Cairo managed to secure investment deals worth $5 billion earlier this year.

The Qatar Investment Authority (QIA) has reportedly injected $1 billion into Egypt’s central bank as the cash-strapped nation grapples with an ongoing economic crisis, Bloomberg reported on Wednesday.

Citing sources privy to the matter, the report said the sovereign wealth fund deposited the amount amid discussions with the Gulf state over acquiring stakes in major Egyptian companies. 

The report added the deposited amount went to Egypt as the wealth fund and Cairo work on finalising a deal on the investments.

Last month, Bloomberg reported that Qatar was in talks to buy some $2.5 billion of stakes in several Egypt-based companies.

Sources had told the news agency that the QIA could potentially acquire a 20% stake in Vodafone Egypt from Telecom Egypt Co. in a deal expected to be concluded later this year.

However, the sources at the time were unable to list the other firms as they were not on Egypt’s stock market, read Bloomberg’s report.

Vodafone Egypt’s spokesperson Ayman Essam told Bloomberg that it was “not officially aware of the deal” while declining to provide further details on the matter.

Telecom Egypt, a state-owned entity, had acquired a 45% stake in Vodafone Egypt in 2017 as the UK’s Vodafone Group owns a 54.9% stake in the telecommunications giant.

The reports come after Egypt’s President Abdelfattah El Sisi visited Qatar in October, his first to the Gulf state since the 2017 GCC crisis.

Qatar’s Amir Sheikh Tamim bin Hamad Al Thani made a similar visit to Cairo on 24 June, marking the second such trip to Egypt since the 2013 military coup. 

The meetings between the leaders signalled the warming of Qatar and Egypt’s ties following the full restoration of relations in 2021 with the Al-Ula Declaration.

The historic accord came after Egypt joined Saudi Arabia, the UAE and Bahrain to impose an illegal air, land and sea embargo on Qatar over claims that it supported terrorism. Doha vehemently rejected those claims as baseless.

Egypt’s economy

With Egypt scrambling to save its economy in light of the ongoing war in Ukraine, Cairo managed to secure investment deals worth $5 billion during the visit of Qatar’s Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani to Cairo in March.

Egypt, the world’s top importer of wheat, is among the nations that has been hit by the grain crisis in light of the ongoing war in Ukraine. A total of 80% of Egypt’s imports come from the Black Sea region, at the heart of the conflict between Russia and Ukraine.

According to Bloomberg, other Gulf Arab nations stepped in with more than $20 billion deposits and investments in Cairo.

The Egyptian government took out a $500 million loan from the World Bank this year and an additional $221 million from the African Development Bank to purchase wheat. 

The country’s economy was already in turmoil, with the currency dropping in value against the US dollar. Inflation in the country hit 15.3% in August in comparison to at least 6% in the same period last year.

Almost a third of Egypt’s population of more than 103 million live in poverty, with families struggling to afford basic necessities as prices of food staples soar. 

According to the Associated Press (AP), Egypt’s foreign reserves dropped to $33 billion from $41 billion in February. The country’s foreign debt reached $158 billion in March, skyrocketing from $37 billion in 2010.