Egypt overhauls cabinet as economic pressures, power cuts persist

Sovereign bonds rally as deputy finance minister Kouchouk promoted and new ministers sworn in

By Reuters

Published: Wed 3 Jul 2024, 4:02 PM

Last updated: Wed 3 Jul 2024, 4:15 PM

Egyptian President Abdel Fattah Al Sisi swore in a reshuffled cabinet on Wednesday that includes new finance and foreign ministers in a government facing challenges including the Gaza war on its border, economic woes and persistent power cuts.

When the resignation of the previous cabinet was announced a month ago, Sisi reappointed Prime Minister Mostafa Madbouly and said his new government should focus on lowering inflation and regulating markets as well as boosting investment.

Sworn in as the new finance minister was Ahmed Kouchouk, formerly deputy finance minister and facing perhaps the biggest challenge in managing a stumbling economy and a debt burden that has soared in recent years.

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Egypt's sovereign dollar bonds rallied on Wednesday, with the longer-dated maturities gaining the most. The 2047 maturity rose by 1.96 cents to trade at 75.16 cents on the dollar by 1124 GMT.

At the foreign ministry, Egypt's ambassador to the European Union, Badr Abdelatty, replaces Sameh Shoukry, a veteran who has steered Egypt's diplomatic efforts to contain the impact of the war in Gaza.

Karim Badawi was appointed petroleum minister, Mahmoud Esmat electricity minister and General Abdel Majeed Saqr defence minister.

SUBSIDY REFORM

Ministers in Egypt have limited decision-making authority, with real power residing with the presidency, military and security services.

Rania Al Mashat, former minister of international cooperation, was re-appointed minister for planning, economic development and international cooperation.

Sherif Farouk, chairman of Egypt Post, takes over at the supply ministry, which manages wheat purchases. Egypt is one of the world's biggest wheat importers.

Farouk will also be tasked with overseeing a sprawling food subsidy programme that feeds more than 60 million people and that the government has signalled it will reform.

As Egypt tried to manage a chronic foreign exchange shortage and high inflation over the past two years, there had been speculation that Madbouly himself could be replaced.

Earlier this year, the country signed a record investment agreement with the United Arab Emirates and international funding deals including an expanded loan programme with the IMF. On Tuesday, another investment deal was announced for a high-end development on the Mediterranean coast.