Overview
According to the WHO, as of May 19, 2020, Egypt has 12,764 confirmed cases of COVID-19 and 645 deaths. The pandemic is likely to impact the Egyptian economy primarily due to declining travel and tourist activity, reduced worker remittances, capital outflows, and slowdown in domestic activities as people are asked to stay home. The weaker demand in the global market will also reduce Egypt’s exports as well as earnings from the Suez Canal. The authorities have taken a host of precautionary measures to improve testing as well as to limit the community spread of the virus, including setting up testing centers, imposing a nighttime curfew, temporarily closing places of worship, temporarily halting all air travel, and encouraging civil servants to work from home in non-essential sectors. Authorities have also suspended the export of all types of legumes for a period of 3 months and plan to start increasing strategic food reserves to meet domestic demand. The central bank and the government are actively implementing measures to contain economic implications of the epidemic.
Official Resources
No Data
Travel Restrictions
Flights to Egypt are suspended.
- This does not apply to:
- aircraft in state of emergency;
- the following flights with pre-authorization from the Egyptian Civil Aviation Authority: humanitarian flights, medevac, repatriation flights, technical landings and United Nations flights.
Source : IATA Timatic
Economic Measures
Reopening of the economy. According to a Cabinet statement on April 30, 2020, the government has started to draw up plans to ‘coexist’ with COVID-19 in the long term, saying there is currently ‘no end in sight’ to the outbreak. Since the last week of April 2020, shopping malls and retail outlets have been allowed to open on weekends until 5 pm, while restaurant customers have been allowed to place takeaway orders in-store. After temporarily suspending most public services and court proceedings, Egypt has relaxed some restrictions in the first week of May, including resuming work at car licensing units at traffic departments, real estate registry offices, and some court services. Starting May 4, 2020, hotels have been allowed to operate at 25 percent capacity until June 2020 and at 50 percent capacity thereafter. Egypt’s Health Ministry has published a 3-stage plan for coronavirus management that contains required procedures in preparation for the gradual return of normal life in the country.
Key Policy Responses as of May 19, 2020
FISCAL
-
The government has announced stimulus policies in the USD 6.13 billion package (EGP 100 billion, 1.8 percent of GDP) to mitigate the economic impact of COVID-19. Pensions have been increased by 14 percent. Expansion of the targeted cash transfer social programs, Takaful and Karama, are also being extended to reach more families. A targeted support initiative for irregular workers in most severely hit sectors has been announced, which will entail EGP 500 in monthly grants for 3 months. To support the healthcare sector, EGP 8 billion has been allocated, targeted at providing urgent and necessary medical supplies, and disbursing bonuses for medical staff working in quarantine hospitals and labs. To support medical professionals, including doctors working in university hospitals, a 75 percent allowance over the wages has been announced. Energy costs have been lowered for the entire industrial sector; real estate tax relief has been provided for industrial and tourism sectors; and subsidy pay-out for exporters has been stepped up, discount on fuel price has been announced for the aviation sector As part of the EGP 100 billion stimulus, EGP 50 billion has been announced for the tourism sector, which contributes close to 12 percent of Egypt’s GDP, 10 percent of employment, and almost 4 percent of GDP in terms of receipts, as of 2019. The moratorium on the tax law on agricultural land has been extended for 2 years. The stamp duty on transactions and tax on dividends have been reduced. Capital gains tax has been postponed until further notice.
MONETARY AND MACRO-FINANCIAL
-
The central bank has reduced the policy rate by 300bps. The preferential interest rate on loans to tourism has been reduced from 10 to 5 percent, for SMEs, industry and housing for low-income and middle-class families, has been reduced from 10 percent to 8 percent. A government guarantee of EGP 3 billion on low-interest loans by the central bank has been announce for the tourism industry soft loans. The central bank has also approved an EGP 100 billion guarantee to cover lending at preferential rates to the manufacturing, agriculture and contracting loans. Loans with a two-year grace period will be made available to aviation sector firms. Support has been announced for small projects harmed by COVID-19, especially in the industrial and labor-intensive sectors, through the availability of short-term loans of up to a year, to secure the necessary liquidity for operational expenses until the crisis is over. The limit for electronic payments via mobile phones has been raised to EGP 30,000/day and EGP 100,000/month for individuals, and to EGP 40,000/day and EGP 200,000/per week for corporations. A new debt relief initiative for individuals at risk of default has also been announced, that will waive marginal interest on debt under EGP 1 million if customers make a 50 percent payment. Microlenders have been instructed to also consider delays on a case-by-case basis, of up to 50 percent of the value of monthly installments for struggling clients. The regulations issued last year requiring banks to obtain detailed information of borrowers have been relaxed. Suspension of credit score blacklists for irregular clients and waiver of court cases for defaulted customers have been announced. The central bank has also launched an EGP 20 billion stock-purchase program which it has not yet used. A temporary daily limit has been for deposits and cash withdrawals for individuals and companies.
EXCHANGE RATE AND BALANCE OF PAYMENTS
Civic Freedom Tracker
AMENDMENTS TO EMERGENCY LAW 162/1958
The amendments expand the powers of the president and military prosecution during a declared state of emergency. Under the amended Emergency Law, powers available to the president now include the power to: ban private and public gatherings in addition to protests; shut down schools and universities; suspend operations in the private and public sector; and subject anyone returning from outside the country to quarantine. The amendments also allow the president to give military prosecutors preliminary investigation authority over any crimes. Egypt has been in a continuous state of emergency since April 2017, and most recently extended the state of emergency for another three months beginning January 27. (See primary source or citation here)
Type: law
Date Introduced: 8 May 2020
Issue(s): Assembly, Emergency, Militarization
STATE OF EMERGENCY
The presidential decree declares a "state of emergency" for three months, under Article 154 of Egypt's Constitution. Egypt has been in a near-continuous state of emergency since April 2017, however the most recent declaration cites the "critical security and health situation" as grounds for extension. The declaration reinforces the authority of the armed forces and police to maintain security and save the lives of citizens, and provides that the state may impose restrictions on individuals' movement. The decree also states that violations of emergency orders will be punished with imprisonment.
(
See primary source or citation here)
Type: order
Date Introduced: 28 Apr 2020
Issue(s): Emergency, Movement, Militarization
BAN ON PUBLIC RELIGIOUS GATHERINGS
The government bans all gatherings, public iftars, fast-breaking meals, and collective social activities for the holy month of Ramadan. (See primary source or citation here)
Type: order
Date Introduced: 7 Apr 2020
Issue(s): Assembly
NATIONWIDE CURFEW AND BAN OF PUBLIC GATHERINGS
The government's measures impose a curfew from 8pm to 6am, and bans public religious gatherings during Ramadan. Those who do not abide by the measures face fines of up to 4,000 Egyptian pounds ($255) or prison. (See primary source or citation here)
Type: order
Date Introduced: 24 Mar 2020
Issue(s): Assembly, Movement
SUPREME COUNCIL FOR MEDIA REGULATION LIMITS ACCESS TO ONLINE NEWS
The Supreme Council for Media Regulation has blocked or limited access to dozens of news websites and social media accounts for allegedly spreading false information about the coronavirus. The SCMR has not made public the targets of the blocking nor the allegedly false information. (See primary source or citation here)
Type: practice
Date Introduced: 3 Apr 2020
Issue(s): Disinformation, Expression
Source : ICNL