Africa Edge

Research evidence excerpt

Africa Edge

r private-sector-led growth. Whileon several fronts. This marks the first direct attack on Egyp-

the authorities have taken positive steps, including the adop-tian soil linked to the current regional conflict. Although

tion of the State Ownership Policy, improvements to customsEgypt has suffered substantial indirect spillovers, including

and tax administration, and the completion of the Gabal Elhigher energy prices, market volatility, and capital outflows, it

Zeit transaction alongside sales of stakes in listed companies,has largely avoided direct security incidents until now.

the pace of divestment has remained slower than originally

anticipated. Total privatization proceeds have reached aroundThe location of the attack is equally important. Damietta lies

US$520mn, but the Fund stressed the need to accelerate assetnear the northern entrance and exit point of the Suez Canal, a

sales and broaden opportunities for private sector participa-critical artery for global energy trade. With Hormuz facing

tion. The IMF views faster implementation of the divestmentongoing disruptions and Houthi attacks effectively restricting

agenda as critical to improving competition, attracting foreignnavigation through Bab el-Mandeb, the Red Sea route has

investment, reducing the state's footprint in economic activity,become increasingly challenging for regional exporters. As a

and strengthening medium-term growth prospects.result, the Suez Canal and SUMED pipeline have grown in

strategic importance for Saudi Arabia, particularly for crude

Recent developments, including the escalation of the regionalexports originating from the East-West pipeline terminal at

conflict and the drone attack on a US LNG vessel at DamiettaYanbu. The attack raises concerns not only about Egypt's