As per the directive given by Saudi Crown Prince Mohammed bin Salman, his country’s sovereign wealth fund, the Public Investment Fund (PIF), will be investing $5 billion into Egypt in a first investment phase.
The move comes after the Saudi Crown Prince met with Egyptian Prime Minister Mostafa Madbouly, the Egyptian cabinet said in a statement.
In August, Saudi investment minister Khalid Al Falih said that the kingdom planned to convert its $10 billion deposit with the Central Bank of Egypt (CBE) into an investment.
UAE sovereign wealth fund ADQ agreed to invest $35 billion in February to develop Ras El Hekma on the north coast. This deal included $11 billion of UAE central bank deposits converted to local currency for investment.
The Saudi Egyptian Investment Company (SEIC), a subsidiary of the PIF, acquired minority stakes in August 2022 in four Egyptian state-owned companies, including E-Finance, for $1.3 billion.
Riyadh’s long-term deposits with the Egyptian apex bank stood at $5.3 billion as of December 31, 2023, Reuters reported, citing CBE data.
Egypt’s new cabinet, formed in July, wants to treble foreign direct investment (FDI) into the country from the record $10 billion of FDI inflows recorded in 2022–23.
The ambitious target of $30 billion in FDI during the current financial year, which began on July 1, has been set as Egypt cuts budgets and slows down state spending projects.
Finance minister Ahmed Kouchouk has announced that Egypt’s total budget deficit was EGP505 billion ($10.5 billion) in 2023/24 with a primary surplus of EGP857 billion.
The cabinet hopes to keep this surplus high to bring Egypt’s debt-to-GDP down from more than 90 percent to below 80 percent by 2027.
