Why Arabia is investing billions of dollars in Egypt

Clean energies, pharmaceutical sector, trade, fintech… Cooperation between Egypt and Saudi Arabia will exceed 30 billion dollars this year. Saudi Crown Prince Mohammed bin Salman is determined to invest heavily in North African countries.

Saudi Crown Prince Mohammed bin Salman — aka “MBS” — began his diplomatic tour through Egypt. The Arab leader has signed fourteen cooperation agreements with Egyptian President Abdel Fattah al-Sisi, all worth $7,7 billion.

An amount which is added to the deposit, last March, of 5 billion dollars at the Egyptian Central Bank under “development aid”. And on hand, 3 billion dollars had been advanced to Cairo to support the Egyptian economy against the shock caused by the food crisis.

Egypt, highly dependent on imports, is the African country that suffered the most from grain shortages following the Russian-Ukrainian conflict.

Read: Egypt: towards a Lebanese scenario?

In a joint statement, MBS and al-Sisi announced that “Saudi Arabia is committed to injecting investments into Egypt worth $30 billion”. At the moment, the first tranche of this amount concerns investment in a new wind power plant, a new terminal in the port of Damietta, in northern Egypt, but that's not all: Egypt and Saudi Arabia will also launch a "pharmaceutical city", as well as a support fund for Egyptian fintechs.

A huge lifeline launched by the Saudi prince in the direction of Egypt, whose economic problems do not actually date from the conflict in Ukraine. After his visit to Cairo, the Saudi prince left for Jordan and Turkey.

What counterpart for Cairo?

Despite the privileged relations between al-Sissi's Egypt and Saudi Arabia, the disbursement of MBS is, to say the least, a surprise. The Saudi leader emphasized " the essential role of Egypt in the security and stability of the region ". An investment that precedes the next Arab-American Summit, to be held in Riyadh in November.

According to MBS, his visit to Egypt also aimed to "coordinate the positions" of each other before the famous summit. The meeting, which will be attended by US President Joe Biden, is expected to address Arab-Iranian relations, Israeli colonization of Palestine, Libya and fossil fuels, among others.

The Saudi billions for Egypt are not free, however. There is reason to suppose that Riyadh expects, in exchange for its substantial aid, Egyptian support on one or more issues on the agenda of the Arab-American Summit. As we know, MBS has also been trying to push certain Arab-Muslim African countries to integrate the Emirati-Saudi diplomatic axis for years now.

North Africa in sight

Some North African countries are prone to it. During the 13^e session of the Moroccan-Saudi Joint Commission last week, Moroccan Foreign Minister Nasser Bourita explicitly asked "relevant Saudi agencies to support reforms in Morocco".

More specifically, the head of Morocco's diplomacy requested a contribution from Saudi Arabia towards the Mohammed VI Investment Fund.

Algeria is expecting a visit from MBS “towards the end of July”. The first since 2018. The Algerian authorities were hesitant to receive the crown prince, since the assassination of journalist Jamal Khashoggi in Turkey. Especially since the majority of Algerian civil society is opposed to MBS because of the war in Yemen.

Read: Ukraine: Algeria at the center of the gas geopolitical axis?

These are the reasons, among others, that caused the Arab diplomatic crisis and the isolation of Qatar, which maintains good relations with the Maghreb countries. However, for the past few months, Turkey, Saudi Arabia, Qatar and the United Arab Emirates (UAE) have been getting closer.

With the economic crisis that has brought North African economies to their knees, Saudi aid remains a solution like any other.

The stars are aligned for MBS, but…

Another factor that encourages a possible Saudi push in North Africa: the defeats of the Muslim Brotherhood movement in all North African countries. In Egypt, then in Libya, then in Tunisia, in Morocco and finally in Algeria, the Islamist movement and its affiliated networks were, for the most part, kicked out of governments and parliaments, even from the political game.

And it would seem that, for this reason, Qatar and Turkey have resigned themselves to making peace with the UAE and Saudi Arabia. In order to then restore their influence in North Africa. At stake: not to spoil the investments of Qatar and Turkey in North Africa between 2011 and 2018.

With the Muslim Brotherhood defeated, and Khalifa bin Zayed Al Nahyan dead, a possible deal with Iran and a ceasefire underway in Yemen, the interests of all Arabs who align themselves in Chad, the Horn of Africa and in Libya… MBS seems in a hurry to seize his chance in order to integrate the Turkish-Arab-African diplomatic axis.

Two free electrons, Algeria and Tunisia, however, still have positions that are difficult to define. If the two Maghreb countries improve their relations with Saudi Arabia, nothing guarantees their alignment with MBS on certain issues. In this case: the support of Benghazi in Libya, or normalization with Israel, more than hypothetical.

Moreover, Algiers is rather intransigent on Western Sahara and its African leadership. Tunisia, despite the economic crisis and the weakening of its alignment with Algeria, is rather unpredictable on the diplomatic level. If President Kaïs Saïed may risk weakening his relations with Europe and Algeria, there is no guarantee that he will fall into line, against Saudi petrodollars.