to place Egypt among the world’s top 30 countries in economic and social development.

• Egypt signed 21 agreements with Saudi Arabia, including one worth $1.5 billion aimed at financing development of the Sinai Peninsula and an agreement to establish a Saudi-Egyptian investment fund with a capital of 60 billion riyals.

• The United Arab Emirates pledged $4 billion to Egypt, with half to be allocated for development projects and half deposited in the country’s CBE to shore up its foreign-currency reserves.

• Egypt participated for the first time in the fourth session of the China International Fair for Trade in Services (CIFTIS) that focuses on six key areas of science and technology, internet and information, cultural and education, finance, business and tourism and health care.

• The International Monetary Fund (IMF) announced that Egypt became Africa’s largest economy after Nigeria, pushing South Africa into third place, as Egypt’s nominal US dollar GDP expanded by an average of 7.5% over last four years.

• The CBE repaid $1 billion to Qatar, the last batch in a $3 billion debt owed to the Gulf country – at an interest rate of 4% – against treasury bonds offered by Egypt to Qatar under the rule of former President Mohamed Morsi.

• Egypt agreed a $12 billion loan with the IMF in a bid to restore confidence in its economy and tackle severe foreign exchange shortages.

• The World Bank provided Egypt with the first $1 billion tranche of a $3 billion loan, as part of its support for the government's economic program.

• Royal Dutch Shell announced a new gas discovery in its North Alam El Shawish exploration concession in Egypt’s Western Desert. The BTE-2 discovery’s initial quantities estimated at about 0.5 trillion cubic feet of gas with more possible reserves.

• Egypt floated its local currency in a move that reduced its value by almost 50% registering about LE 14 against the dollar (November 2016). As a result, Egypt's main stock index jumped by more than 8%, while the CBE increased interest rates by 3% to reach 14.75%.

• The Egyptian government increased prices of fuel, diesel, butane gas and natural gas by up to 47%.

• The IMF’s executive board gave the final approval for a three-year $12 billion loan to Egypt.

• Eni sold a 30% stake in its giant offshore gas field (Zohr) to Russia's Rosneft for $1.575 billion.

• The Egyptian pound exchange rate dramatically dropped against US dollar, scoring about LE 18 at the end of 2016.

2017

• Egypt and Belarus sign nine cooperation agreements in Cairo, targeting military, agricultur, cultur and other fields.

• Egypt's Finance Minister fixed the customs exchange rate at LE 18.5 per dollar until the end of February, promising to review and adjust the rate each month. The ministry also sold $4 billion of international bonds in three tranches in January.

• The CBE announced that Egypt's net foreign currency reserves continue to rise, reaching $26.363 billion at the end of January 2017. Egypt's total imports declined to about $13.93 billion during the first quarter of the fiscal year 2016/2017.

• Egypt’s Finance Minister reduced the customs exchange rate to LE 16.5 per dollar in April.

• BP announced another gas discovery in the North Damietta Offshore Concession in the East Nile Delta, Egypt. The Qattameya Shallow-1 exploration well has 37 meters of net gas pay in high quality Pliocene sandstones.

• Egypt signed a cooperation protocol with World Bank officials to promote anti-corruption measures, develop a system of governance and means of management in Egypt.

• Sisi inaugurated the first phase of BP's North Alexandria gas fields that is expected to raise Egypt's natural gas output to 5.1 billion cubic feet per day from about 4.45 billion in May 2017. The new project started production at about 700 million cubic feet per day.

• Egypt launched Misr Venture Capital Company with the goal to help halted factories. The company's capital is estimated at LE 150 million.

• The CBE received the second tranche worth $1.25 billion from the IMF’s $12 billion loan in July.

• Egypt paid $1.5 billion in arrears to international oil companies in May and June. Egypt's arrears to international oil and gas companies are estimated at about $3.5 billion. The CBE said that Egypt has received investments worth $8 billion in the first six months of 2017 from 150 global investment funds.

• Egypt launched the China Trade and Investment Exhibition at the Cairo International Fair Ground that was attended by a number of Egyptian and Chinese businessmen as well as officials from both countries. The participant Chinese companies and manufacturers displayed various products such as textile, garments, furniture, home electronics, building materials and cars.

• Egypt's net foreign currency reserves reached $36.723 billion at the end of November 2017.