Egypt's Sisi accused of 'giving away' strategic Red Sea land of Ras Shukeir after decree
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 the past years.
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Regime critics were quick to condemn Sisi's call, 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.
'They are fooling Egyptians by saying this is not a debt-settling purchase. Sukuk is partial ownership of an asset that can be traded on financial markets'
- Egypt opposition group
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.
Tiran and Sanafir: Red Sea islands are now a chokehold over Egypt's security Read More »
'Economic dependency leads to political dependency and the loss of independence. The current economic policy is, inevitably, leading towards this direction,' Sadek told MEE.
In response to the growing debate, the Ministry of Finance said in an official statement on Wednesday that the land would not be sold but used as collateral to issue sukuk to 'secure financing under favourable terms for covering the needs of the state's general budget'. The ministry further insisted the land remains state-owned.
Ras Shukeir (also spelt Ras Shokeir) is located along the Red Sea coastline on the western coast of the Gulf of Suez, about 350km from the capital, Cairo.
The area is also strategically significant due to its maritime activities and its role as a hub for green hydrogen and ammonia projects.
'Partial ownership'
Opposition in Egypt and abroad, nonetheless, argues that Ras Shukeir holds too much strategic and economic value to be collateralised.
'We opposed the government's policy of taking further external borrowing, crying out again and again in warning of its terrible aftermath. But no one was hearing. All voices of opposition were criticised and rejected,' former presidential candidate Khaled Ali wrote in a Facebook post.
'Ramifications have been serious. We have borne the brunt of this policy through the collapse of the Egyptian pound's purchasing power and its continued decline against foreign currencies,' added Ali, also a prominent human rights lawyer.
How Egypt lost its regional power – and became complicit in Gaza's siege: One on One with Hossam el-Hamalawy Read More »
A darker scenario looms: that the sukuk issuances may not, eventually, yield sufficient revenue.
'Even if such deals bring in foreign currency, the government is giving away the country's assets and lands for temporary relief,' said a renowned economics professor, who asked to be unnamed for security reasons.
'What is going to happen when bonds mature and the revenues fall short?' he rhetorically asked.
The exiled Egyptian Revolutionary Council voiced similar concerns.
'They are fooling Egyptians by saying this is not a debt-settling purchase. Sukuk is partial ownership of an asset that can be traded on financial markets. It might be a means of land acquisition, especially if Egypt cannot pay its sukuk due… considering the regime's indecisive economic policies and ongoing corruption over the past decade,' the Istanbul-based group argued in a post on X.
National security concerns
Although the presidential decree dictates that the military will oversee strategic areas in Ras Shukeir, national security concerns remain.
'The Red Sea coast - namely around Bab el-Mandeb and the Suez Canal entry points - is of huge strategic significance, crossing military, economic and geopolitical domains,' said a retired high-ranking army officer, asking to remain anonymous for not being authorised to talk to the media.
'With rising regional tensions, especially the Houthi attacks on Red Sea shipping lanes, control over Ras Shukeir and nearby areas has become more crucial,' the retired officer told MEE.
Ras Shukeir is a key transit hub for crude oil exports and domestic energy infrastructure, linking Gulf oil flows to the Suez Canal and Mediterranean markets.
'Any disruption or foreign control in this area could jeopardise Egypt's energy security and further involve the country in the broader regional struggle over trade routes, resource flows, and political dominance,' the army veteran concluded.
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