Egypt

Overview

According to the WHO, the first case of COVID-19 was reported on February 14, 2020. 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 also suspended the export of all types of legumes for a period of 3 months - which has been extended further for 3 more months in June 2020, and they plan to start increasing strategic food reserves to meet domestic demand. Egypt have resumed the export of medical supplies, after a temporary halt in March 2020. Around 77,000 Egyptians have been repatriated since the start of the pandemic. The central bank and the government are actively implementing measures to contain economic implications of the pandemic.

Reopening of the economy. According to a Cabinet statement on April 30, 2020, the government had started to draw up plans to ‘coexist’ with COVID-19 in the long term. Since the last week of April 2020, shopping malls and retail outlets had been allowed to open on weekends until 5 pm, while restaurant customers had been allowed to place takeaway orders in-store. Starting May 4, 2020, hotels were 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. Starting June 1, 2020, nighttime curfew was one hour shorter – from 8pm to 5am instead of 6am. Starting July 2020, a gradual re-opening of the economy – air travel will resumed, restaurants and cafes opened with 25 percent capacity, stores will close at 9 pm while restaurants and cafes will close at 10 pm, beaches will remain closed until further notice, public transportation will operate between 4 am and midnight., All parks and specialized gardens around Cairo will open to the public starting on August 26, 2020, with a maximum capacity of 50 percent. Starting September 21, funeral prayers and wedding ceremonies held in open-air venues have been allowed, for a maximum limit of 300 people. Guidance on risk mitigation measures remains in place, including social distancing and mask wearing. International flights have resumed, and tourists are arriving in small numbers.

COVID-19 Restrictions

Movement Restrictions

Is a curfew in place? No
Are there restrictions on intercity or interstate travel? No

Transportation Options

Are commercial flights operating? Yes
Is public transportation operating? Yes

Fines for Non-Compliance

Individuals who do not adhere to precautionary measures such as wearing a mask indoors may be subject to an immediate fine or prosecution.

Economic Measures

Key Policy Responses as June 3, 2021

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 close to 1.6 million beneficiaries. A consumer spending initiative of close to EGP 10 billion has been launched to offer citizens two-year, low-interest loans to pay for consumer goods discounted by up to 10-25 percent and provide ration card subsidies. A new guarantee fund of EGP 2 billion has been formed to guarantee mortgages and consumer loans made by banks and consumer finance companies. To support the healthcare sector, EGP 5 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. A Corona tax of 1 percent on all public and private sector salaries and 0.5 percent on state pensions have been imposed, the proceeds of which are earmarked for sectors and SMEs most affected by the pandemic.

MONETARY AND MACRO-FINANCIAL

The central bank reduced the policy rate by 300bps in response to the pandemic and has since then reduced the policy rate by 100 bps. The preferential interest rate has been reduced from 10 percent to 8 percent on loans to tourism, industry, agriculture and construction sectors, as well as for housing for low-income and middle-class families. A housing initiative has been announced to provide low cost financing for housing units. A new lending initiative with soft loans at zero-to-low interest rates from banks is aimed at replacing old cars with natural gas-powered vehicles. 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. Microlenders have been advised by the Financial Regulatory Authority to consider delays on a case-by-case basis, of up to 50 percent of the value of monthly installments for struggling clients, and the regulations issued last year requiring banks to obtain detailed information of borrowers have been relaxed. An initiative that suspends credit score blacklists for irregular clients and waives court cases for defaulted customers under certain conditions, has been extended for customers in the tourism sector. The central bank launched an EGP 20 billion stock-purchase program which it has minimally used. The central bank has also extended previously existing initiatives, namely (i) initiatives for the tourism sector and distressed companies with debt below EGP 10 million have been extended for another 6 months, (ii) the share of bank loan portfolios that must be allocated to SMEs has been raised from 20 to 25 percent.

EXCHANGE RATE AND BALANCE OF PAYMENTS

At the outset of the pandemic, large capital outflows had resulted in a drawdown of reserves to avoid excessive exchange rate volatility from the severe turbulence in financial markets. Portfolio flows have started recovering since June 2020.

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)