Egypt Defence and Security Report 2016
BMI View: Heightened domestic security issues - namely those associated with Islamic State, the MuslimBrotherhood, civil unrest as well as continuing regional tensions - will be the major concern for Egypt over2016, and this will in turn see to a strong rise in defence expenditure over the year. The majority of Egypt'scurrent spending will however, continue to be focused on anti-terrorism capabilities and the procurement ofadvanced weaponry from overseas suppliers as opposed to the development of a domestic defencemanufacturing sector. As al-Sisi's military regime attempts to ensure its grip on power, we expect defencespending to maintain its upward trajectory albeit to a lesser extent as the years go on, owing to broaderfiscal constraints given the country's weak economic outlook. Furthermore, high personnel costs - given thelarge armed force's size - and endemic corruption will also continue to draw funding away frommodernisation efforts.
In March 2016, Egypt's parliament agreed to USD3.7bn in French loans to finance armamentprocurements from France. The money will reportedly go toward a variety of equipment andhardware across the Navy, Army, and Air Force.
In February 2016 Egypt received three new Rafale fighter jets from France. According to Egypt's AlAhram weekly, Egypt already received three Rafale fighter jets in July; the remaining 18 will bedelivered in batches within the next two years.
Demonstrations amongst the Egyptian youth continue in the Nile Delta, which we suspect has thepotential to be the Achilles heel of the al-Sisi's regime. The collective punishment of entire communitiesin the Sinai also places the army at risk of losing the battle of hearts and minds against extremism.
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