Arab FinanceExperts in the field of immigration and economic analysts called for the necessity of expanding government banks in the Gulf countries and Africa as a motivating measure to attract more money and income.Transfers from Egyptians abroad For the banking system, especially after the return of stability in the Egyptian banking market, and the disappearance of the parallel market for the dollar after the flotation process and the devaluation of the pound against the dollar, which the government carried out on March 6.
In exclusive statements to Arab Finance, experts stressed the need to restore trust between… Egyptians working abroadAnd among the government, especially after many initiatives announced by the state to encourage Egyptians abroad to pump more money into the Egyptian market, and they did not succeed in their goals, especially the initiative to purchase real estate and housing units.
The stability of the banking market contributed to the return of Egyptians’ remittances to their official path
For his part, Dr. Ezz El-Din Hassanein, the economic and banking expert, said that after the date of March 6, 2024, which is the date of the flotation process in Egypt, the value of the pound decreased against the dollar, as the level of the Egyptian pound was at 31 pounds, while it is currently moving between 47 and 48 pounds, and that since that date it has stabilized. The banking market in Egypt, and what was called the parallel market for trading the dollar disappeared, and Egyptians working abroad now had a good impression of the banking market, and they began to pump more financial transfers into the official banking system.
Hassanein points out that, despite this, remittances from Egyptians working abroad are still lower than they were during the years 2021 and 2022, as remittances from Egyptians abroad exceeded $30 billion, while it is expected that they will not exceed $24 billion at the end of December 2024.
The banking expert added that there is an actual increase on a monthly basis in remittances from Egyptians abroad during the year 2024, while on an annual basis remittances from Egyptians abroad are still low, indicating that with the devaluation of the pound against the dollar, the volume of financial transfers from Egyptians abroad decreased, pointing out that the normal rate of remittances by Egyptians It is supposed to range from 2.5 to 3 billion dollars, while it is currently only 2 billion dollars per month.
Hassanein explained that government initiatives for Egyptians abroad disrupted many of their transfers, as a result of bureaucracy, especially the land and housing units initiative, which contradicted their expectations and created many problems related to land allocation and misdistribution. On the other hand, the initiative to purchase cars for Egyptians abroad succeeded and achieved about $2.5 billion. .
Hassanein stressed that investments by Egyptians abroad in the real estate sector in Egypt declined as a result of exaggerated prices valued at a higher value, which contributed to reducing their inflows to Egypt to invest in this sector, and the matter requires dealing more professionally with Egyptians working abroad.
The necessity of opening government bank branches in the Gulf
Hassanein called for the necessity of opening bank branches for government banks such as the National Bank of Egypt and Banque Misr in the Gulf countries, which have more than 10 million workers, as well as Africa, in order to make it easier for them and contribute to attracting more capital to workers abroad and pumping it into Egyptian banks, especially since, for example, there are large Employees working abroad whose monthly salary may reach one million dollars while working in international companies outside Egypt.
Hassanein confirmed that there are also African countries in which Egyptians work and bank branches can be opened there, especially Senegal, Nigeria, South Africa, Tanzania, Côte d'Ivoire, Angola and Botswana, which are countries rich in diamonds and oil and have major Egyptian companies such as El Sewedy and Orascom. These companies obtain the output of their work in dollars and thus it can be transferred through these companies. There are banks where Egyptians feel confident and reassured when dealing with them.
Remittances from Egyptians abroad are a major source of hard currency
Dr. Ayman Zohri, founding president of the Egyptian Society for Migration Studies and professor at the American University in Cairo, attributed the reason for the increase in remittances from Egyptians abroad during the second quarter of this year to the disappearance of the imbalance that existed in the banking market through the presence of two prices for the dollar, one in the official market and the other in the parallel market, where the banking market has now become. More stable and disciplined, which encouraged many Egyptians abroad to put their savings in the safe path through the legitimate channels of the banking system.
Zohri explained that remittances from Egyptians abroad are a major source of hard currency, noting that about 80% of the hard currency comes from Egyptians working in the Gulf countries.
Establishing good programs from the Ministry of Investment to attract the money of Egyptians abroad
Zuhri added that there are good programs developed by the Ministry of Investment and the General Authority for Investment to attract the money of Egyptians abroad, and there is Law No. 111 of 1983, which gives them the same benefits that a foreign investor gets when investing their money in Egypt, which is the law related to immigration and care for Egyptians abroad.
Dr. Alia Al-Mahdi, former Dean of the Faculty of Economics and Political Science at Cairo University, says that there is clear stability in the banking market that has allowed Egyptians’ money abroad to return to its normal path, which is the banking system.
She added that the banks make a good investment when they receive this money, and it enters the economy and has good results on foreign exchange in the country.
Remittances from Egyptians working abroad recorded their highest level in two years, according to data from the Central Bank of Egypt, where the value of remittances reached 7.5 billion dollars in the second quarter of the current year 2024, compared to about 5 billion during the first quarter. On an annual basis, these transfers grew by about 63%. It recorded $4.6 billion in the second quarter of 2023.
Branches of the National Bank and Egypt Bank abroad
It is noteworthy that government banks have a limited presence in the Gulf countries and Africa, as the National Bank of Egypt is present in Sudan. It also has a representative office in the Ethiopian capital, Addis Ababa, and a representative office in Johannesburg, South Africa, while it is present in the Gulf countries through representative offices in Riyadh and Al-Khobar. Oujda in Saudi Arabia. The National Bank is also present in the Gulf countries through representative offices in Dubai and Abu Dhabi in the United Arab Emirates and Kuwait.
Banque Misr is present in Africa through a representative office affiliated with it in Kenya, according to its website, but Mohamed El-Etreby, former president of Banque Misr, mentioned in previous press statements that the bank obtained the approval of the Central Bank to launch representative offices in Somalia and Tanzania.
The Banque Misr aims to open 15 branches in African countries as part of the expansion plan to support trade relations between Egypt and the rest of the African countries, according to Mohamed El-Atreby.
Banque Misr is also present through its branches in the United Arab Emirates through the regional center for Gulf branches in the city of Business Bay there, in addition to its branches in Abu Dhabi branch, Business Bay branch, Deira branch, Sharjah branch, and Ras Al Khaimah branch.
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