The Egyptian government is actively pursuing additional sales of state assets following a $35 billion deal in February, which involved selling beach land to the United Arab Emirates (UAE), according to Finance Minister Mohamed Maait.
The government plans to continue its budget-tightening efforts, aiming to maintain the country’s debt at less than 90% of the gross domestic product (GDP), as highlighted during a news conference on Sunday.
In the recent deal, Egypt agreed to sell development rights to Ras al-Hikma, a prime Mediterranean resort destination, to UAE for $24 billion. Additionally, the country anticipates over $20 billion from an International Monetary Fund (IMF)-led package, including $3 billion in funding from the World Bank, as disclosed by the finance minister.
Ras al-Hikma, situated approximately 200 km west of Alexandria, is a sought-after location for upscale tourist resorts and white sand beaches, particularly popular with wealthy Egyptians during the summer. The deal represents the “largest foreign direct investment in an urban development project in the country’s modern history,” according to Egypt’s Prime Minister Mostafa Madbouly.
Finance Minister Maait expressed optimism about the positive impact of the Ras al-Hikma deal on the general budget, noting that a significant portion of the proceeds would contribute to reducing the overall deficit.
Egypt has taken substantial measures to address its budget deficit, including selling real estate and securing support from the IMF. Maait indicated that the country’s primary budget surplus is expected to exceed 3.5% in the upcoming fiscal year starting in July.
Contrary to the finance ministry’s earlier forecast of a primary general budget surplus equivalent to 2.5% of GDP for the current fiscal year (2023/24), Maait emphasized the positive trajectory resulting from these economic initiatives.
As part of the IMF package, Egypt undertook currency devaluation, adjusting its exchange rate to approximately 50 Egyptian pounds to the dollar from 30.85 pounds. The country also raised its key overnight interest rates by 600 basis points.
Addressing the chronic shortage of dollars that led to significant port delays, Maait disclosed that Egypt has released $13 billion worth of goods from ports since January.
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