Egypt: Sisi went to KSA for talks to alleviate Cairo’s perpetual debt crisis

Egypt’s Abdel Fattah al-Sisi made a surprise trip to Saudi Arabia Monday for talks with Crown Prince Mohammed bin Salman as Egypt continues its search for external financing to help alleviate its perpetual debt crisis.

The $3 billion International Monetary Fund deal that Egypt sealed in January warned that the country would still need to raise billions more in funding from Gulf states. That task has grown harder as Saudi Arabia has tightened its purse strings in recent months.

During their meeting, al-Sisi and bin Salman “affirmed mutual concern for promoting common cooperation in all fields,” according to the former’s spokesperson.

The talks also included security and intelligence officials such as Egyptian General Intelligence Authority head Abbas Kamel and Musaed bin Mohammed Al-Aiban, the Saudi national security adviser.

The trip comes amid a wider regional reconciliation, with both Cairo and Riyadh repairing ties with the regime of Syrian President Bashar al-Assad. Syria is set to be invited to next month’s Arab League summit in Riyadh, while Syrian Foreign Minister Faisal Mekdad traveled to Egypt over the weekend.

Iraq’s Speaker of Parliament Mohammed al-Halbousi also met with al-Sisi in Cairo Monday to discuss a growing tripartite partnership between Iraq, Egypt, and Jordan.

Egypt’s financial crisis

Oil-rich Saudi Arabia has long provided financial support to Egypt but recently signalled it would no longer provide such backing without conditions attached, which observers think may have sparked a rare media clash between the two countries.

Both Saudi Arabia and its Gulf allies have repeatedly come to Egypt’s help since Sisi led the ouster of Mohamed Mursi of the Muslim Brotherhood a decade ago.

When Egypt’s financial difficulties were exposed and exacerbated by the fallout from the war in Ukraine last year, Saudi Arabia, the United Arab Emirates and Qatar made deposits in Egypt’s central bank and pledged major new investments.

But those investments have been slow to materialise, putting new pressure on the Egyptian pound in recent weeks despite the currency’s losing nearly half its value against the dollar since March 2022.

Egypt signed a $3 billion rescue plan with the International Monetary Fund in December that targeted $9.7 billion in foreign direct investment in the financial year ending in June 2023.