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Saudi Arabia's sovereign wealth fund, Public Investment Fund (PIF), has put on hold its plan to acquire the United Bank of Egypt due to a disagreement with Egyptian authorities over the bank's valuation. The move is the latest setback in the vast investment program promised by Gulf states to help shore up Egypt's finances after foreign investors withdrew more than $20 billion from Egyptian markets.
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Last year, Saudi Arabia, Abu Dhabi, and Qatar pledged to make significant investments in Egypt, and Saudi Arabia deposited $5 billion with Egypt's central bank in March. In June, Saudi Arabia said it intended to lead $30 billion worth of investments following Crown Prince Mohammed bin Salman's visit to Cairo. The PIF-owned Saudi Egyptian Investment Co (SEIC) bought minority stakes in four Egyptian companies in August for $1.3 billion, but since then has not announced any substantial new investments.
Why it matters
Egypt aims to attract $10 billion in investments annually for four years to boost private participation in its economy. The country's currency has depreciated by almost 50% since the Ukraine crisis, and it signed a $3 billion rescue plan with the International Monetary Fund in December, targeting $9.7 billion in foreign direct investment by June 2023.
