Egypt’s new Cabinet was sworn in on Wednesday (July 3) amid mounting public discontent owing to years of economic mismanagement, with the impact on the public exacerbated by lost tourism revenue owing to the Covid-19 pandemic and then the fallout from the Russia-Ukraine war and conflict in the Middle East.

President Abdel Fattah el-Sissi chaired the first meeting of his government, underlining the importance of completing an economic reform programme that includes unpopular austerity measures, and urging the government to work on “attracting and encouraging domestic and foreign investments,” according to his office.

The new Cabinet, led by Prime Minister Mustafa Madbouly, who has been in the post since 2018, included major changes in economy-related and defence portfolios, while some ministers, including those in charge of police, health and transportation, remain in place.

Officials have said the incoming government’s key priorities include curbing inflation — which reached a record high in September but has since fallen to about 28% in May — and boosting private sector growth and investment, whilst also cutting spending, and expanding and stabilising the North African country's energy sector.

Mohamed Maait, the finance minister since 2018, was replaced by his deputy Ahmed Kouchouk, an ex-World Bank economist who helped spearhead implementation of a reform programme with the International Monetary Fund (IMF).

Amid recurring power cuts that saw fertiliser businesses among others suspend operations, Mahmoud Esmat was named to oversee the electricity ministry.  Karim Badawi, who worked for US oil service giant Schlumberger NV for the past 28 years, succeeds Tarek el-Molla as energy minister, as Egypt works to boost production of oil and natural gas, both for export to Europe and to help end the power cuts.

With fear rising that the Israel-Hamas war will engulf the region, Badr Abdelatty, Egypt’s envoy to European countries, has been named Foreign and Migration Minister, replacing Sameh Shoukry, the country’s chief diplomat for the past decade. Gen. Abdel-Majeed Sakr has taken over the defence portfolio, led by Gen. Mohamed Zaki since June 2018. Meanwhile, Egypt's revenues from the Suez Canal have dropped sharply as Yemen’s Houthi rebels attack shipping routes on the Red Sea.

Bloomberg reported that “the government’s dollar bonds rallied on the news of the appointment of an investor-friendly ex-World Bank economist as finance minister alongside business executives and former bankers to other key portfolios, as the nation seeks to move on from the worst economic crisis in decades”.

The bonds posted some of the biggest gains in emerging markets on Wednesday, according to the news agency: “In the non-deliverable forwards market — used to hedge against declines in currencies — the pound’s 12-month contract strengthened the most since late April.”