AmCham Egypt
Limited Special Mission to Washington D.C.

March 17-23, 2024

A limited delegation of Board Members and senior executives representing AmCham Egypt visited Washington, D.C. for a Special Mission during March 17-23, 2024.

Over the course of five days, delegates took part in more than 30 meetings with Members of the United States Congress, Administration and Executive Branch officials, think-tanks, senior media representatives, and leaders from the U.S. business community. The itinerary featured eight meetings with Congress Members and their staffers, including senior representation from the House Foreign Affairs Committee and Senate Armed Forces Committee, as well as six meetings with the Executive Branch, including senior officials at the Departments of State, Treasury and Defense. Delegates also met with the U.S. International Development Finance Corporation (DFC) and the U.S. Agency for International Development (USAID).

In addition, the delegation met with senior representatives at Washington’s prominent think-tanks and multinational financial institutions, including the World Bank, International Monetary Fund (IMF), Carnegie Endowment for International Peace, Washington Institute for Near East Policy, Congressional Research Service (CRS), Atlantic Council, Center for Strategic and International Studies (CSIS), and Middle East Institute (MEI), among others.

The mission took place at a critical time for the Middle East, the U.S and Egypt. Regionally, global attention is focused on the Israel-Hamas War and related developments. The AmCham delegates arrived two weeks after President Biden ’s annual State of the Union address, amid yet another clash between the White House and Congress over the Federal budget, with both political parties gearing up for the 2024 election cycle. And while the delegation was in Washington, details of the $35 billion Ras El-Hekma project, USD 8 billion IMF agreement and other measures to alleviate Egypt ’s challenging financial position were becoming public.

During their meetings, delegates promoted dialogue on important commercial issues and shared their perspective on social and political topics of bilateral importance. The impact of external global shocks, the current regional war and other geopolitical challenges on Egypt’s economy was a common topic in all meetings.

Members of the delegation provided an overview on key developments on the economic front and reflected on their impact on private sector operations and Egypt’s ability to attract foreign direct investments. These updates included:

• The March 6 decision by the Central Bank of Egypt (CBE) to raise benchmark interest rates by 6% and fully float the Egyptian currency.
• The USD 35 billion Ras El-Hekma deal that gave Egypt the liquidity needed to undertake the currency float.
• The announcement of an IMF staff-level agreement to increase Egypt’s current USD 3 billion Extended Fund Facility to a total of USD 8 billion.
• Additional financing from multilateral and international partners, such as the European Union, World Bank, Japan, United Kingdom, and others.
• The Egyptian Government’s plan to improve fiscal and monetary discipline, with structural reforms that are set to restore global and local confidence in Egypt’s economy.

The delegation also highlighted the government’s efforts to set up regulatory mechanisms aimed at limiting the public sector role and expanding the private sector’s role in the economy. These efforts include slowing public investments and national projects by state-owned enterprises (SOEs), economic authorities, and other public entities, and establishing the Central Audit Authority with the mandate of limiting public investments to EGP 1 trillion a year, as recommended by the IMF.

The delegation discussed other reform measures being put into place to ensure a level playing field and added that the government is prioritizing efforts to reduce inflation.

Delegates also shared that Egypt is being uniquely challenged by the Suez Canal disruptions caused by the Houthi hostilities in the southern Red Sea, which have caused all major shipping lines to divert their vessels from the Suez route to the much longer Cape of Good Hope route around the southern tip of Africa. As a result, the Suez Canal has seen a 50% reduction in transits, amounting to around $5 billion in losses on an annualized basis.

Egypt’s economy is also under pressure from the recent influx of refugees fleeing Sudan’s ongoing civil war, adding to the more than 10 million refugees already residing in Egypt and integrated in the economy. The delegation called for the U.S. to consider these pressures in assessing potential support programs to Egypt.

In meetings with the IMF and associated organizations, there was a consensus that Egypt’s reform efforts must focus on privatization, to include reducing the role of the government in the economy, reducing the number of large-scale national projects, creating a better investment climate, empowering and ensuring a level playing field for the private sector, and creating conditions for sustained macroeconomic stability.

In the atmosphere of a new IMF agreement, the delegation sensed an eagerness from several U.S. Government agencies to pursue opportunities in Egypt and encourage more direct investment by U.S. firms. The DFC expressed interest in engaging in a pipeline of projects in sectors they see as most promising, including tourism, healthcare, education, agriculture, renewables, and transportation. The DFC was particularly interested in offering assistance to Egyptian businesses, especially small and medium-sized enterprises (SMEs), through EGP-denominated loans. The U.S. Treasury Department expressed full support of the IMF agreement, which they believe will offer Egypt a unique opportunity to turn the corner and generate sustained economic growth.

During their meeting with the AmCham delegates, representatives from the U.S. State Department’s Bureau of Energy Resources noted that lowering methane emissions and lowering flaring was a priority, and that methane leaks should be addressed immediately. Delegates also discussed Egypt’s green hydrogen production opportunities, and the incentives for foreign investment in the Inflation Reduction Act, which sets very high standards and makes it very hard for developers not to compare with other opportunities.

The announcements of the IMF agreement, Ras El-Hekma investment, several SOE divestitures and other positive measures came at an opportune moment and has now allowed the economic crisis to take a back seat and Egypt to resume its traditional position as a regional leader. The delegation sensed a strong appreciation of Egypt ’s strategic importance, with the country viewed as indispensable to advancing peace in the Middle East.

Several events were held on the margins of the visit:

• A special reception hosted by the U.S. Chamber of Commerce on March 19, in honor of the AmCham Egypt delegation and featuring remarks by Ms. Suzanne Clark, President and CEO of the U.S. Chamber of Commerce.

• A limited dinner for the AmCham Egypt Inc. Advisory Board and the AmCham Egypt Board hosted on March 21.

• A special breakfast briefing hosted by the U.S. Chamber on March 22, featuring remarks by Mr. Curtis Dubay, Chief Economist, and Ms. Ashlee Rich Stephenson, Senior Political Strategist.

Overall, the delegation ended their mission with a sense of optimism that Egypt has a lot of support on the highest levels. The delegation noted that Congress, the Executive Branch and the think tank community continue to perceive AmCham Egypt as a strategic partner for advancing peace in the Middle East, and an independent and credible voice with which they can have an honest and open dialogue. AmCham Egypt’s U.S. affiliate – AmCham Egypt, Inc. – will be maintaining regular dialogue with stakeholders in Washington and communicating Egypt’s ongoing economic developments.