Egypt: Government seeks new international loans

Amid a dire economic situation and decline in the country’s foreign exchange reserves, Egyptian parliament has started discussion for seeking new external loans

Egyptian parliament has commenced discussion of six decisions issued by Egypt’s Abdel Fattah al-Sisi, including three relating to agreements for new international loans, reported The New Arab, a London-based newspaper.

Parliament speaker Hanafy El-Gebali referred the six decisions to the relevant parliamentary committees for study and preparation of reports on them to be approved.

Egypt’s external debt had surged to $145bn at the end of December 2021, an increase of $8bn in just three months.

Gebali referred a decision to Sisi relating to the approval of a €776m ($833m) loan agreement between Egypt and France to finance the importing of 55 trains and the renewal of equipment for the Cairo metro.

Gebali also referred another decision relating to approving the compensatory loan agreement between the Egyptian government and the Arab Monetary Fund for an estimated $373m, to support Egypt in overcoming the economic impact of the Covid-19 pandemic.

Eat tree leaves

According to estimates, Egypt is set to experience a 10.7% inflation in 2022 as consumer prices have gone up by 3.26% last April. This is the highest since June 2018.

As a result, Egyptians have been reporting mounting difficulty in managing the growing cost of living for the past few months, including the country’s already improvised population, which can barely put bread on the table.

This also spurned Egypt’s Abdel Fattah al-Sisi to address the current economic difficulty in a speech he made inaugurating the “Egypt’s Future” project for agriculture.

In his remarks, al-Sisi called on Egyptians to show patience over the crisis, suggesting they can find inspiration in a story referred to the early Islamic era when Prophet Mohamed and early Muslims had to eat tree leaves to survive under the three-year siege imposed on them in Makkah by their non-believing tribe.

In a derisive attempt to calm down Egyptians about recent price hikes, Egypt’s Abdel Fattah Al-Sisi has suggested that Egyptians may eat leaves from trees just as the Prophet did in Makkah.

In March Egypt turned to the IMF for the third time in six years to apply for a loan as the country grapples with corruption, the global coronavirus pandemic and now the Russian war on Ukraine.

Analysts have predicted that a further rise in fuel and food prices are likely to stoke civil unrest in Egypt where a third of the population live below the poverty line.

Al-Sisi has made a string of outrageous comments over the years which his critics say is to deflect responsibility for his mishandling of the economy and spending money on vanity projects like the new capital instead of building a welfare state.

In 2017 Al-Sisi was mocked online for asking citizens to donate their spare change to charitable projects.

He has also asked Egyptians to lose weight to save money after the price of fruit and vegetables skyrocketed after the government’s economic reforms slashed food subsidies.