Egypt's Economic Challenges: Lessons from Lebanon

Report by Lea Fayad, English adaptation by Nadine Sassine 

 

If you see what's happening in Egypt, you would say they're following in our footsteps; just like us, Egypt is facing a dollar shortage crisis.

The national currency has plummeted to over 60 Egyptian pounds to the dollar in the black market, while the official rate at banks is around 31 pounds. Just like our completely collapsed currency after the 2019 crisis when it reached 89,000 pounds to the dollar in the market, while the bank rate was 15,000 pounds to the dollar.

Egyptian banks, like Lebanese banks, have imposed limits on withdrawals and the use of electronic cards. Many projects have decided to shut down, and foreign investments are fleeing because there's no way to continue amidst financial instability and lack of trust in the country. In Lebanon, foreign investments have dwindled close to zero.

Ironically, even the solutions the Egyptian officials are implementing were previously adopted by us, such as using security forces to suppress currency traders and providing allowances without a scientific study on employees' salaries. These steps haven't brought us any closer to a solution because they don't address the problem of the dollar shortage and currency collapse, which require reforms and restoring confidence in financial and economic policies.

So, dear friends in Egypt, learn from experience. We haven't implemented reforms yet and scrapped the agreement with the International Monetary Fund. On the other hand, Egypt has now advanced in negotiations with the IMF to release substantial financial assistance (according to the IMF director) in exchange for implementing reforms, the most important of which is unifying the exchange rate to end the chaos in the market and restore confidence, foreign investments, and dollars to the country.

What do you think? Will Egypt succeed where Lebanon failed?