Egyptian President Abdel Fattah al-Sisi swore in a heavily reshuffled cabinet on Wednesday, introducing new finance and foreign ministers in a bid to address ongoing economic challenges, daily power cuts, and the impact of the Gaza war on its border.
President Sisi reappointed Prime Minister Mostafa Madbouly last month following the resignation of the previous cabinet. Sisi emphasized that the new government must focus on reducing record-high inflation and increasing investment. Ahmed Kouchouk, a key negotiator with the International Monetary Fund (IMF) and former World Bank economist, has been appointed as the new finance minister. After being sworn in, Kouchouk reiterated Egypt’s commitment to fiscal discipline, reducing debt, and enabling private sector growth through structural reforms.
Rania al-Mashat, who previously served as the minister of international cooperation, has retained her role with added responsibilities for planning and economic development. The revived position of investment minister has been filled by Hassan El Khatib, who brings experience from the European Bank for Reconstruction and Development and a strong background in finance. Following these appointments, Egypt’s sovereign dollar bonds rallied, with longer-dated maturities seeing the most significant gains.
Gas Shortages and Economic Woes
Recent investments from the UAE, IMF, and EU have provided some relief from Egypt’s chronic foreign currency shortages. However, persistent power cuts and gas shortages continue to impact businesses and citizens alike. Karim Badawi, a manager at oil services firm SLB, has been appointed as the new petroleum minister and has stated that ensuring fuel supply to power stations will be a top priority. At the electricity ministry, Mahmoud Esmat, the former public enterprises minister, has replaced Mohamed Shaker.
Sherif Farouk, who oversaw reforms to pension payments systems as chairman of Egypt Post, has taken over as the new supply minister. His responsibilities include managing Egypt’s wheat purchases and overseeing a food subsidy program that feeds more than 60 million people. Given that Egypt is one of the world’s largest wheat importers, this program is crucial for the country and is a target for reform.
Over the past two years, as Egypt has struggled with a dollar crunch and high inflation, there has been speculation about the potential replacement of Prime Minister Madbouly himself. Analysts and business leaders argue that deep structural changes are necessary to stabilize Egypt’s economy. These changes include reducing the state’s and military’s control over the economy to allow more space for the private sector. Additionally, institutions need to focus on significantly increasing exports and tax revenue while investing in human capital. Mahmoud Mohieldin, a former Egyptian investment minister, highlighted the need for a new growth and development model during a speech at the American Chamber of Commerce in Cairo.
Military Changes and Political Landscape
In Egypt, ministers have limited decision-making power, with real authority residing with the presidency, military, and security services. The new cabinet was sworn in on the 11th anniversary of the day when President Sisi, then army chief, led the ousting of Egypt’s first democratically elected president, Mohamed Mursi of the Muslim Brotherhood. Since then, Sisi has overseen a broad crackdown on political dissent.
Several senior military positions were also reshuffled. General Abdel Majeed Saqr, the former governor of Suez, was appointed defense minister, while Lieutenant General Ahmed Fathy Khalifa replaced Lieutenant General Osama Askar as chief of staff. At the foreign ministry, Badr Abdelatty, who was Egypt’s ambassador to the European Union, took over from Sameh Shoukry. Shoukry was a veteran diplomat who had managed Egypt’s diplomatic efforts to mitigate the impact of the Gaza war.
The government faces the dual challenges of addressing economic pressures and maintaining political stability. The effectiveness of the new cabinet will be crucial in steering Egypt toward a more stable and prosperous future. With the new appointments, Egypt hopes to navigate through its current economic difficulties, ensuring a brighter outlook for its citizens.
Source: ReutersÂ
