President Abdel Fattah Al-Sisi was sworn in as Egypt’s new president on 8 June 2014. As easy as it is to spot the negatives and lowlights of his first year in presidency, it is also important to shed light on the main steps that were taken to improve the country’s economic situation.
Three main highlights were spotted, although not all of them have yet produced real results. But it has been said in many media outlets and by many Egyptians who are supporting Al-Sisi, that those will be the roads leading to success in the near future.
New Suez Canal project
The inauguration of the new Suez Canal project took place on 5 August 2014. On that day, Al-Sisi tightened the completion deadline for the project, calling on the army’s engineering corps, who will supervise the project, to conclude the project in one year instead of the previously scheduled three-year timeline.
Celebrations for the finalisation of this mega national project are expected to take place in August of this year, or in about 54 days.
In May 2015, Chief-of-Staff of the Armed Forces’ Engineering Authority Major General Kamel Al-Wazeer declared that dry digging of the new Suez Canal project has been completed. He added that 67% of the saturated sand water has been dredged and will be completed by next July.
The new canal will be established to increase the Suez Canal’s capacity to 97 passing ships per day, up from the current rate of 49 per day. The project would involve 35km of dry digging and 37km of “expansion and deep” digging.
Upon completion, the project would see canal revenues increase by 259%, up from current annual revenues of $5bn, according to Suez Canal Authority Chairman Mohab Memish.
The government had refused foreign participation in funding the project, with Al-Sisi stressing that only national banks, companies and investors can finance it. On 1 September 2014, Al-Sisi approved the Suez Canal investment certificate law, to access the necessary funds for the project.
After that Suez Canal certificates were issued for sale, in less than 14 days they collected an amount of EGP 64bn.
Egyptians however are still waiting to see the actual results of this mega project, where everything will be clearer after the actual launch in August.
Smart card system for subsidised bread
A new smart card system for distributing subsidised bread was successfully implemented by the Ministry of Supply, in Al-Sisi’s first year in power. The system failed during Hosni Mubarak and Mohamed Morsi’s regimes. The new system has helped save a lot of money and saved people from the torture of waiting for hours in long queues for buying bread.
With the new system, families use smart cards allowing them to buy five loaves of bread each per day. Moreover, bakeries are paid for the subsidised loaves they sell, instead of giving them specific amounts of cheap flour.
The new system aided in eliminating the amount of wheat and bread wasted under the old system, saving an amount valued at approximately EGP 11bn, Minister of Supply Khaled Hanafy revealed in mid-May 2015.
The Economic Summit
The Economic Summit was Egypt’s gateway to luring in foreign investments to the country. The event took place in Sharm El-Sheikh in mid-March.
About a hundred countries participated in the conference alongside 2,500 investors as well as 30 presidents, kings and princes.
Deposits worth $6bn were received by the Central Bank of Egypt (CBE) from three Gulf monarchies in April on the back of pledges made during the summit.
Saudi Arabia, Kuwait and the UAE fulfilled their pledges made at the summit, sending $2bn each in deposits to Egypt.
Prime Minister Ibrahim Mehleb announced Tuesday evening that the total amount of Foreign Direct Investment (FDI) entering the country in nine months stood at $5.7m, television channel CBC reported.
Meanwhile, the collective value of signed agreements and investments made during the Economic Summit totalled $38.2bn, Minister of Investment Ashraf Salman announced during the Summit’s third day.
The value of investments in Memoranda of Understandings (MOUs) totalled $15bn, while ones pertaining to installations and supply are valued at $18bn. The loans and grants provided amount to $5.2bn, Salman added.
The total value of the signed MoUs has been announced at $92bn.
On paper, the numbers reflect a great success, although none of the MOUs have to date been turned into real deals. Egypt’s New Capital project, for instance, was one of the MOUs signed with an Emirati partner, but the deal has until now not been sealed.
Salman announced in late March that the government is expecting $6bn-$8bn in direct foreign investments by the end of the fiscal year (FY) 2014/2015. This comes despite constant government announcements on the improvement of Egypt’s investment environment.
It is the first time the government official has lowered the target expected from $8bn.
So the question remains, was the Economic Summit not a success after all?