Egyptian President Mohamed Morsi’s visit to Italy has borne fruit, with Rome agreeing to invest a total of 800 million euros ($1.04 billion) in Egypt, the state-owned Al-Ahram newspaper reported on Saturday.
The report gave few details of how the sum will be invested.
Morsi met with his Italian counterpart Giorgio Napolitano on Friday and made a joint declaration to boost bilateral relations and promote economic cooperation and trade between the two countries.
The Egyptian president also met on Thursday with leading Italian businessmen including Giorgio Squinzi, the president of business association Confindustria, as well as chief executives from ENI, ENEL and FS railways, according to local news agency ANSA.
In May, the Egyptian government signed an agreement with Italy to swap a third tranche of the North African country’s debts worth $100 million for Italian investments in Egypt.
Morsi has been on the hunt for foreign investment over the last few weeks.
During a presidential visit to China in late August, Asia’s largest economy agreed to give Egypt 450 million yuan (LE430 million) to finance infrastructure, electricity and environment projects, as well as donating 300 police cars.
The chairman of Egypt’s National Bank, Tareq Amer, and his Chinese counterpart also signed a deal for a $200 million concessional loan to support small and medium size projects in Egypt.
- Qatar to invest $18bn in Egypt over next 5 years (alethonews.wordpress.com)
- Egyptian president heads to China for investment talks (alethonews.wordpress.com)
- Morsi: ‘New’ Egypt is open for business (morningstaronline.co.uk)
Qatar will inject $18 billion worth of investments into Egypt over the course of the coming five years, Hamad Bin Jassim, the oil-rich gulf state’s foreign minister, said at a press conference in Cairo on Thursday.
Of the pledged investment, some $8 billion will be allocated to electricity and natural gas projects in areas east of the Suez Canal, where Egypt has longstanding plans to build a massive industrial city. Another $10 billion will go to a planned tourist resort on Egypt’s north coast.
In yet another indication of new found warmth between the two nations, Egyptian President Mohamed Morsi met with Bin Jassim following the latter’s arrival to Cairo on Thursday.
In early August, Qatar pledged to deposit $2 billion in the Central Bank of Egypt (CBE) as a means of easing the country’s balance-of-payments deficit. The promise was made following a visit by the Emir of Qatar, Sheikh Hamad bin Khalifa Al-Thani, to Egypt, where he too met with Morsi.
Later in August, Qatar deposited the first tranche – worth some $500 million – in the CBE.
Egyptian Prime Minister Hisham Qandil, for his part, said at a Thursday press conference that Qatar would transfer the rest of the pledged $2 billion in three installments within the next two-month period.
In 2011, Qatar had said it would provide Egypt with a $10 billion grant, with which to support Egypt’s post-revolution economy, but only ended up disbursing $500 million later in the year.
Qatar’s name has begun to resonate among Egyptian business circles, with Qatar’s National Bank recently offering to buy a controlling stake in National Societe Generale Bank, one of Egypt’s largest private lenders.
British officials refrain from giving full backing to Egypt’s $4.8 billion loan request, having previously supported such funding under military rule
London – The United Kingdom has refrained from backing Egypt’s request of a $4.8 billion loan from the International Monetary Fund (IMF).
“We prefer to wait and see the results of the negotiations between Egypt and the IMF,” a UK Foreign Office spokesperson told Ahram Online.
During her recent visit to Cairo, the IMF’s managing director, Christine Lagarde, received a formal request from Egypt for a $4.8 billion loan.
“The UK thinks that this is a good opportunity for dialogue between the two parties,” the spokesperson added.
Asked whether the UK would back the Egyptian request if the IMF board decides in its favour, the spokesperson replied: “We do not have anything to say for the time being.”
The UK’s caution seems to mark a significant change in its attitude towards Egypt’s calls for international assistance to overcome its economic difficulties.
The UK provides 5 per cent of the IMF budget, making it the fourth biggest contributor, with equivalent voting power. It follows the US (18 per cent), Germany (6 per cent) and Japan (6 per cent).
Early this year, the UK government was enthusiastic about an IMF offer of a $3.2 billion loan at a 1.5 per cent interest during Egypt’s period of direct military rule.
A high level UK diplomat then told Ahram Online that the offer was “an amazingly good deal” with “virtually no conditionality.”
UK support at the time followed a meeting of British representatives with the Supreme Council for Armed Force (SCAF), which until July 2012 had veto power on all political decisions.
The diplomat explained that his government felt the deal the IMF put to Egypt was very favourable.
Speaking this week, the Foreign Office spokesperson insisted there was no change in the UK positions on the IMF loan after President Morsi took the reins of power from SCAF.
During her visit to Egypt last Wednesday, Lagarde met Morsi and his prime minister Hesham Kandil, and praised the Egyptian vision for reform.
“We are impressed by the strategy that President Morsi and Prime Minister Kandil have proposed during our meetings today,” she said at a joint press conference with Kandil.
An IMF technical team is due to arrive in Cairo in early September to begin work on arrangements for the mooted loan.
“We prefer foreign borrowing at this stage given the low interest rate of the IMF loan compared to much higher rates when borrowing domestically,” said Kandil, on the matter.
He added that borrowing domestically would crowd out the private sector and the IMF loan would help ease liquidity problems.
The IMF said in a statement it had maintained close dialogue on economic policy with Egyptian authorities since the start of the transition period in February 2011. It said it has also provided considerable technical assistance upon request from the government.
- Egypt requests $4.8bn IMF loan (alethonews.wordpress.com)
- IMF hopes to sink claws into Egypt (morningstaronline.co.uk)
- Egypt to get IMF technical team in September, says Managing Director Christine Lagarde (bikyamasr.com)