While Egypt’s Sisi spends on almost futile mega projects, the Egyptians people are suffering the consequences of his wrong economic policies, notably the escalating external debt catastrophe.
Sisi spends loans lavishly on useless mega projects, most notably a new administrative capital, new presidential palaces, new presidential planes, bridges, monorails, largest mosque, tallest building, and the like.
In early February, Bassam Rady, the spokesperson for the Egyptian presidency, announced a new project on his official Facebook account, that is, building what is believed would be the largest mosque in the world:
Rady’s Facebook post read: The Egypt Mosque in the new administrative capital, one of the largest mosques in the world, with a capacity for 107,000 worshippers. Its minaret will reach a height of 140 meters. It includes a range of huge halls for celebrations, events, and spaces for Quran recitation for men, women and children. It also has parking space and a multi-storey car park for 3,000 cars.”
At the time, many Egyptian users of social networking sites called the project a waste of public money, at a time when Egyptian hospitals were overwhelmed due to soaring cases of Covid-19.
Also, Human rights defender and journalist Haytham Abokhalil condemned the project on Twitter:
Haytham Abokhalil’s tweet reads: “Another mosque in the administrative capital at a cost of 750 million pounds. This is different from the Fattah al-Aleem mosque that cost hundreds of millions and has a capacity for 17,000 worshippers… This is insanity in a country that does not have beds for coronavirus patients and people dying on inadequate train lines and light poles that are not effectual in the rain.”
Yesterday, 20 September, Selim Azouz, an Egyptian journalist, tweeted saying: “Egypt’s largest mosque in the new administrative capital cost nearly a billion Egyptian pounds in a barren desert. An elected ruler would not build such mosque, such capital, such bridges, and such palaces; would not buy such planes with anti-missile systems to protect those onboard, and would not need to build a chain of prisons costing 28 billion Egyptian pounds.”
The Egyptian government has invested in a series of high-profile infrastructure projects – with the new administrative capital perhaps the most prominent.
The new capital is currently being built in the desert 45km east of Cairo, where private construction companies are hard at work under the supervision of the army.
The new administrative capital project aims to house the government, a presidential palace, the supreme court and the central bank, as well as an airport and a business district.
The $45bn project is expected to be about the size of Singapore and has raised many concerns over its economic feasibility.
Egypt’s mounting debt crisis
Egypt’s debt, which has been sharply increasing in the past decade, is set to reach record levels by the end of this year.
With the markets still feeling the sting of the Covid-19 pandemic and now the ripple effect of Russia’s war on Ukraine, this will only add trouble to the country’s economy.
By the end of the 2020/2021 fiscal year, Egypt’s total debt reached $392bn. That includes $137bn in external debt, which is four times higher than in 2010 ($33.7bn). It also includes $255bn in internal debt, according to the Central Bank of Egypt, almost double domestic debt in 2010.
External debt has been growing rapidly since Egypt’s Abdel Fattah al-Sisi came to power officially in 2014. It stood at $46.5bn in 2013, then declined to $41.7bn in 2014 before surging in the following years, reaching $84.7bn in 2016, $100bn in 2018 and $115bn in 2019.
The ratio of the foreign debt to gross domestic product (GDP) is now 33.9 percent, which is relatively within safe limits according to international standards, which consider the ratio safe so long as it is below 60 percent.
Egypt is going to crash: Former Minister
Yehia Hamed, Egypt’s former investment minister, in July published an article on Middle East Eye, suggesting that “Egypt urgently needs a lifesaving plan which radically breaks away from the destructive strategies of the regime and its international backers.”
In his article, Mr. Hamed who served in the democratically elected government of Mohamed Morsi who was overthrown in a coup led by Sisi in 2013, says that “due to the incompetence of Al-Sisi’s regime and the short-sightedness of his international backers, the severe deterioration of the economy actually started years ago,” not only since the Russian invasion of Ukraine started last February, with its devastating impacts on wheat-importing countries, especially Egypt.
“The war in Ukraine has only unmasked it and shed light on the crude reality: Egypt is just a few months away from bankruptcy and the 30 percent poverty rate will soon turn into an unbearable hunger rate,” Hamed added.
Mr. Hamed says that this dire situation is “the result of nine years of incompetent rule by Sisi and his cronies. Despite – or probably because of – having full control over the judiciary, the budget and the military, and despite the widespread and systematic repression against all dissident voices, leading to the arbitrary detention of more than 60,000 political prisoners, Sisi has – aided by his international backers – literally ruined the country,” he said.
“And yet, Egypt’s economic situation is desperate. The debt-to-GDP ratio has risen to 93.8 percent this year and a mind-blowing 54 percent of the state’s budget alone is swallowed by loan and interest repayments, which does not leave much to fund the country’s essentials,” the former investment minister added.