Browse the complete Report on: Egypt Insurance Report Q3 2010
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On paper, Egypt’s insurance market is one of the most promising in the Middle East. By virtually all measures, it is underdeveloped. However, and in complete contrast to the nearby Gulf Co-operation Council (GCC) countries, which have (far) higher per capita incomes than Egypt and which are mostly easier places in which to do business, there is already a significant life sector. The prospects for the economy, which was largely isolated from the impact of the global financial crisis, are favourable. The market is open to foreign competition, and the government is moving slowly towards financial liberalisation.
The Insurance Holding Company (IHC) is the largest player in the market by far. This is the stateowned enterprise through which the government maintains its stakes in Misr Insurance and National Insurance Company of Egypt (NICE). Misr Insurance includes the operations of the eponymous insurance company, Al-Chark Insurance and Egyptian Reinsurance, all of which were merged in 2007. Misr Insurance is a composite insurer, although IHC has been separating its life operations from its non-life operations in preparation for an initial public offering (IPO) of the life business sometime in 2010. NICE, which operates separately from Misr Insurance, focuses on health, pensions and other life products.
Delays in the privatisation of Banque du Caire following the breakdown in negotiations between the government and the National Bank of Greece in 2008 provide a reminder that in Egypt a general statement of official intent to undertake an IPO does not necessarily mean that a deal will take place. According to the Egyptian insurance regulator, total premiums in the year to June 30 2008 were EGP9,943mn. Total premiums written by IHC’s companies amounted to EGP3,905mn, or about 40% of this. However, IHC’s companies’ investment assets account for about 75% of those of the entire insurance sector.
Determining a value for those assets that is both reasonable from the point of view of the government and potential buyers of Misr Insurance’s life operations (or, indeed, anything else that IHC seeks to sell) is one of the major challenges. IHC’s management has indicated that it is in the process of transforming the insurance companies’ real estate assets into a stand-alone real estate ownership/development/management operation. Given the generally favourable performance of Egypt’s economy over recent years and the massive developments that are underway to the east and west of Cairo especially, but also in other parts of Egypt, BMI strongly suspects that the property holdings of IHC’s insurers are latent assets that are undervalued.
The enlargement of Misr Insurance, or, from the point of view of IHC, the combination of an enlarged Misr Insurance with NICE, has undoubtedly produced one of the largest indigenous insurance companies in the Middle East. Furthermore, and in contrast to Tawuniya in Saudi Arabia or Bimeh Iran, Misr Insurance and IHC are truly composite operations. However, even the sale of all of IHC, as opposed to the life operations of Misr Insurance, would not be a particularly large transaction by international standards. We have not seen the latest premium figures for IHC, but assume that they were somewhere near US$800mn in the year to June 30 2009 (assuming a 10% rise over the premiums for the year to June 2008). Press reports indicate that ‘realised’ profits were EGP972mn (US$172mn) in the year to June 2009, while total assets fell slightly to EGP22,900mn (US$4,190mn). According to an article commissioned by the American Chamber of Commerce (AmCham) in Egypt, IHC had 13,000 staff. If these figures are correct IHC has slightly more than half the staff of the AIA business which AIG sought to sell to Prudential plc at the beginning of March 2010 in one of the largest corporate deals of all time. However, AIA’s total weighted premium income, from 20mn customers in 15 national markets across Asia Pacific, was US$11,600mn in the year to November 2009. AIA’s profits before and after tax were US$2,274mn and US$1,437mn respectively. Its total assets were US$90,659mn.
In other words, we suspect that labour productivity may be an issue for IHC – and a challenge that will not necessarily be faced by foreign competitors, who will almost certainly have access to capital at a lower cost than IHC’s companies, which are looking to develop their businesses in Egypt organically. In this report, we continue to provide a breakdown of the insurance sector by line from the point of view of the regulator or the trade association. In Egypt group life products accounted for about one-quarter of overall life premiums in 2007/08. In the non-life segment comprehensive motor insurance (presumably compulsory motor third party liability, or CMTPL) was the largest line, accounting for about one-fifth of gross written premiums. Other major lines, accounting for over one-10th of non-life premiums each, included oil, fire, other motor insurance and accident insurance.
At the time of writing, in June 2010, we have been able to ensure that the report includes actual data for 2008. We have generally been able to use data published in 2009 to adjust our forecasts for the year as a whole.
We expect total premiums for the year to June 30 2009 of EGP10,656mn, which comprises non-life premiums of EGP4,770mn and life premiums of EGP5,886mn. In 2014 the corresponding figures should be EGP21,039mn, EGP9,668mn and EGP11,370mn respectively. In terms of the key drivers that underpin our forecasts, we expect non-life penetration to rise from 0.45% in 2009 to 0.60% in 2014, and for life density to rise from US$13.60 per capita to US$29.39. BMI’s insurance industry Business Environment Rating for Egypt is 47.0 out of 100.
Issues To Watch
The Privatisation Of Misr Insurance’s Life Operations Through An IPO The process would likely add to the overall transparency of Egypt’s insurance sector, whether or not a deal actually takes place.
Foreign Groups In Egypt
Multinationals present include MetLife (following its purchase of ALICO from AIG in March 2010, Allianz and ACE). Crédit Agricole and Etiqa (from Malaysia) have applied for licences. Given that Egypt appears set to achieve steady, double-digit growth in premiums over the next five years, and is home to both non-life and life segments that have moved beyond embryonic levels of development, it is possible that additional companies will look to enter the market.
Islamic Finance
Egypt’s regulators and financial institutions have been less active in promoting Islamic banking and takaful than have their counterparts in Bahrain and Malaysia. Nevertheless, takaful may play a substantially greater part in the overall development of Egypt’s insurance sector than it has to date.


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Browse the complete Report on: Egypt Telecommunication Market
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In the latest update of the Egypt Telecommunications Report, we have analysed the latest data available from the Egyptian telecoms market. This has not led to big revisions of the forecasts, as the data for the first part of 2010 appear to fit very well within our previous expectations.
In the last update, we revised our forecasts for all sectors, with changes in fixed-line particularly notable. Egypt’s fixed-line sector contracted by 11.9%, which saw its fixed lines in service reach 10.313mn. That the country has managed to hold onto growth in the sector compared with the global decline in fixed lines is perhaps related in part to the deployment of fixed lines in ADSL connections. However, with mobile penetration rates now passed 70%, it is not surprising that greater mobile substitution is taking the place of fixed lines, which has contributed to the latter’s decline. We have found no reason to changes these. There were 58.628mn mobile subscribers in Egypt at the end of March 2010. BMI estimates the mobile sector to expand by 23% in 2010 to reach 69.383mn subscribers and a penetration rate of 85.1%. By the end of 2014, we forecast penetration of 132.4%, which, however, contains a number of inactive SIMs. Mobile broadband connections over 3G networks are seen as the second largest technology access group next to ADSL lines in the broadband market and have helped to bring connectivity to areas where there is a lack of fixed-line network coverage. No-one, neither the various agencies nor the operators, is at present providing good data on the number of 3G dongles in use in Egypt, but BMI’s own observations of the market suggest that they are popular among high-end users and businesses. Some have suggested that they may soon overtake fixed-line connections as the principle form of connection to the internet in Egypt.
Egypt has moved down one place within our Telecoms Business Environment Ratings in this latest update. Falling ARPUs have led to a drop in the Telecoms Market score, but the overall rating for Egypt was bolstered slightly by improvement from a Country Risk perspective.
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Browse the complete Report on: Egypt Power Report Q3 2010

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The new Egypt Power Report from BMI forecasts that the country will account for 10.34% of the Middle East and Africa (MEA)’s regional power generation by 2014, with a modest theoretical generation surplus. BMI’s MEA power generation estimate for 2009 is 1,225 terawatt hours (TWh), representing an increase of 1.9% over the previous year. We are forecasting an increase in regional generation to 1,572TWh by 2014, representing a rise of 23.2% between 2010 and the end of the period. BMI estimates thermal power generation in 2009 was 1,064TWh, accounting for 86.9% of the total electricity supplied in the region. Our forecast for 2014 is 1,293TWh, implying 18.8% growth in 2010- 2014 that reduces slightly the market share of thermal generation to 82.3% – thanks in part to environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Egypt’s thermal generation in 2009 was an estimated 113TWh, or 10.63% of the regional total. By 2014, the country is expected to account for 10.54% of regional thermal generation.
For Egypt in 2009, gas was the dominant fuel, accounting for an estimated 50.0% of primary energy demand (PED), followed by oil at 43.1% and hydro with a 5.4% share. Regional energy demand is forecast to reach 1,075mn tonnes of oil equivalent (toe) by 2014, representing 19.3% growth over the period since 2010. Egypt’s estimated 2009 market share of 8.76% is set to fall to 8.75% by 2014. Egypt’s estimated 18.1TWh of hydro generation in 2009 is forecast to reach 22.1TWh by 2014, with its share of the MEA hydro market easing from an estimated 41.56% to 35.44% over the period.
Egypt now ranks equal third with Saudi Arabia in BMI’s updated Power Business Environment Ratings, reflecting its market size and above-average proportion of renewables (hydro-power) use. While the regulatory environment is not particularly attractive, the power sector is modestly competitive, with some progress towards privatisation. Egypt has this quarter caught back up with Saudi Arabia, and has the potential to pull clear during the next few quarters.
BMI now forecasts Egyptian real GDP growth averaging 5.12% a year between 2010 and 2014, with a 2010 assumption of 4.60%. Population is expected to expand from 77.7mn to 84.1mn, with GDP per capita and electricity consumption per capita to increase by 57% and 16% respectively. Power consumption is expected to increase from an estimated 117TWh in 2009 to 147TWh by 2014, while theoretical surplus capacity will be 15TWh by 2014, assuming 4.1% average annual growth in electricity generation.
Between 2010 and 2019 we forecast an increase in Egyptian electricity generation of 43.7%, towards the middle of the range for MEA. This equates to 21.7% during 2014-2019, up from 18.1% in 2010-2014. PED growth is set to be 21.1% in 2014-2019, up from the 18.1% expected for 2010-2014, representing 43.0% for the entire forecast period. An increase of 51% in hydro-power use in 2010-2019 is an important element of generation growth. Thermal power generation is forecast to rise by 38% between 2010 and 2019. More details of the long-term BMI power forecasts can be found later in this report.
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Browse the complete Report on: Egypt Shipping Report Q4 2010
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Egyptian ports, which felt the impact of the global recession last year, were seeing the first signs of recovery trickling through. In May, the Egyptian authorities reported an 8% year-on-year (y-o-y) surge in the Suez Canal's revenues to US$374.9mn in April 2010. The canal's revenue stood at US$379.4mn in March 2010. The canal recorded a slight improvement in non-oil vessels traffic and tonnage in April 2010, while its oil vessels traffic and tonnage dropped. The Suez Canal, which connects the Red Sea to the Mediterranean, is the third largest generator of foreign currency in the country, after tourism and remittances. Recently, the Suez Canal Authority decided to freeze canal transit tolls for 2010, keeping the freeze that was put in place for 2009. In addition, the Egyptian authorities also offered discounts to vessels transiting the Suez Canal in an effort to see out the global economic crisis.
Midway through 2010 the operating environment facing the Egyptian ports and shipping industry was good, despite political risks. Egyptian economic growth largely side-stepped the effects of the global recession in 2009. The pace of growth slowed but did not turn negative. BMI expected some further slowing in 2010, caused by weakening consumption and private investment. After 4.7% GDP growth in 2009, we predicted the pace would ease further to 4.6% in 2010, before picking up again to 4.8% in 2011. We expected the average growth rate in the period to 2014 to be 5.1%, clearly marking out the country as a regional out-performer.
The main political risk to this scenario was the vexed issue of the succession to 82-year-old Hosni Mubarak, in power for almost three decades. Parliamentary elections were due at the end of this year with the the presidential contest looming in 2011. BMI believes the opposition is still too divided to triumph and therefore expects some form of succession from inside the ruling National Democratic Party (NPD), but warns of the danger of unrest and disruption, as well as of a period of uncertainty that could adversely affect the economic climate.
The total volume of goods handled by the Port of Alexandria continued to grow through the global downturn, although we see the pace of expansion slowing sharply over our forecast period. Total tonnage rose by 8.7% to 22.096mn tonnes in 2009 and we are predicting a further 5.0% increase this year, to 23.194mn tonnes. At Port Said (PS), where transhipment business plays a bigger role, tonnage dropped by 7.1% in 2009, and we are predicting a further small drop of 0.7% to 8.832mn tonnes in 2010. Box traffic at both ports is expected to continue growing, but at a low rate, which will lag behind the expansion of the domestic economy.
BMI expects exports to remain quite strong over the medium term thanks to high energy prices and a revival in Suez Canal traffic and tourism revenues. During 2009, Egyptian trade (imports + exports) fell by 15.5% in real terms. We predict it will fall by a further 0.9% in 2010 before returning to a growth path with 3.0% expansion in 2011. Across our five-year forecast period to 2014, foreign trade will grow by an annual average of 2.9%, trailing GDP. Over the same five years, exports will grow by an annual average of 3.3% ahead of imports with growth of 2.6%.
We believe the main downside risk to our ports and shipping forecasts for Egypt is political and concerns the run-up to the elections next year. As previously mentioned, the BMI view is that the opposition remains too divided to win the elections. But the desire for change, the government's selective use of repression, potential divisions within the ruling party over the succession and long-standing allegations of electoral fraud could all come together to generate protests and disruption which would have a destabilising effect on the economy.
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Browse the complete Report on: Egypt Commercial Banking Report Q4 2010

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Since Q108, we have described numerically the banking business environment for each of the countries surveyed by BMI. We do this through our Commercial Banking Business Environment Rating (CBBER), a measure that ensures we capture the latest quantitative information available. It also ensures consistency across all countries and between the inputs to the CBBER and the Insurance Business Environment Rating, which is likewise now a feature of our insurance reports. Like the Business Environment Ratings calculated by BMI for all the other industries on which it reports, the CBBER takes into account the limits of potential returns and the risks to the realisation of those returns. It is weighted 70% to the former and 30% to the latter.

The evaluation of the Limits of Potential Returns includes market elements that are specific to the banking industry of the country in question and elements that relate to that country in general. Within the 70% of the CBBER that takes into account the Limits of Potential Returns, the market elements have a 60% weighting and the country elements have a 40% weighting. The evaluation of the Risks to Realisation of Returns also includes banking elements and country elements (specifically, BMI’s assessment of long-term country risk). However, within the 30% of the CBBER that takes into account the risks, these elements are weighted 40% and 60%, respectively.

Further details on how we calculate the CBBER are provided at the end of this report. In general, though, three aspects need to be borne in mind in interpreting the CBBERs. The first is that the market elements of the Limits of Potential Returns are by far the most heavily weighted of the four elements. They account for 60% of 70% (or 42%) of the overall CBBER. Second, if the market elements are significantly higher than the country elements of the Limits of Potential Returns, it usually implies that the banking sector is (very) large and/or developed relative to the general wealth, stability and financial infrastructure in the country. Conversely, if the market elements are significantly lower than the country elements, it usually means that the banking sector is small and/or underdeveloped relative to the general wealth, stability and financial infrastructure in the country. Third, within the Risks to Realisation of Returns category, the market elements (ie: how regulations affect the development of the sector, how regulations affect competition within it, and Moody’s Investors Service’s ratings for local currency deposits) can be markedly different from BMI’s long-term risk rating.


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Browse the complete Report on: Egypt Agribusiness Report Q4 2010
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BMI View: Egypt remains dependent on imports to meet demand in almost all agricultural sectors. In order to increase its longer-term food security, the country has been increasingly looking abroad, thereby joining the worldwide trend of import-dependent countries investing in farmland in foreign countries. In recent months, Egypt has looked to countries such as Sudan, Uganda and Ethiopia as potential sources of farmland; several deals to develop specific pieces of land have already emerged and more are expected to follow. Meanwhile, in addition to spearheading efforts to boost domestic production in key agricultural sectors, the Egyptian government remains chiefly responsible for regulating agricultural imports. As the world's largest importer of wheat, Egypt is vulnerable to international supply disruptions. In July, following prolonged drought and the outbreak of fires in Russia, a growing number of observers suggested that Russia might implement a temporary export ban on wheat exports. The potential loss of Russia as a supplier of wheat has increased the possibility that other countries will emerge as major suppliers to Egypt.

Key Views 

We predict that wheat production will rise by 13.2% to 2013/14. The growth in production will partly reflect government policies aimed at expanding agricultural production and decreasing import dependency. Both demand and production output are expected to recover in 2010/11, on the back of an economic recovery.

Although poultry represents the main source of meat-based protein for Egyptian consumers, demand for processed and packaged meat continues to strengthen as tastes and preferences develop. Beef consumption is forecast to increase by 17.1% to 2014. Despite the expectation of strong beef production growth, Egypt will continue to meet its considerable supply shortfall with imported beef.

We anticipate an 11.3% increase in fluid milk production to 2014. Production growth will be driven by new and ongoing investments in the dairy sector, as well as strong demand on the back of rising incomes: consumption is expected to increase by 23.8% to 2014; demand for cheese and butter is also predicted to grow.

Egypt will continue to rely on sugar imports in order to meet its supply shortfall. Despite this, strong production growth of 18.9% is predicted to 2014. Multinational firms have begun to target Egypt's sugar refining industry. Most recently, in June 2010, it was reported that Egypt's state-owned Food Industries Holding Company (FIHC) had received offers from German and Japanese companies to build a EGP1.2bn (US$209mn) sugar refinery.

Urban sprawl and limited water availability are both contributing to the loss of the little agricultural land there is in Egypt, with climate change also contributing to desertification. Meanwhile, disease remains one of the biggest threats to livestock production.

2010 Real GDP Growth: 4.9% (up from 4.7% in 2009; predicted to average 5.2% from now until 2014).

Private consumption growth came in at a relatively low 3.8% in Q1-Q3 of FY09/10, down from an average 4.8% expansion recorded in H1. Relatively high unemployment (9.4% of the total active population in 2009) and double digit annual inflation (10.4% in May) affected the population's purchasing power and in turn constrained the level of household consumption.

Key Outlooks 

Although wheat production is expected to steadily grow, Egypt remains heavily-reliant on wheat imports to meet domestic demand. Egyptians are some of the highest per capita consumers of wheat in the world, consuming an array of breads, as well as pasta, as dietary staples. Despite having signed numerous wheat supply agreements with Russia in H110, the outbreak of drought and fires in Russia in mid-2010 has cast doubt on Russia's immediate future role as a supplier of wheat to Egypt. Along with the prospect of higher wheat prices, Egypt is expected to look to other sources of imported wheat in 2010/11 including the US and possibly Argentina.

Egypt's dairy industry will continue to benefit from inward investment, as well as a more international outlook by domestic dairy producers which are eager to locate new sources of raw materials. In February 2010, it was reported that Gozour, the food unit of Egyptian private equity firm Citadel Capital, was in advanced talks to buy an Ethiopian food firm in its bid to boost self-sufficiency in raw materials. Although the Ethiopian company has not been named, it is thought that Gozour may be looking to Ethiopia as a potential source of dairy cattle and milk. Despite having already benefited from substantial amounts of investment, Egypt's dairy sector continues to be dominated by small-scale producers, many of which produce only a small surplus production which is sold to extended family members and the local community. The sector therefore offers considerable development potential.

On July 1 2010, Egypt implemented a nationwide ban on the selling of live poultry, which had been in place since May 2009 in five governorates. The main purpose of the ban is to combat the spread of bird flu. Under the new law, only licensed slaughterhouses with a resident veterinarian are allowed to handle live poultry. The new ban is just the latest initiative by Egypt's government aimed at enhancing efficiency and improving standards within the poultry sector. Although recent months have seen efforts to tighten licensing restrictions on the nation's poultry farms, one consequence of this has been an increased shortfall in demand. In the medium term, Egypt is expected to retain its reliance on imported poultry in order to meet a domestic supply shortfall.
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Browse the complete Report on : Egypt Real Estate Report Q4 2010

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In mid-2010, BMI’s in-country sources confirmed that Egypt is in the early stages of a major real estate boom. Across all five cities from which we have gathered data (Cairo, Alexandria, Sixth of October City, New Cairo and Giza), rents and capital values have risen over the past six months or so in the office and retail sub-sectors, while yields have fallen. Rents and yields appear to have tracked sideways in the less active industrial sub-sector.
The findings from the latest round of interviews are consistent with what we deduced from the previous round, which we conducted at the end of 2009. A very substantial increase in the supply of commercial property – thanks in part to the development of new cities to the east and west of Cairo and in part due to projects in the capital itself – means that years (perhaps decades) of under-development are finally being addressed. For a long time businesses have had little option but to operate in (typically old) buildings originally constructed for residential purposes. Now they have some choice.
Demand is also coming from two other quarters. Western multinationals are establishing and/or expanding their presence in Egypt, with the result that they need more office space. At the same time, Middle Eastern companies are relocating to Egypt, often in response to more difficult conditions in Dubai and Lebanon. Significantly, this second group of companies understands and is tolerant of the risks of operating in Egypt. Even if the political noises surrounding the forthcoming elections produces widespread unrest, these regional companies are unlikely to reconsider their plans.
The result is that conditions are dynamic. Vacancy rates vary, but are generally low or falling. Looking ahead, we expect that the optimism of protagonists in the office and retail sub-sectors will be justified. There should be a double-digit increase in rentals in these sub-sectors in 2011; further – if smaller – rises are likely in the following years. Over the forecast period (2011-2014), we envisage that capital values will increase rather more than rentals. As a result, the general downtrend in yields should continue. Egyptian assets are being rerated, and the country’s commercial real estate sector is a clear beneficiary of this.
Key Features Of This Report
This is the latest edition of a new series of industry reports published by BMI that seeks to identify the key dynamics of the real estate sectors of 44 countries around the world, some of which are developed and some of which are, in every sense, emerging markets. The questions that we seek to answer for each country remain as follows: What are the main issues for actors in and around real estate development in the country concerned, over both the long and the short term? What are the main constraints that they face? What are the key insights to be gleaned by comparing the real estate sector of a country with its regional peers?
In Q3 we introduced a very substantial improvement to our reports. We incorporated data and qualitative observations provided to us by commercial real estate agents operating in the countries we survey. As a result we have gained a much clearer picture of the balance between demand and supply in each of three main sub-sectors – office, retail and industrial. We have also introduced a new approach to the forecasting of rental yields, which is discussed in the methodology section of this report.
In Q410 we have incorporated a lot of new data in relation to rents and yields in 2010. We gained this data through a new round of interviews with our in-country sources in mid-2010. In some cases, the latest information from our sources has caused us to make significant revisions to our forecasts for 2011-2014. We asked our sources to indicate what growth in rents is likely for 2011. We explain their answers in the Forecast Scenarios.
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Browse the complete Report on : Egypt Defence and Security Report Q4 2010

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Political risks are rising, and the Israeli flotilla raid has put the Egyptian government under further pressure ahead of the November election. We have revised down our short-term political risk rating from 64.8 to 59.8, as the likelihood of policy shifts (within the constitutional and electoral framework) has increased. We also think that the presidential polls could be brought forward, to get the risks of a difficult transition out of the way and reassure concerned investors.
Public anger towards President Hosni Mubarak and his party continues to grow. News out of Gaza always plays badly for Mubarak, who is considered to be equally responsible (along with Israel) for the blockade of the territory, and the Israeli storming of a Turkish aid ship heading for Gaza (resulting in the deaths of nine people), is no exception. The popular belief appears to be that if Egypt would open its border with Gaza to allow essential goods, aid ships such as the Mavi Marmara would not have to be there in the first place.
Egypt not only keeps its border closed, it has also destroyed many of the tunnels through which the people of Gaza import goods (often with Palestinian smugglers inside). The government fears the influence of Hamas on its own population, as well as the prospect of losing the support of the US by indirectly supporting Hamas (by allowing goods through). However, such is the strength of Egyptian feeling on the Gaza Strip that Mubarak announced the opening of the Rafah border immediately after the flotilla incident.
On the economic front, the latest figures support our view that Egyptian growth will slightly accelerate in FY09/10 to 4.9%, though we maintain that a drop back to 4.8% in FY10/11 is likely as weakening external demand weighs on growth. In 2011, the economy will be held back by relatively low domestic demand compounded by a downturn in demand in Europe, undermining Egyptian exports. Around 70% of Egypt's exports are directed to the eurozone, which for the time being looks unlikely to see a strong recovery in demand, preventing a substantial contribution of trade to headline economic growth. Through 2011-2014 we forecast the growth rate to improve, averaging 5.2%.
Although Egypt lacks a substantial armaments design industry, it remains the most prolific manufacturer of military equipment among Arab states. Egypt has the capability to produce a variety of trainer aircraft, alongside armoured fighting vehicles (AFVs), artillery pieces, surface-to-air missiles (SAMs) and M1A1 Abrams tanks. It is the second-largest recipient of US military aid behind Israel and relies almost exclusively on the superpower for its imports. Egypt’s military manufacturing base benefits from coproduction deals with US multinational firms but a self-sufficient industry remains a distant hope.

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