According to Bloomberg article published on March 15, 2023, Saudi Arabia said it’s following through on financial pledges made to crisis-hit Egypt, without elaborating on the progress, amid concerns the kingdom is holding back on assistance partly due to the plunging pound.
The Gulf region’s biggest economy deposited $5 billion in Egypt’s central bank last year and, alongside Qatar, has earmarked more than $10 billion for its long-time ally. But so far, only $1.3 billion has come to fruition, when a unit of Saudi Arabia’s Public Investment Fund acquired state-owned stakes in four Egyptian companies.
“We have already” put money into Egypt, Saudi Finance Minister Mohammed Al-Jadaan said Wednesday in a conference in Riyadh, adding that the country’s track record speaks for itself.
Gulf Deposits Made Up Almost Half Of Egypt's Short-Term Debt
Egypt, one of the world’s top wheat importers, is under increasing pressure from the fallout from Russia’s invasion of Ukraine, which sent food and fuel prices soaring. The country is in need of foreign exchange and has overseen a series of devaluations of the pound, which lost about half its value against the dollar over the past year.
To shore up its finances, Egypt secured a $3 billion deal with the International Monetary Fund and has agreed to carry out a series of reforms.
Gulf countries are waiting for more certainty on Egypt’s currency and proof it’s making those reforms, Bloomberg reported last month. Talks with Saudi Arabia’s PIF over the purchase of Cairo-based United Bank have stalled over a disagreement about how to value the transaction.
“Egypt has great potential,” Al-Jadaan said, “They may face some difficulty but they have what it takes to be a great nation, a great country, a great economy.”
Securing Gulf funding is seen as “critical” for Egypt to bridge a funding gap of some $17 billion in the next few years, according to the IMF.
