The United Arab Emirates (UAE) has committed a whopping $35b investment to develop the Ras El Hikma peninsula in Egypt.
In September 2023, President Bola Ahmed Tinubu was in Abu Dhabi where he met the President of the United Arab Emirates, Mohamed bin Zayed Al Nahyan, the Presidency had disclosed that in recognition of President Tinubu’s economic development and diplomacy drive, an agreed framework has been established, which will involve several billions of U.S. dollars’ worth of new investments into the Nigerian economy across multiple sectors, including defence, agriculture and others, by the investment arms of the Government of the United Arab Emirates.
Nigerians are yet to see this investment.
Rather, according to Reuters, Egypt struck an agreement with ADQ, one of Abu Dhabi’s leading sovereign investment funds, marking a significant milestone for Egypt, promising to inject $35 billion into the country’s economy over the next two months, with projections reaching up to $150 billion.
READ ALSO: Sanwo-Olu to Import rice paddy for Imota rice mill, Begs Tinubu
This initiative is expected to transform the Ras El Hikma peninsula into a bustling hub of investment zones, residential areas, commercial spaces, and tourism and recreational facilities, with the groundbreaking work slated to commence in 2025.
This news has been met with enthusiastic response from the markets, as evidenced by the surge in Egypt’s sovereign dollar bonds ahead of the announcement.
The bonds, particularly those maturing in 2047 or beyond, saw an increase of more than 3 cents in the dollar, trading at their highest level in approximately a year, according to Tradeweb data.
This uptick is a clear indicator of the growing investor confidence in Egypt’s economic prospects.
The strategic location of Ras al-Hikma, approximately 200 km west of Alexandria, is already known for its upscale tourist resorts and pristine beaches, making it an ideal candidate for this ambitious development project.
However, beyond the immediate economic benefits, this deal represents a significant step forward for Egypt in its ongoing battle against a slow-burning economic crisis characterized by a chronic foreign currency shortfall, mounting debt, and sustained pressure on the Egyptian pound.
Despite these challenges, Egypt’s pursuit of economic stability and growth has been unrelenting.
The country’s engagement with the International Monetary Fund (IMF) for a $3 billion financial support package and its commitment to economic reforms, including a move towards a flexible exchange rate regime, reflect a proactive approach to addressing its economic issues.
It is hoped that Nigeria will take a cue from this.
