Egypt rife with speculation over cabinet reshuffle after El Sisi's swearing-in ceremony

Prime Minister Mostafa Madbouly's government has seen Egypt plunged into worst economic crisis in decades

Egypt's President Abdel Fattah El Sisi shakes hands with Parliament Speaker Hanafi El Gebali during the former's inauguration for a third presidential term. AFP

Speculation about a possible cabinet reshuffle swirled in Egypt on Wednesday, a day after President Abdel Fattah El Sisi was sworn in for a third and final six-year term.

It was business as usual, however, at the weekly meeting of Prime Minister Mostafa Madbouly's cabinet.

A statement issued later made no mention of the cabinet presenting its resignation to the President, as is customary at the start of a new presidential term.

Sources, however, said the 38-member cabinet was expected to do so within days and that the new one is likely to have as many as 10 new ministers.

Sameer Farag, a television pundit who is close to authorities, told a popular television talk show on Tuesday night that a cabinet reshuffle would soon be announced and that there would also be changes among the governors of the country’s 27 provinces.

Mr Madbouly has been Prime Minister since 2018.

During his time in office, Egypt has been plunged into its worst economic crisis in living memory, with the local currency losing about 70 per cent of its value, inflation reaching record levels and a shortage of foreign currency hitting local manufacturers hard.

Like Mr El Sisi, the Prime Minister has doggedly insisted that the crisis was due to the downturn caused by the coronavirus pandemic and later the Russia-Ukraine war.

The economy was further shaken by the war in neighbouring Gaza.

The conflict in Sudan, Egypt’s neighbour to the south, has also affected the economy, with nearly 500,000 Sudanese talking refuge in the country over the past 11 months.

However, critics have maintained that the crisis was mostly caused by a series of multibillion-dollar infrastructure projects they deemed either unnecessary or less important than the overhaul of vital sectors such as health and education.

Best illustrating this was Mr El Sisi’s swearing-ceremony on Tuesday at the New Administrative Capital in the desert east of Cairo. The $58 billion, ultra-modern city has been Mr El Sisi’s pet project and is one of at least a dozen new cities being built across Egypt.

Critics also complain of excessive government borrowing that has tripled the foreign debt to a record $165 billion over the decade Mr El Sisi has been in office.

But in a change in economic fortunes, Egypt received more than $50 billion in loans and investment deals in the first quarter of 2024, enough to ease the foreign currency shortage and jump-start the economy.

The bailout and investment came from several sources, including the UAE, the EU and the World Bank. It has prompted financial services companies to raise Egypt's credit ratings after repeated downgrades that undermined the nation’s credit.

More good news on the economy emerged on Wednesday when the central bank said that Egypt's net foreign reserves had risen by more than $5 billion to $40.361 billion in March compared to the previous month.

The benefits of the infusion of funds have yet to be felt by the millions of Egyptians in the poor and middle classes who have been crushed by skyrocketing food prices and more expensive utilities.

Mr El Sisi won a December election with more than 89 per cent of the vote. He ran against three obscure politicians who refrained from directly criticising the incumbent during their lacklustre campaigns.

Ahmed Tantawy, an outspoken former lawmaker who could have posed a serious challenge to Mr El Sisi, failed to meet candidacy requirements, something he and his supporters blamed on a campaign of intimidation orchestrated by the authorities.

Mr Tantawy was charged in November with illegally circulating election materials and received a suspended one-year sentence in February. He has also been banned from running for office for five years.