In this regard, Egyptian media reported that Ras El-Hekmah region on the Mediterranean coasts is to be sold to Emirati investors for $22 billion, an amount that, according to them, is to help reduce Egypt’s foreign currency deficit.
This region is part of Marsa Matruh city in Matruh province. Its coastal line is 50-kilometers long and is one of the world’s most pristine coasts with white sands and turquoise water.
The government of President Abdel Fattah el-Sisi has included the region in its urban development project for the northwestern coast, which is scheduled to be completed by 2050.
Al-Arabiya news network reported on Thursday that “there are credible reports” that a group of Emirati investors will sign a deal with the Egyptian government next week to buy Ras El-Hekmah lands to build a big resort city there.
Indeed, sale of islands in Egypt is not new, and el-Sisi has already showed such generosity to his Arab friends. For example, in 2016, he sold to Saudi Arabia the two strategic Red Sea islands of Tiran and Sanafir under a deal. When people protested the deal, the government argued that the islands were originally Saudi and in 1950, the Arab kingdom asked Cairo to deploy military forces to them to protect the monarchy. After the deal was finalized, the parliament said that the transfer of the islands to Saudi Arabia was within its mandate.
Now that foreign currency deficit and the resultant high inflation are putting the government in an economic predicament, the government of el-Sisi once again sees the solution in selling another part of the nation’s islands to foreign investors.
According to official data, Egypt’s inflation rate in August last year was nearly 40 percent, forcing many Egyptians under the poverty line.
Island sales for ending currency crisis
In recent days, currency fluctuations in Egypt have been so high, and the national currency has set a record low against the US dollar. According to Exchange Today, each US dollar rate in forex market on Monday was traded for 65 Egyptian pounds, the record low in history of Egypt.
Cairo 24 news website reported that Egyptian banks refuse dollars with unidentified sources and ration dollar distribution only based on the basic needs. According to informed sources, new measures have been taken by the central bank to deal with the crisis of dollar price surge in black market. This has led to an increase in the price gap between the official price, which is close to 31 pounds, and the price of the black market, which has exceeded 50 pounds per dollar. A few days ago, the central bank introduced new regulatory controls for banks to combat money laundering and financing of terrorism and canceled the regulations of 2008 and gave the banks a deadline to reform their operations.
Foreign debt has quadrupled to $164 billion during almost 10 years of el-Sisi’s presidency. Egypt’s total foreign exchange reserves are $35 billion, but in 2024 alone, the government will have to pay creditors $30 billion in interest. According to the report of the central bank, the ratio of short-term debts to foreign currency reserves exceeded 80 percent in 2022, which is double that of 2021.
This situation has caused Cairo to even apply for more loans from foreign creditors. The reports related to the sale of lands to foreigners coincided with the visit of a delegation from the International Monetary Fund (IMF) to Cairo to review the Egyptian reforms that will make them eligible to $10 billion in bailout package— something injecting optimism in Egypt about curbing further pound value drop.
IMF director Kristalina Georgieva on Thursday said that talks with Cairo over the loan were at their final stage.
In the meantime, the public belief is that the devaluation of the pound was one of the conditions of the IMF and as a result of the reforms requested by this institution to carry out the economic austerity plan, but el-Sisi delayed it for concerns about the possible impact of this action on the results of the presidential elections he won in December. This is the fourth IMF package to Egypt in the past six years, under which Cairo agrees to a set of strict conditions, including a single currency rate and reducing the army’s role in the economy.
“Was Ras El-Hekmah el-Sisi’s family inheritance” to give it away?
Reports of el-Sisi’s sale of the island to the UAE for $22 billion has caused a backlash among the Egyptian public, especially that experts have recently reported that the measures of Emirati investors have caused a major environmental damage to Egyptian coasts as they run another project in the resort village of Sidi Abd El-Rahman.
Pro-government media, however, tried to label the news of the deal as rumors.
Egyptian talk show host Ahmed Moussa, who is also known as the government mouthpiece and apologist, said on Thursday that a deal was underway allowing investment in Ras el-Hikmah to “end the exchange rate crisis”. He claimed that the deal would attract $20 billion in “direct investment and foreign financing” and that the sale of Ras al-Hikama was a “hoax.”
Cairo 24, which is also pro-government, reported that government sources made it clear that currently there is no agreement with UAE businessmen to sell lands in Ras el-Hikmah.
Critics, however, continue their attacks on the government. Hisham Sabri, a former security official who is now an el-Sisi detractor, called Ras el-Hikmah a “paradise on earth”, adding that “I seriously cannot support el-Sisi’s catastrophic actions. He is moving to the crash with 250 kilometers per hour.”
Actor and filmmaker Amr Waked also criticized el-Sisi in response to the Island deal report.
“Who gave the right to sell Ras al-Hikma to Abdel Fattah al-Sisi?” Was it his mother’s inheritance or his father’s?,” he said.
Mamdouh Hamzeh, another critic of el-Sisi, said the project should be handed over to Egyptian investors rather than foreign developers.
Describing the resort city the “most beautiful coast of
Egypt”, Hamzeh said: “It would be wiser for the project to be developed
by Egyptian developers capable of paying dollars. Because in this case,
the capital will stay in the country. Foreign developers transfer out of
the country the profit in foreign currency multiple times the price of
the land.”
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