Egypt Names Former Investment Banker as Finance Minister

Updated on
  • Senior World Bank economist named as deputy finance chief
  • Economy is struggling with dollar shortage, tourism decline

Egypt replaced the ministers of finance, investment and tourism in a cabinet reshuffle as the most populous Arab country seeks to restore confidence in its economy and revive a tourism industry reeling from the Russian plane crash over Sinai last year.

President Abdel-Fattah El-Sisi named Amr El-Garhy, a former executive at investment bank EFG-Hermes and a board member of investment firm Qalaa Holdings, as finance minister, replacing Hany Kadry Dimian. Ahmed Kouchouk, a senior World Bank economist, will be one of El-Garhy’s deputies.

Dalia Khorshid, an Orascom Construction executive, was named investment minister. Mohamed Rashed was appointed as tourism minister. The cabinet reshuffle also includes the ministries of transportation and aviation.

The announcement caps a series of measures meant to attract foreign investment to ease a dollar shortage hurting economic growth. The central bank devalued the currency by more than 10 percent this month and said it will adopt a more flexible exchange rate. Policy makers also raised the benchmark interest rate the most since at least 2006.

‘Good Choice’

The appointment of El-Garhy, who also served as the head of the state-owned National Investment Bank, is a “good choice because he combines private sector experience with experience in public finance and government,” said Reham ElDesoki, senior economist at regional Dubai-based investment bank Arqaam Capital. “The same goes for Ahmed Kouchouk, who is technically capable and has a very good understanding of how the bureaucracy operates.”

Kouchouk, who holds a post-graduate degree from Harvard University, was the director of the Finance Ministry’s macro-fiscal policy unit between 2010 and 2013, according to his LinkedIn profile.

Sherif Attia was named as aviation minister and Ashraf El Sharkawy, a former financial markets’ regulator, as minister in charge of public-sector companies.

The benchmark EGX 30 Index of equities rose 0.8 percent as of 1:59 p.m. in Cairo.

While the announcement may have bolster positive sentiment in the market, investors have learned “over the past five years not to pass judgment based on names,” said Wafik Dawood, portfolio manager at Compass Capital. “Some people are brilliant but when they are put in an official position they don’t deliver.”

Egypt has struggled to attract investments since the 2011 uprising that ousted Hosni Mubarak. Aid from Gulf Arab allies has dropped and the tourism industry was dealt a new blow after the downing of a Russian passenger plane over Sinai. An affiliate of the Islamic State militant group claimed responsibility for the incident.

— With assistance by Tamim Elyan, Ahmed A Namatalla, and Tarek El-Tablawy

(Updates with economist comment from the fifth paragraph.)
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