Egypt inks ‘historic’ $35bn deal with UAE, hoping to ease dollar squeeze, save economy – The North Africa Post

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Egypt and the United Arab Emirates (UAE) have signed a landmark $35 billion funding deal to develop Ras al-Hekma peninsula on the Mediterranean coast that, economists say, will inject $35 billion of international direct funding into the struggling Egyptian economic system, serving to it to bolster financial development and tackle a tough foreign money disaster.
The deal is the most important international direct funding in an city improvement undertaking in Egypt’s fashionable historical past, Prime Minister Mostafa Madbouly stated on Friday (23 February) after weeks of hypothesis. It’s a partnership between the Egyptian authorities and an Emirati consortium led by ADQ, he added. The nation’s essential recipe for attracting international capital has relied on making huge bets on pure gasoline exploration, increasing the Suez Canal, increasing tourism infrastructure in a restive area, and pouring billions of {dollars} into megaprojects, most notably an enormous new administrative capital. However now that this recipe has stopped working and Cairo could also be hesitant to implement reforms of the nation’s military-dominated financial mannequin as demanded by the IMF in trade for a bailout, the federal government is doubling down on the identical method.
In the meantime, information in regards to the sale has triggered condemnation by critics of the federal government, who blame it for promoting what’s the land in one in all Egypt’s most dear coastal places and that it must be developed by native traders. However Madbouly sought to alleviate these issues by saying that the Egyptian state could have a 35% share of the earnings from this undertaking, though it’s a non-public funding with the vast majority of shares held by the UAE consortium. Based on Khaled Ikram, an economist and former director of the World Financial institution Egypt division, “this occasion ought to strengthen the hand of the Egyptian authorities in negotiations with the IMF.” The deal ought to “ease up on fears of Egypt’s defaulting on its exterior obligations” in addition to “reassure collectors and traders that they need to cease talking of waning assist for Egypt’s economic system from the Gulf nations,” Ikram added.

Supply: north africa post

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