From Investment to Influence: How the UAE Shapes the Egyptian Economy

In under three years, the United Arab Emirates has emerged as Egypt’s largest foreign investor, securing strategic holdings across the banking, real estate, petroleum, logistics, and healthcare sectors. Leveraging its sovereign wealth fund (ADQ) and affiliated companies, the UAE has executed major acquisition deals exceeding $50 billion since 2022, encompassing significant stakes in top banks, energy firms, ports, and real estate developments in Cairo, Alexandria, and the North Coast.

The Egyptian government defends these transactions as part of its “state asset sales policy” designed to attract foreign capital. However, this investigation — drawing on open sources and official records — delves into how the UAE has effectively become the primary controller of vital parts of Egypt’s economy. It also highlights rising concerns that these agreements could reduce Egypt to a dependent state, influenced by the UAE’s political and economic agendas.

Large-scale takeovers

Under mounting financial pressure, the Egyptian government introduced the “State Ownership Policy Document” in late 2022, outlining a plan to scale back its presence in key economic sectors, making way for private and foreign investors. Documents reveal that between 2022 and 2024, assets valued at $30 billion were privatized, with the lion’s share acquired by Abu Dhabi’s sovereign wealth fund (ADQ) and Emirati firms such as Emaar, Al Otaiba, and Global Ventures.

ADQ purchased an 18% stake in Commercial International Bank (CIB), Egypt’s largest private bank, for $1.805 billion. It also acquired a 25% stake in Fawry, an electronic payments company, expanding its influence in the financial services sector.

In the energy and petroleum industries, Emirati companies secured 25% of Abu Qir Fertilizers and 20% of the Egyptian Linear Alkyl Benzene Production Company (ELAB), two of the country’s leading producers of fertilizers and petrochemicals. Additionally, Abu Dhabi National Oil Company (ADNOC) acquired a stake in Alexandria Mineral Oils Company (AMOC) through a $600 million transaction.

The UAE’s most recent acquisition encompassed three Egyptian petroleum companies simultaneously. On October 30, the Egyptian Competition Authority approved three requests from Alpha Oryx Limited, an ADQ subsidiary, to obtain stakes in these firms in a deal valued at $800 million.

Moreover, a 25% stake in the Egyptian Drilling Company — a prominent state-owned enterprise in Egypt, the Middle East, and North Africa — was sold. Owned by the Egyptian General Petroleum Corporation and founded in 1976, the company operates 70 drilling rigs, two offshore platforms, and employs approximately 5,000 Egyptians.

In addition, 30% of the Egyptian Ethylene and Derivatives Company (ETHYDCO) was acquired. Established in 2011 with a total investment of $1.9 billion, ETHYDCO stands as a petrochemical leader in Egypt and Africa, producing high-quality polybutadiene and polyethylene for global markets.

Ports, logistics, real estate, and urban planning

The Egyptian ports sector has also been a focus of Emirati attempts at control. In 2023, the UAE signed a deal to acquire the container terminal at Sokhna Port, a key Red Sea port in Egypt, for $1.2 billion. Dubai Ports World also secured the rights to operate and develop the container terminal at Damietta Port for 30 years, with an investment of up to $500 million.

Toward the end of last year, the Red Sea Ports Authority and the Abu Dhabi Ports consortium finalized a contract for the construction and development of the multi-purpose Safaga 2 terminal at Safaga Port, as announced by the Egyptian Cabinet. Under the agreement, the Safaga Company was granted the responsibility to operate the terminal under a free zone system, with the commitment lasting for 30 years starting from the land handover.

In February 2024, the UAE acquired the Ras Hekma City development project in a deal valued at $35 billion, which included $24 billion in cash and $11 billion through the conversion of Emirati deposits in the Central Bank of Egypt.

The Ras Hekma deal came just one month after two Emirati firms, ADQ Holding and ADNEC, acquired a significant stake in historic hotels in Egypt, purchasing 40.5% of “Icon,” a company owned by Egyptian businessman Hisham Talaat Mustafa.

This company, owned by the Egyptian entrepreneur, had previously bought a 39% stake in “Legacy” Hotels, a government-owned group that holds a portfolio of seven historic hotels in Egypt, including Sofitel Old Cataract Aswan, Movenpick Aswan, Sofitel Winter Palace Luxor, Steigenberger Tahrir, Steigenberger Cecil Alexandria, Marriott Mena House, Marriott Cairo, and the Omar Khayyam Casino.

After this acquisition, the “Icon” portfolio expanded to 15 hotels and luxury properties, totaling about 5,000 hotel rooms in prime locations across Cairo, Luxor, Alexandria, and Sharm El-Sheikh.

In July 2024, the Egyptian government entered negotiations with Emirati businessman Mohamed Alabbar, chairman of Emaar Properties, to develop downtown Cairo and transform it into a version of “Downtown Dubai,” which would involve selling historical buildings to Emirati investors.

Dominating the healthcare industry and taking control of testing laboratories

In recent years, Emirati firms have significantly expanded their influence in Egypt’s healthcare sector by acquiring prominent hospitals and laboratories. One key player, Emirati firm Abraaj Capital, through its subsidiary Integrated Diagnostics, purchased Al Borg Laboratories and El Lab, which collectively operate over 1,700 laboratories in Egypt.

This acquisition allowed the company to capture 50% of the private medical testing market. However, Abraaj Capital exited the market in 2016, leaving Integrated Diagnostics in control, which now oversees Al Borg Laboratories, El Lab, Al Borg Scan, Mega Lab, and the Medical Genetics Center.

The UAE also owns 12 private hospitals in Egypt, such as Cairo Specialized, Cleopatra, Badrawi, Nile, Al-Kateb, and the International Peace and Dar Al-Fouad hospitals. Moreover, the Emirati-owned New Medical Center Group took over the Alexandria Medical Services Center. Emirati companies have also acquired Wiyak Pharmaceuticals, UniLab, and Elixir Endoscopy. Additionally, Premium Healthcare, another Emirati firm, purchased five medical companies and laboratories for 1.4 billion Egyptian pounds, further consolidating the UAE’s control over the pricing of medical services in Egypt.

By 2024, Egypt had become the most profitable market for Integrated Diagnostics, with a 35% growth compared to 2023.

The role of the Egyptian sovereign wealth fund in enabling transactions

The Egyptian government established the “Egyptian Sovereign Fund” in 2018 to manage underutilized state assets. However, an investigation by ‘Taqasee’ reveals that the fund has become a primary tool for transferring public assets to Gulf investors, especially from the UAE, without any parliamentary oversight.

In 2020, President Sisi issued a decree removing the public benefit status from state-owned properties, allowing the sovereign fund to sell them directly. As a result, the fund sold the Tahrir Complex, the Ministry of Interior, and five other government assets to Emirati companies.

By 2024, the government transferred 32 state-owned companies to the fund in preparation for their sale, effectively removing them from governmental accountability.

The UAE’s acquisitions in Egypt go beyond regular financial investments and represent a form of strategic economic expansion, raising concerns about their potential impact on Egypt’s economic and political sovereignty. This is particularly concerning due to the lack of transparency and fair evaluations in some of these deals, such as the offers for Hermes and CIB, where the companies were valued below their true worth.

These investments focus on acquiring existing businesses rather than fostering new ventures, which means they do not create new productive value but instead shift profits abroad. This is happening at a time when Egypt is grappling with an economic crisis and the depreciation of the Egyptian pound.

There are also monopoly risks if the UAE gains significant control over sectors like real estate, healthcare, or financial services, potentially increasing prices or reducing options for citizens, while transferring profits abroad in dollars, which could further strain the Egyptian currency in the future.

Politically, the UAE has a track record of using economic power as leverage for political influence in other nations, especially regarding differences with Egypt on crucial issues, such as the war in Sudan and support for the Rapid Support Forces, while Egypt backs the Sudanese military. Additionally, the UAE’s open relationship with Israel contrasts with Egypt’s political stance. Similar cases have been seen, such as when Kenya canceled a deal to sell the Mombasa port to the UAE due to sovereignty concerns.

In the United States, despite a much larger economy, Congress rejected a 2006 deal for Dubai Ports World to acquire U.S. ports over national security concerns. In contrast, Egypt is selling critical assets with few restrictions, making it an outlier compared to other countries that safeguard their strategic sectors.

المصادر:

property policy document
eparticipation.idsc.gov.eg
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