New Central Bank of Egypt’s acting governor, old faces in a time of crisis (Part-1)

President Abdel Fattah El-Sisi issued a decree on 18 August to appoint veteran banker Hassan Abdallah as the acting governor of the Central Bank of Egypt (CBE).

Hassan Abdallah

Amidst a hard economic crisis, former Governor of the CBE Tarek Amer presented his resignation from his position on a day earlier after serving seven hard years. News or rather rumours spread on news websites that Sisi dismissed Amar first.

The nephew of Egypt’s infamous Abdel Hakim Amer was appointed as a presidential advisor.

Whether he was dismissed or resigned or was told to resign, it had a very positive impact on Egypt’s stock exchange.

Amer presented his resignation a day before the meeting of the scheduled meeting of CBE’s Monetary Policy Committee (MPC) which many expected to raise the key interest rates and thus lead to more depreciation of the Egyptian pound.

The MCP meeting kept the interest rate unchanged for the time being after knowing the news of Amar’s resignation.

Abdallah is an acting governor till the House of Representatives approves his appointment according to the constitution. In other countries, we would have a hearing session and see serious questions about the acting governor vision’s on how we can fix the monetary policies in a time of global economic crisis.

Ironically earlier when we had that cabinet’s reshuffle, there was a rumour that Tarek Amer was dismissed from his position on that day earlier as part of the reshuffle but it was debunked by his deputy governor.

On the same day, notorious Ahmed Moussa slammed on TV those who claimed that Amer resigned “not dismissed” claiming that they were attempting to “harm” the Egyptian economy.

Two days before the resignation news, pro-regime media focused on how Global Finance Magazine chose Amer among the Top 20 Central Banks governors for 2022. It was his second time for the second year in a row to be chosen by that magazine surprisingly. He was chosen in the Top ten in 2021.

Then we got the news Amer resigned. The media did not ask what happened on those days or why we had rumours about his resignation that were debunked at the beginning of the week before he would present his resignation to the President and to be accepted before the end of the week.

Hassan Abdallah in his meeting with President Abdel Fattah El-Sisi in 
the new Presidential Palace of New Alamein City 

The media did not ask or discuss the letter he sent to Prominent Egyptian columnist Farouk Gouida earlier in August that was published in two parts in Al-Ahram Daily Newspaper.

Amer defended himself in the letter against the attacks in the media. In the first part of the letter published on 6 August, the former CBE governor says that those put the basis of the current monetary and economic policies were the same ones who attack him and his policies in the media including the privatization and the extreme open-export policies that led to a negative impact on Egyptian industries.

In the second part of the letter published on 7 August, Tarek Amer says explicitly that the economic and monetary policies pre-2011 led to what we have now and currently the Egyptian state is fixing the mistakes of those policies.

Personally, I do not see this letter as truly detailed defence but still, that letter has been ignored somehow in the media. Now it is being shared widely on social media as proof the veteran banker wanted to jump from the ship earlier. 

We leave Amer for a while, but he is coming back because when it comes to what was between the new and old governors of CBE is very interesting and surreal by all measures.

The new acting governor, The old face facing new challenges 

Many are putting lots of hope that Hassan Abdallah would be the man who can save the ship from sinking, the man who will fix Amer’s sins and will be to say no to the political leadership in the country when the time comes because he understands the economy well.

Others believe that Abdallah will be the man who will do what the International Monetary Fund wants by devaluing the Egyptian Pound more by implementing more neoliberal policies.

But who is Hassan Abdallah!?

Currently, the mainstream media as well as the social media are focusing on the fact that 1960-born Abdallah was appointed the CEO of United Media Services (UMS), Egypt’s biggest media conglomerate.

The board of the formerly known Egyptian Media Group appointed Abdallah as a CEO in May 2021 in an attempt to turn that colossal media machine into a source of profits instead of expenses.

He announced a roadmap for the group currently controlling the media in Egypt including listing its stocks on the stock exchange and reviving that that Al-Jazeera Network’s rival channel.

The affiliation of the UMS to the State is not a secret now in Egypt and thus some say Abdallah is the State’s man “not stateman” despite the fact Amer was the State’s man till last week.

Some Pro-Islamist opposition supporters say that he is a showbiz man despite he only headed that group for a year and a couple of months ignoring the fact that he has been a banker for most of his life.

Graduating from the American University in Cairo (AUC) with a BA in Business Administration in 1982, Abdallah joined the Arab African International Bank (AAIB) in the same year.

After 20 years of working in Egypt’s first Arab multinational bank, Abdallah became its CEO in 2002.

He was also a board member at several well-known companies in Egypt including Ghabbour Auto Coca-Cola, Endeavor Egypt, Telecom Egypt, and Orascom Construction.

Hassan Abdallah was among the top banker members of the former NDP’s policies Committee headed by none other than Gamal Mubarak. Already, he is known to be from Mubarak Jr’s close circle.

His photo with Prime Minister Mostafa Madbouly and IMF executive director Mahmoud Mohi El-Din in New Alamein during a meeting following his appointment as acting CBE governor reminded many of the policies committee days.

Mahmoud Mohi El-Din, Hassan Abdallah and Mostafa Madbouly
in their meeting at the new government HQ in New Alamein

Hassan Abdallah currently took a couple of decisions that are good for the market as he continues meeting with businessmen, industrialists and bankers in hope of moving things in a positive way. 

We are all waiting for the inevitable to happen and the Egyptian pound loses more of its value at the request of the IMF within weeks according to some expectations.

Egypt is already in the final stages of talks to take another IMF loan soon according to PM Madbouly.

The thing now I believe that we need an economist now and not a banker to head the CBE in this critical time. Needless to say, the last five governors were all former bankers, yet here we are. We need an economist with the freedom to put a monetary policy for real. 

Anyhow good luck with Abdallah. 

Off the record, many say that appointing Abdallah as the new governor of the CBE replacing Amer is actually a slap to Amer because Hassan Abdallah is his long nemesis with a history that makes it and that’s what we will see in the second part of this post.

A little bit of financial Egyptian summer gossip.