Egypt: Suez Canal chief seeks to dispel fears over draft Egypt law

Posted On 23 December 2022

Number of times this article was read : 396

The chairman of Egypt’s Suez Canal on Thursday affirmed the waterway is “not for sale”, in a bid to allay fears over a draft law under discussion in parliament. On Tuesday the legislature approved in principle a bill proposed by the government seeking to establish a sovereign wealth fund “that can carry out all economic and investment activities” for the Suez Canal Authority.

The draft bill has sparked wide debate on social media. Many fear the fund would undermine the state’s sovereignty over the waterway which accounts for roughly 10 percent of global maritime trade and is a vital source of foreign currency for economically-battered Egypt.

Suez Canal Authority chairman Osama Rabie said in a news conference on Thursday that the canal cannot be “sold, leased or borrowed for collateral”. He added the purpose of the fund is to invest in mega-projects. The proposed bill comes with Egypt’s economy struggling under growing foreign debt, and the local currency plunging against the dollar.

In October the government said Egypt had clinched a $3 billion loan deal with the International Monetary Fund conditioned on a currency depreciation and state subsidy cuts. Economist Hani Tawfiq suggested in a Facebook post that the purpose of the proposed sovereign fund would likely be to “exchange state debt for bonds issued by the fund (and) guaranteed by Suez Canal revenues”.

Rabie nonetheless denied this in his press conference. He said the purpose of the fund was to draw foreign investment. But the bill has already provoked widespread anger among Egyptians on social media, where it was among the top trending topics all week. Former Suez Canal chairman Mohab Mamish said the new law would be “impossible to implement and opens the door to unprecedented changes… that allow for the presence of foreigners in the Suez Canal’s  management”.

The foreign investors could “change the system upon which the canal’s management has been based for years and which has returned record profits”, Mamish said in remarks published by local media.

AFP
Other Articles in this Week's Issue<< Tunisia’s UGTT labor union urges action to end political stalemateSahel: Security conditions to worsen in northern Mali as peace deal collapses >>
The North Africa Journal's WhatsApp Group
.

Most Recent Stories from the Region

Book: Lafarge Group and the Islamic State

Book: Lafarge Group and the Islamic State

Lafarge’s indictment for financing terrorism reveals corporate entanglements with ISIS to maintain operations in Syria. In Personne morale, Justine Augier exposes how multinationals like Lafarge navigate ethics and profit in conflict zones, raising questions on global accountability.

Written by The North Africa Journal

The North Africa Journal is a leading English-language publication focused on North Africa. The Journal covers primarily the Maghreb region and expands its general coverage to the Sahel, Egypt, and beyond, when events in those regions affect the broader North Africa geography. The Journal does not have any affiliation with any institution and has been independent since its founding in 1996. Our position is to always bring our best analysis of events affecting the region, and remain as neutral as humanly possible. Our coverage is not limited to one single topic, but ranges from economic and political affairs, to security, defense, social and environmental issues. We rely on our full staff analysts and editors to bring you best-in-class analysis. We also work with sister company MEA Risk LLC, to leverage the presence on the ground of a solid network of contributors and experts. Information on MEA Risk can be found at www.MEA-Risk.com.

Pin It on Pinterest

Share This