President Abdel Fattah al-Sisi’s administration has turned to wealthy Gulf nations with hopes of receiving a cash injection that will supplement a $3 billion International Monetary Fund bailout loan.
According to financial experts, Gulf nations such as Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates have snapped at opportunities to purchase Egyptian assets and land to diversify their oil and gas-based economies.
James Swanston, a London based economist, said Egypt profusely benefitted from a sale conducted last year.
“The investments by Gulf states into Egypt last year helped to alleviate some of the immediate financing concerns that Egypt encountered, prior to securing further funds from the IMF,” said Swanston.
“At the same time, it has allowed the Gulf states to continue to have a sphere of influence in the region,” he added.
President Sisi addressed the World Government Summit in Dubai this week, where he noted that his country is drowning in debt.
“A country like Egypt needs a trillion-dollar budget each year. Do we have that money? No. Do we have half of it? No. Do we have a quarter of it? No,” said Sisi.
Mohammed al-Jaadan, Saudi Arabia’s Finance Minister said his nation will continue its investments on condition that economic reforms are put in place.
“We used to give direct grants and deposits without strings attached, and we are changing that,” said Jaadan as he addressed the World Economic Summit in January.
Mohamed Anwar El Sadat, a political analyst said Egypt should stop selling its assets.
“As Egypt we must be careful about selling off these assets because they are important towards serving locals,” said Sadat.
“I think it would have been better if those investors were presented with an opportunity to initiate new projects which would add value by creating employment and new markets because selling off important assets is of no benefit to Egypt,” he added.
VOA’s Mohammed Elshinnawi contributed to this report. Some information in the report came from Agence France-Presse.