The Egyptian pound weakened against the dollar again last Wednesday in a second dip since the Central Bank of Egypt announced the flotation of Egypt’s currency on October 27, 2022. The pound has devalued by more than 70% since March 2022, a problem that has been intensified by Egypt recording its highest inflation rates in five years. 

The Central Bank is moving toward a free-floating pound in order to receive financial assistance from the International Monetary Fund (IMF), but what does this mean for average Egyptians? 

How Many Exchange Rates Exist Right Now?

First, it is important to note that not every industry in Egypt uses the official pound-to-dollar exchange rate. The Egyptian government sets an official rate but other industries may use a parallel rate, also known as a black market rate. As of mid-January, the official government rate is about 29 pounds to the dollar, but certain areas in the private sector, such as auto dealers, use a rate of around 35 pounds to the dollar, says Hany Genena, adjunct faculty member in the Department of Management.

This most recent dip in value should not impact those private sectors that already maintain a weaker exchange rate. “The private sector already prices its products and services using an exchange rate of 30 to 35 EGP to one USD, depending on industry. So, on the margin, the recent moves shouldn't add much to an already high inflation rate,” explains Genena.

Meanwhile, Egypt’s dollar shortage is causing some prices to continue to rise. “Producers of food and beverage are facing a decline in their inventories of raw materials and finished products due to dollar shortage. So, the limited supply is triggering an upward increase in the selling price,” Genena says. 

In the public sector, government subsidized commodities, like fuel and food items, will change prices as well. “The price of goods and services from the government will change, since they follow the official exchange rate. Hence, inflationary pressures will likely continue to grow and hopefully peak by the second financial quarter of this year, which is April 1 to June 30,” Genena states. 

What Does the Future Hold?

How much lower can the pound’s value go? Hopefully, it should be stabilizing soon, Genena says. The government is slowly staging down the value of the pound to match the real market value, otherwise known as free-floating. If the government sticks to schedule, the pound should reach its final, lowest value by the second financial quarter of 2023, Genena forecasts.

“I believe the EGP may overshoot temporarily to 32 or 33 pounds per dollar before appreciating during the second half of 2023 to around 28 pounds per dollar,” he predicts. 

This should open up more channels for imported goods, an area which Egypt has been struggling with since the beginning of the war in Ukraine. 

“The first benefit of floating the pound is that Egypt will receive official funding from multilateral partners like the IMF, who required the decision for their collaboration agreement,” states Genena. “The second benefit is that once the government scales down the value of the pound to its real market value, it will simplify the foreign exchange into a single rated currency. This will encourage private imports that should alleviate the import shortage.” 

While the government and international organizations are initiating this long-term plan, Genena states that the average Egyptian still has to cope with the short-term fallout. “While inflation may not increase substantially with this last devaluation, it remains high — putting financial strain on families across the country, particularly those in the middle or lower classes who do not own USD, properties or stock,” he says. 

What Can Egyptians Do?

Some banks are encouraging Egyptians to save money by offering certificates of deposit. A certificate of deposit allows an individual to deposit money in the bank, under the assumption that they will not withdraw that money for an entire year. In return, the bank will apply an increased interest rate on that money, compared to the interest rate on a normal deposit that could be withdrawn at any time, making it a better long-term investment. This should improve inflation rates in the long term, as it did when certificates of deposits were used during the currency devaluation of 2017.

Genena advises that low-income families should take advantage of support programs from the government, while middle-income families should invest whatever they can from their savings into inflation-proof assets, such as gold coins, stocks, or the certificates of deposit. 

Thankfully, there is a light at the end of the tunnel for Egypt, according to Genena. “It is important to remember that a key strength Egypt possesses at this stage is that banks are well-capitalized and capable of absorbing shocks. Egypt should be able to sustain growth - no matter how anemic - despite the magnitude of the financial shock,” he concludes.

A “just transition” seeks to create equilibrium between developed and developing countries.

As major flooding wracks Pakistan, droughts choke much of East Africa and wildfires raze Australia, it is becoming clear that the consequences of climate change are not distributed equally across the globe. Industrialized countries in the Global North, particularly those with strong colonial histories, have the worst carbon emission records. Yet it is the Global South, with relatively lower emissions, that is bearing the brunt of the resulting environmental catastrophes. 

Ali Awni, professor of practice in the Department of Management and director of AUC’s John D. Gerhart Center for Philanthropy, Civic Engagement and Responsible Business, explains the need for a “just transition” to address this inequality.

To read the full article, click here.

The U.S. Agency for International Development (USAID) has awarded The American University in Cairo (AUC) $86 million for USAID Egyptian Pioneers, a new program that provides scholarships and training to Egyptian students with emphasis on sectors that can advance Egypt’s climate goals. Through a nine-year cooperative agreement, AUC will administer the program in coordination with the Ministry of Higher Education and Scientific Research, the Ministry of International Cooperation, and private and public sector institutions. Prioritizing women’s empowerment, diversity, inclusion and climate resilience, the USAID Egyptian Pioneers will build and develop the capacity of a cross-disciplinary network of public, private and academic entities. The program includes:

• Scholarships for at least 700 young Egyptians (50% women) from underserved communities to obtain undergraduate degrees in Egypt
• Scholarships for at least 60 midcareer government professionals to obtain master’s degrees in the United States or Egypt
• Scholarships for at least 50 midcareer government professionals to pursue postdoctoral studies in the United States
• U.S. and Egypt-based technical training for at least 280 midcareer Egyptian government professionals and at least 220 mid-career professionals from non-public entities

Accordingly, more than 500 Egyptian women will engage in leadership and professional training, undergraduate and postgraduate scholarships, and study-abroad programs in the United States.

AUC President Ahmad Dallal said, “Leading the USAID Egyptian Pioneers program is a great honor for AUC. We commit to extending our longstanding leadership and excellence in education, capacity development and training to ensure the sustainable integration of the public, private and academic sectors. Egyptian Pioneers will surely leave an enduring impact on Egyptian society, advancing Egypt’s economic development and progress toward its Vision 2030. We thank the U.S. government and the Ministry of Higher Education and Scientific Research as we endeavor together on this partnership journey,” 

USAID Deputy Mission Director Margaret Sancho stated, “Climate change is an enormous challenge for all people, all over the world. But we also know that women and girls bear a disproportionate burden of its impact. Despite this, women and girls are leading climate change solutions in their communities. That is why USAID’s Egyptian Pioneers program will include leadership and professional training, undergraduate and postgraduate scholarships, and study-abroad programs in the United States for more than 500 Egyptian women."

For the first time, AUC’s School of Business hosted the 2022 CEMS Annual Events and Master of International Management (MIM) graduation ceremony at the Pyramids of Giza, celebrating the graduation of more than 1,200 CEMS graduates representing 78 nationalities from 34 business schools around the world. 

“We are honored to host such a great event for the first time in Africa and the Middle East,” said Hakim Meshreki (MA ‘05), assistant professor and CEMS MIM academic director at the School of Business. “This event brings together all the CEMS family once again after two years off due to COVID-19.”

CEMS Global Alliance in Management Education is an international network comprising 34 of the world’s top business schools, 70 multinational companies and eight NGOs that together offer the CEMS Master in International Management. 

AUC joined CEMS in 2017, becoming the first business school from the Middle East and Africa to join the alliance. The University welcomed its first CEMS MIM cohort two years later. Today, 16 students have graduated from the first two cohorts, with the third cohort graduating this year. 

“We are proud to be the first business school from the Arab region and the African continent to join the CEMS network,” said Sherif Kamel '88, '90, '13, dean of the School of Business. “The CEMS program, with its unique mix of global exposure, rigorous syllabus and powerful combination of theoretical knowledge and experiential learning, is a perfect fit with the school’s goals and aspirations in developing truly global responsible citizens.” 

The CEMS Annual Events featured a series of plenary sessions, networking and corporate meetings for the CEMS global network and social events, which took place on and off AUC’s New Cairo campus.

Learn more about the CEMS network at AUC.

Watch the full graduation ceremony

The first of its kind in Egypt, Eltoukhy Learning Factory for Innovation and Entrepreneurship brings together AUC students, faculty, entrepreneurs and industry. It will help students strengthen their multi-disciplinary and problem-solving skills, preparing them for careers in diverse professional sectors. Modelled on learning factories at other universities worldwide, the Eltoukhy Learning Factory will be located in AUC’s School of Sciences and Engineering on the New Cairo campus. 

Made possible through the generous support of AUC Trustee Atef Helmy Eltoukhy '74 and Fofa Eltoukhy, the Eltoukhy Learning Factory is a new innovative teaching and workshop environment to allow students to take ideas from the classroom and develop creative solutions to real-world problems.     

“This region presents complex challenges not limited to one professional sector or industry,” said AUC President Ahmad Dallal. “We are extremely grateful to Dr. and Mrs. Eltoukhy for this transformational gift, which will create a unique collaborative and multi-disciplinary learning environment at AUC. We are excited to see the entrepreneurship and creative projects that will result.”

As part of their “capstone projects” at the culmination of their studies, students will be empowered to develop their ideas, and bring them to fruition, by accessing the resources of the Eltoukhy Learning Factory and the expertise of AUC faculty. It will combine classroom teaching, hands-on learning and teamwork, and real-life applications. The students will also benefit from interaction with representatives from industry and other sectors that may bring partnerships or industry-sponsored challenges. 

“My family and I are proud to have had a long association with AUC” said Eltoukhy. "As Egypt's leading university, AUC plays a critically important role in preparing the next generation of leaders and problem solvers. It is essential that we provide them with the links to real-world problems and industry, well before they graduate. We are pleased to be able to support those experiences, and give students an opportunity to fully explore their ideas, and to realize projects through the Learning Factory."

If students are to have the competitive skills and knowledge that are required upon graduation, they will need experience with the latest technology and equipment. The Eltoukhy Learning Factory will allow students to develop their projects, benefiting from state-of-the-art equipment and diverse tools. The Factory will feature new equipment such as laser cutting, bench-top Computer Numerical Control (CNC) machines, waterjet, and 3D printing. Additional equipment will include various electronic control and testing equipment, and Internet of Things capabilities. The students will be supported by AUC faculty members from diverse departments including computer engineering, electronics and communications engineering, and mechanical engineering. Other AUC disciplines may also be involved, including arts and graphic design.

AUC graduates have a strong track record of generating successful startups. The Eltoukhy Learning Factory will be closely linked to the AUC Venture Lab that will help prototype startup ideas, and transform successful projects into new startups. AUC’s newly developed Virtual Reality lab will also be integrated with the Learning Factory, to allow for virtual prototyping prior to fabrication and testing.

An AUC Trustee, Eltoukhy is an Egyptian-American entrepreneur, former University of Southern California professor, scientist and the Founder and Chairman of Aurum Capital Management, an investment management firm. Eltoukhy has also authored many patents and publications in semiconductor and magnetic thin film technology. He is Chairman of the Eltoukhy Family Foundation, and he and his family have been philanthropic supporters of education in Egypt and the United States.    

Dean of the School of Sciences and Engineering Lotfi Gaafar, said, “We are very excited about the new Eltoukhy Learning Factory for Innovation and Entrepreneurship. It will significantly improve students’ experiential learning through expert supervision and better access to materials, tools, and equipment. This promises to have a substantial impact on students in the various sciences and engineering majors, and those from other disciplines across the University.”  

Describing the transformative impact of the lab, Board of Trustees Chairman Mark Turnage said: “The Eltoukhy Learning Factory draws upon international best practices. It will empower our students and enable AUC to remain at the forefront of innovation and practice in Egypt, and relevant to the needs of industry. We are very appreciative of this visionary gift from Atef and Fofa Eltoukhy.”   

The Egyptian pound has dropped dramatically against the dollar after the Central Bank of Egypt announced the flotation of Egypt’s currency on October 27, as the Egyptian government secured a three-billion dollar loan from the International Monetary Fund (IMF). Dina Abdel Fattah, assistant professor and chair of the Department of Economics, explains why the government pursued this loan and what it means for the average consumer.

Why does Egypt need money from the IMF?

The government has many bills to pay, including the wage bill of the public sector and the subsidy bill. The sources of incoming revenues for the government, on the other hand, are very limited and will not cover the bills. To close this financing gap, the government secured a loan from the IMF. 

What does “floating a currency” mean?

This means the forces of supply and demand will determine the price of the currency. A floating currency should witness different values according to the season of peaks and troughs with sources of foreign currency.

What does an IMF loan mean for the economy in the short-term and long-term? 

In the long term, this loan means another financial burden and obligation. In the short term, it means fresh funds to help close the financing gap.

Why did the government originally decide to restrict imports?

Imports means you are buying products from abroad to be paid for in foreign currency. With the increasing financial commitment on the government budget in the form of expenditures in foreign currency (imports and payments of debt and the service of the debt) with limited sources of foreign currency (tourism, Suez Canal and remittances of Egyptians abroad), the pressure is high and we have to prioritize. Import restriction policies have also been followed at different points in time to protect and encourage local industry.

What exactly is inflation? 

Inflation is measured using the consumer price index, which monitors the price of a basket of goods over time. If you go to the supermarket every month to buy exactly the same products, the change in price of these exact same products over time reveals the inflation rate. 

What impact is the Russia-Ukraine war having on inflation in Egypt?

The Russia-Ukraine war is having a direct and indirect impact on Egypt. Directly, Egypt is one of the world's major importers of wheat and the war is affecting the size of wheat production and export. Indirectly, the war is causing a global economic slowdown affecting the global demand on products, leading to a global slowdown, reducing the trade through Suez Canal. Additionally, people are not able to afford holidays outside their countries, reducing tourism revenue, and the economic slowdown is affecting job creation, reducing overall demand on workers, including Egyptian workers and potential workers abroad. This is impacting the main sources of foreign currency to Egypt.

What does the future look like for average Egyptians?

This question is very tricky. I believe it is difficult to characterize the "average" Egyptian now. The purchasing power of Egyptians is decreasing as inflation is increasing. An average Egyptian is an individual who has a job, pays taxes and contributes to social security, may use the private sector for the provision of social services (education and health) and hopes to provide their kids a decent life with some elements of leisure. This class keeps moving items from the list of priorities to the list of luxuries and sacrificing them, indicating a downgrade in their standard of living.

Coming from abroad or returning to their alma mater, AUC welcomed a new cohort of around 40 faculty members this fall.

While some members are experiencing Egypt for the first time, having moved from their homes in Germany, South Korea and more, other members are turning to their alma mater. News@AUC interviewed five members of this diverse cohort on their research, their decision to join AUC, and what they are looking forward to this year.

Shaimaa El Sherif

Instilling moral values such as acceptance and respect into her students is a key part of Shaimaa El Sherif’s, instructor in the Department of Rhetoric and Compositions, goals at AUC and her research in global citizenship education. She is currently working on two research projects, one on transformative learning and teaching and another on enhancing students’ 21st century skills. 

“I found out that there is no better educational institution in Egypt other than AUC to practice teaching and researching,” El Sherif states. “Honestly, I also owe AUC much of what I've learned academically and professionally throughout the past 10 years… I felt like it’s time to give back through teaching.”

El Sherif is excited to spend the year connecting with her students and helping them to become more well rounded through different teaching strategies in addition to working on her two research projects. 

Rodrigo Gratacós Brum

Guided by his academic background in philosophy and film, Rodrigo Gratacós Brum, associate professor of practice in the Department of the Arts, is a talented filmmaker and teacher who joined AUC because of its growing film program. 

“I saw it as an opportunity to have an impact in the area, helping to develop a program that is already very strong,” Brum explains. 

Brum is looking forward to getting to know his students better and learning how he can help them develop projects based on their own experiences and interests. 

Sanghyeok Lee

After studying in Australia and teaching in South Korea, Sanghyeok Lee, assistant professor in the Department of Economics, is ready for new academic adventures in Cairo. Lee studies micro-econometric theory, which includes event history and duration analysis, machine learning and treatment effect analysis.

“I am excited to have the opportunity to develop my knowledge and skills in a new place, and hopefully to be able to contribute to the local community as well,” Lee states. 

For the next year, Lee is most excited about the learning opportunities. After teaching in Korea and studying in Australia, New Cairo presents a novel experience for him to explore as an instructor and an academic.

Mariam Abdelazim

As an architecture alumna from AUC, Mariam Abdelazim, assistant professor in the Department of Architecture, is looking forward to the opportunity to give back to her alma mater. In her research she utilizes behavioral science to explore how people interact with public spaces. As a professor, she is excited to bring innovative teaching methods to her classroom. 

 “The attention span of students is different than before, so I always rely on interactive methods of teaching,” she explains. “I ask them to make TikTok videos on a building, or Instagram posts, or we play Jeopardy and do competitions, to get them interested through the type of media they are familiar with.”

Through the next year, Abdelazim looks forward to cultivating a learning community where students can learn from each other and she can learn from them.

Noah Farhadi

With over 27 years of experience in business administration, Noah Farhadi, professor of practice in finance in the Management Department and CIB Endowed Chair, is excited to continue his academic research on strategic finance, mergers and acquisitions and business ecosystems while teaching at the AUC. 

“I think to be a good professor, you need good students,” Farhadi explained. “The students at AUC are motivated, focused and engaged. So I made my choice to move here because it's a great platform for growth.”

In the next year, Farhadi is excited to experience Egyptian culture, connect with his students and contribute to the community. 

Human-centered design thinking approach is a core part of the AUC educational experience.

By integrating design thinking into the curriculum, AUC is teaching students to approach complicated problems with a sense of empathy, creativity and resilience, explained Hoda Mostafa, professor of practice and director of the University’s Center for Learning and Teaching (CLT).

Design thinking is a methodology used by Fortune 500 companies, including Apple and J.P. Morgan, to transform their way of operating and develop innovative, customer-centric products and services. International development institutions, such as the World Food Programme and UNESCO, have employed it to create policies and programs that effectively address poverty, gender inequality and other complex global challenges.

To read the full article, click here.

Five alumni from AUC's School of Business were named among Forbes Middle East's Top 100 CEOs in the Middle East for 2022.

The list's rankings are based on overall experience and time in their current role, company size in terms of revenues, assets and market cap, achievements in the last year, innovations and initiatives implemented by the CEO and impact within their country and region.

Here are the five AUCians on the list:

Hatem Dowidar ‘01  | CEO of e&

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Hussein Abaza ‘84  | CEO and managing director of the Commercial International Bank

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Adel El Labban ‘77, ‘80  | CEO of Ahli United Bank

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Elham Yousry Mahfouz ‘84  | CEO of Commercial Bank of Kuwait

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Karim Awad ‘99  | CEO and chairman of EFG Hermes

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Just five years after joining the AUC Venture Lab as a budding startup, Swvl has made its debut on the Nasdaq ––  the first Egyptian unicorn, first V-Lab graduate and first North African tech startup to list on the U.S. stock exchange. 

Entering the exchange next to other tech giants with a valuation of $1.5 billion, the fast-growing transportation company is also the second in the Middle East to list on Nasdaq via a SPAC (Special Purpose Action Committee) merger, following Anghami. The company merged in July of last year with Queen’s Gambit Growth Capital, a SPAC that boasts  being 100% female-led.

Founded by Mostafa Kandil '15, Ahmed Sabbah and Mahmoud Nouh, Swvl set out to improve public transportation in Egypt through tech-enabled ridesharing services. The company now operates in 115 cities in 18 countries across Latin America, Europe, Africa and Asia.

Kandil rang the Nasdaq Opening Bell on March 31 in a ceremony marking the company’s debut. 

"We are very excited to see Swvl's team reach this inspiring milestone,” said Ayman Ismail ’95, ’97, founding director of the V-Lab and associate professor and Abdul Latif Jameel Endowed Chair in Entrepreneurship. “At AUC Venture Lab, we take pride in having been part of Swvl's early journey and continue to be committed to being a catalyst for growth and to empowering more inspiring founders during their journeys. [Swvl is] “an inspiration to many entrepreneurs and one that paves the way for an entire generation of tech startups.”

Kandil began his studies as a petroleum engineering student at AUC but ended up seeking a more dynamic path, as he was always keen on exploring the business world. In 2017, Swvl joined AUC Venture Lab, Egypt’s first University-based accelerator and incubator which offers acceleration programs to high-growth, innovation-driven tech startups. 

In August 201, when Swvl announced that it would list on the Nasdaq, Kandil said, "I’m proud to say that being an AUC student was the start of the journey that brought me to this moment in my life."

Accelerated by the V-Lab in Cycle 8, the team was able to launch the application before graduating from the cycle. The startup has seen impressive growth since its launch, crossing Egypt’s borders and establishing roots abroad. Kandil was named — along with co-founders Nouh and Sabbah — among Forbes Middle East’s Top Arab 30 under 30 in 2018.    

To date, the V-Lab has graduated over 300 graduate startups that have gained EGP 3 billion in investments and created 10,000 jobs, leaving a lasting impact on the greater community and regional development ecosystem. In 2021, the lab was recognized as the Best Accelerator/Incubator Program in North Africa by the Global Startup Awards.

Watch Kandil ring the Nasdaq Opening Bell.