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Foreign Policy
Foreign Policy
22 Nov 2023


NextImg:Egypt Looks to IMF, Again

Welcome to Foreign Policy’s Africa Brief.

The highlights this week: Court strikes down Rishi Sunak’s Rwanda plan, Liberia’s incumbent president loses and steps down, and Madagascar’s election.


IMF Considers Boost to Egypt’s Loan

The International Monetary Fund (IMF) could increase Egypt’s rescue program due to the impact of the war in neighboring Gaza. Last month, Egypt was in talks with the IMF on a potential increase of its $3 billion loan to more than $5 billion.

Managing director Kristalina Georgieva told Reuters on Friday that the IMF was “seriously considering” a possible augmentation of Egypt’s bailout. Georgieva made the comments on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco.

She said that Israel’s war against Hamas is not only “devastating” Gaza’s population and economy but presents difficulties for neighboring countries Egypt, Lebanon, and Jordan through the loss of tourism and higher energy costs.

Egypt is the IMF’s second-largest debtor after Argentina. In the past decade, Cairo’s international debt has climbed from $37 billion in 2010 to $164 billion as of September. The country became heavily dependent on short-term foreign investments but was slow to implement necessary fiscal reforms. Inflation rose to almost 40 percent in September—a record high (before falling 2 percentage points last month).

As Abdelrahman Mansour argued recently in Foreign Policy, Egyptian President Abdel Fattah al-Sisi relied on loans to fund major projects including a new capital with little economic benefit that “may well end up as ghost towns.”

The IMF has demanded that Egyptian authorities float the currency, which has been devalued three times since March 2022, losing 50 percent of its value against the dollar and raising food costs for residents.

However, the IMF has yet to conduct two scheduled program reviews that would unlock around $700 million in delayed loan tranches and usher in an expected fourth devaluation of the Egyptian pound.

Egypt had hoped to expand its tourism sector annually by 30 percent but is experiencing cancellations at around 10 percent of total bookings. Cairo has denied various media reports of a potential deal to accept Palestinian refugees in return for U.S. debt relief.

Egyptian Foreign Minister Sameh Shoukry on Thursday further rejected claims that Israel and the U.S. had offered debt cancellation in return for accepting fleeing Palestinians.

The Financial Times reported in October that Israeli Prime Minister Benjamin Netanyahu had lobbied European leaders to put pressure on Egypt into accepting refugees from Gaza, but France, Germany, and the United Kingdom dismissed the proposal as unrealistic given Egypt’s strong stance against a blanket refugee intake.

Only the critically injured, premature babies, and foreign and dual nationals have been allowed to leave Gaza through Egypt’s Rafah border crossing—the only non-Israeli exit point. Egyptian officials fear a permanent Palestinian displacement into Egypt as well as financial and security burdens if a mass exodus were to occur.

The countries from the global south are drawing closer together in opposition to the Israeli offensive in Gaza. A delegation of foreign ministers of the Palestinian Authority, Indonesia, and Arab nations including Egypt held a meeting this week in Beijing on the war in Gaza. The delegation of Arab-Muslim nations then traveled to Moscow on Tuesday.

“The situation in Gaza affects all countries around the world, questioning the human sense of right and wrong and humanity’s bottom line,” Chinese Foreign Minister Wang Yi said during the meeting in Beijing, urging the international community to “act urgently” to prevent the war from spreading.

Shoukry said at the meeting that his country was “making every effort to deliver aid to Gaza through the Rafah crossing, but Israel’s policy of obstructing aid entry is systematic to force Palestinians to leave Gaza under the continued bombardment and siege.”

Egyptian authorities are keen to see an immediate end to the violence in Gaza not only on humanitarian grounds but also with the knowledge that the longer the war goes on, the larger the effect on Egypt’s already troubled economy. U.S. President Joe Biden said a deal negotiated by Qatar, the United States, and Egypt was close to securing a five-day humanitarian pause in fighting in exchange for the release of 50 Israeli hostages.


The Week Ahead

Friday, Nov. 24: Madagascar’s electoral commission to announce full election results.

Monday, Nov. 27: Ghana announces its interest rate decision as it struggles with currency depreciation and high inflation.

Thursday, Nov. 30: Zimbabwe’s finance minister, Mthuli Ncube, presents the 2024 national budget.


What We’re Watching

U.K.’s Rwanda deal. British Prime Minister Rishi Sunak is pursuing a new deal with Rwanda after the U.K. Supreme Court unanimously ruled that his government’s scheme to deport asylum-seekers to Rwanda was unlawful. The U.K.’s highest court said refugees sent to Rwanda would be at “real risk” of being returned to their country of origin, whether their grounds to claim asylum were justified or not—and such returns would breach international law.

In an earlier deal between Rwanda and Israel, hundreds of asylum-seekers mainly from Sudan and Eritrea deported from Israel to Rwanda were expelled to Uganda without being allowed to claim asylum. The judges stressed that a ream of international treaties, including domestic British laws, protected refugees from the scheme. In a statement, the Rwandan government said that the U.K. court relied on “extreme and speculative concerns.” Kigali said the “earlier agreement with Israel to receive migrants was ended by Rwanda after it was deemed unworkable.”

Sunak said he would pursue a treaty with Rwanda that declares the country safe. He has also proposed “emergency legislation” to revive the plan, but new laws are unlikely to overcome the ruling, which requires “credible assurances” that asylum-seekers would be protected given Rwanda’s poor human rights record. In an opinion piece for the Telegraph, the U.K.’s sacked former home secretary, Suella Braverman, said “Parliament needs to amend the Illegal Migration Act.” The U.K. has already paid the Rwandan government £140 million ($174 million), but no asylum-seekers have yet been sent to the country. The treaty would require more money being paid to Rwandan President Paul Kagame’s administration.

South Africa’s ICC call. Israel recalled its ambassador to South Africa for consultations on Monday. It followed South Africa’s calls for the International Criminal Court (ICC) to issue an arrest warrant for Netanyahu by mid-December

Last week, South Africa—along with Bangladesh, Bolivia, Comoros, and Djibouti—referred Israel’s government to the ICC over its actions in the Gaza conflict. South Africa’s governing African National Congress withdrew its diplomats from Israel and on Thursday a parliamentary motion passed calling for the Israeli Embassy in South Africa to be closed until a cease-fire in Gaza is agreed.

Madagascar elections. Madagascar’s incumbent president, Andry Rajoelina, had taken a commanding lead Monday evening with over a third of votes counted in last Thursday’s election marked by low voter turnout and an opposition boycott. Rajoelina, who first rose to power with the backing of the military after a 2009 coup, is on course to secure a third term, having gained 62.9 percent of the votes by late Sunday.

Around 10 opposition candidates withdrew from the presidential contest over alleged flaws in the electoral process and urged voters to boycott the election. The opposition argued that Rajoelina should be disqualified from the election because he obtained French citizenship in 2014 and that the country’s electoral commission was not independent. In the polling stations tallied so far, Madagascar’s electoral commission said turnout was 43.1 percent.

Liberia elections. Joseph Boakai became Liberia’s new leader after President George Weah on Friday conceded defeat. Weah, a 57-year-old former soccer star, was unable to repeat his landslide runoff win over the 78-year-old Boakai in 2017. His tenure was marred by mismanagement and a failure to improve the lives of Liberia’s poor.

The U.S. government had imposed sanctions on three officials in Liberia’s government over corruption allegations, including Weah’s chief of staff. Weah spent much of the pre-election season abroad at a time of high inflation, angering Liberians. Boakai, a former vice president, secured his razor-thin victory with 50.64 percent of the vote against Weah’s 49.36 percent. At a time of coups in the region, Weah was praised by fellow African leaders for conceding before final results were declared.


This Week in Culture

Sotheby’s record sale. The Ethiopian-born U.S.-based artist Julie Mehretu has again broken the record for an African artist at auction. Her 2008 painting Walkers With the Dawn and Morning fetched $10.38 million at Sotheby’s in New York last Wednesday—surpassing the previous record she set last month.

In October, another painting by Mehretu sold at Sotheby’s Hong Kong for $9.32 million (with fees). Mehretu, 52, was born in Ethiopia and moved to the United States as a child in 1977. Before October, the highest-selling African artwork was The Visitor by South African artist Marlene Dumas, which sold for $6.3 million in 2008. Last year, $63 million was spent on art by African-born artists in what is a booming market. As the Art Newspaper highlights in contrast to the broader art market, the top prices paid for African art are for works by women.

Afrobeats’s continued rise. Nigerian star Burna Boy won the first-ever best Afrobeats act presented by the Billboard Music Awards on Sunday. “This is dedicated to Africa and every artist coming out of Africa now,” he said accepting the award in a recorded video message. Fellow Nigerian artist Rema won the award for best Afrobeats song with global hit “Calm Down.” Billboard is the latest U.S. awards body to add an African music category. In June, the Recording Academy announced the 2024 Grammys would expand to include best African music performance.


FP’s Most Read This Week


What We’re Reading

Mass data leak in DRC. The Kivu Security Tracker—an online tool developed by Human Rights Watch and New York University to map rights abuses committed by state security forces and armed groups in the Democratic Republic of the Congo—accidentally leaked data of up to 8,000 people, reports the Intercept.

The database—which contained names, locations, and phone numbers of local activists, journalists, U.N. staff, Congolese officials, and survivors of violence and sexual assault—was accessible via the tracker’s website due to weak security. The site was taken offline after project owners were made aware of the vulnerability.

Protests hit South Africa. A group of South African pro-Palestinian activists earlier this month shut down the main entrance to Paramount Group, a privately owned South African military equipment company and Africa’s largest arms trader. The protests are over the group’s alleged ties to Israel, among other countries, Maya Bhardwaj reports in Africa Is a Country. In a statement, Paramount Group denied selling arms to Israel.