18 June 2025
In a move sparking shockwaves in Egypt, President Abdel Fattah el-Sisi has approved the transfer of a massive area of coastal land in the Red Sea province for sovereign sukuk (Islamic bonds) issuances in a bid to ease the country’s soaring debt.
The decision to allocate 174 sq km of land in the oil-rich Ras Shukeir area to the Ministry of Finance to use as sukuk has not been preceded by public parliamentary debates or discussions within civil society.
Neither has the decree – published in the official gazette on 10 June – provided further details. The announcement only detailed the coordinates of the parts of the land.
Sukuk are Islamic financial certificates similar to bonds, but structured to comply with Sharia law by involving shared ownership in tangible assets or investment ventures rather than interest-based debt.
The announcement comes as Egypt intensifies its search for means of alternative financing to ease pressure on foreign reserves and contain mounting external debt amid a challenging economic crisis that has hit the country hard over recent years.
Government critics were quick to condemn Sisi’s initiative, viewing it as part of a broader state asset sell-off and an attempt to attract Gulf investors through Islamic Sharia-compliant financial deals.
Last year, Egypt signed a $35bn deal with Abu Dhabi’s ADQ sovereign fund to develop Ras el-Hekma on the Mediterranean coast. The agreement provided an injection of hard currency and temporarily eased pressure on the Egyptian pound.
Despite technical differences between the two arrangements, economists believe the government is trying to replicate that model: using land assets to generate liquidity.
“The move reflects a broader government policy of converting government-held assets into cash to finance debt issuance or meet ongoing financial obligations,” financial analyst Ahmed Abdel-Thaher told Middle East Eye.
“In this case, land – traditionally a non-liquid asset – is being leveraged to generate instant revenue. This way, returns are tied to the projected development or rental income of the land,” he explained.
Egypt’s external debt stands at nearly $155bn. Before the current fiscal year ends on 30 June, the country is committed to repaying around $60.8bn of that total.
“The Egyptian regime adopts a policy of hegemony of decision-making… and the external support [of Gulf nations]… when the Saudis or the Emiratis come to the rescue,” said political sociologist Dr Said Sadek.
Source: MEE
