In the current global political climate, both Egypt and Turkey are suffering economically. To focus on rebooting their respective economies, they’ve decided to let bygones be bygones and raise the flag of ‘economy first’.

Proof of this economic rapprochement has started to trickle in. Turkish companies have been benefiting from Egypt’s low monthly wage which averages $150 to expand their production of cars, food products, household electronics, and textile. Similarly, Turkish tourism companies benefit from Egypt’s tourism visa that is granted upon arrival. Turkish defence firms have become a regular in Egypt Defense Expo (EDEX) marketing the country’s latest advanced defence products (including Turkey’s popular Bayraktar drone), with preliminary deals signed with the Egyptian government.

Sunni Muslim Brotherhood

The two countries falling out goes back to the years surrounding the Arab Spring. Turkey, a strong supporter of Egypt’s moderate Sunni Muslim Brotherhood, had opened its door to members of the Brotherhood after Abdel Fattah el-Sisi took over the presidency in 2013 following the ouster of Islamist president Mohamed Morsi. Ankara and Istanbul had since become home to thousands of Brotherhood-affiliated media outlets that radically opposed Sisi and his political regime. Such support to the Brotherhood has seen Cairo openly accuse Turkey of aiding extremism.

Since 2013, it had been normal to see Turkish president Recep Tayyip Erdogan be described by Egyptian pro-government newspaper (private and public) editorials as “the bloody Ottoman Caliph”, “the main sponsor of all extremist groups and the helper of the terrorist Muslim Brotherhood.”

Now, these same outlets are celebrating the shy but growing reconcilation between Cairo and Ankara, which has slowly taken place since presidents Abdel Fattah Al-Sisi and Erdogan met and shook hands during the 2022 World Cup in Qatar. This was followed by several calls and visits. The latest and most major being Erdogan’s trip to Cairo and meeting Sisi in February.

Libya, the economic saviour for Ankara and Cairo?

Although there is an economic potential of $15bn between Egypt and Turkey in various fields from free trade to nuclear energy, according to Sammy* an Egyptian diplomatic source, Cairo has a particular focus on Libya, believing it will open a major door for foreign currency.

Sammy, who was part of the Egyptian delegation accompanying Foreign Minister Sameh Shoukry to his visit in Turkey in April 2024, tells The Africa Report, that one of Egypt’s priorities is to invest in a positive relationship between Cairo and Ankara to eventually reach a consensus about the Libyan crisis.

“The talks revolved around many topics of mutual interest, starting with Gaza, Sudan, Somalia, but the focus was increasing the economic interaction and settling the Libyan file,” says Sammy. “The political leadership and the diplomatic meetings are focusing on common points rather than the points of dispute. It is in the interest of both governments that Libya is stable.”

Since the fall of Libyan dictator Mummar Al-Ghadafi in 2011, both countries supported opposing sides in the conflict as the country fell into chaos that was exploited by numerous radical Islamist groups and a radicalisation of the population.

Stability in Libya through Ankara and Cairo’s efforts would include the following, says Tarek* – another diplomat currently working in Egypt’s ministry of foreign affairs.

• Holding a national election;
• Ending political divisions;
• Opening the door for free political work;
• Demilitarising armed militias;
• Putting an end to the Jihadist threat.

Tarek says Cairo is looking at Libya with many economic angles, hoping it will be one of several sources of income to ease the country’s austerity.

Both Sammy and Tarek agree that Egypt could gain a lot from a pragmatic approach with Turkey from different fronts:

• The most important and timely construction contracts for Egyptian companies;
• Further EU support for Cairo to curb migration to Europe;
• A return of the Egyptian labour force to Libya.
• Egyptian companies in Libya

For Egypt, a stable Libya does not only mean a calm Western border, but also a steadier flow of construction contracts for Egyptian companies to renovate Libya.

According to statements by minister of economic affairs Salama Al-Ghwail in 2021, around $111bn are needed for the reconstruction of Libya; a share of foreign currency that Egypt is strongly eyeing amid the ongoing economic crisis.

Since 2021, several prominent Egyptian construction companies secured generous deals (more than $30bn) to rebuild the infrastructure of certain cities in the eastern side, especially areas affected by the Derna flood as well as building bridges between Derna, Benghazi, and Ajdabiya, extending highways, as well as building schools, hospitals and residential areas.

The companies include Orascom Construction, Hassan Allam, and Wadi Al-Nil (Hany Dahi). The latest of these deals was signed in January between executive director of the Reconstruction Fund for Derna and Affected Areas Belkasim Khalifa Haftar, son of the General Commander of the Libyan National Army (LNA), and the head of Egyptian company Neom headed by Ibrahim Al-Argani, an Egyptian businessman with close ties to Egypt’s security apparatus.

“Egypt would be wrong to not take a piece of that cake, especially given that Cairo has suffered a lot following Libya’s fallout since 2011,” says Ahmed*, a former Egyptian diplomat who was close to the Libyan file during the fall of Ghadafi.

“It’s a good revenue for the state and for these locally owned companies… which will boost the construction business after it suffered from the pandemic and the impact of the war in Ukraine,” he says. “This will be a good entry point to have more business in Africa, especially countries torn by terrorism and civil war.”

Egyptian companies had already secured contracts in Gaza before the ongoing war, as was the case in post-IS Iraq.

“Our Egyptians brothers will build the infrastructure, but they have a chance to secure at least eight years of business,” Libyan Contractors Union head Abdel Majid Kosher tells The Africa Report. “The companies can initiate partners with Libyan counterparts to secure more contracts as more cities start to be well connected to each other.”

Egyptian workers in Libya

Ending the conflict in Libya through a united front with Turkey means the return of Egyptian workers to Libya. Since the 1970s, thousands of skilled and unskilled Egyptian workers and professionals sought Libya as a destination. Much of the remittances helped stabilise the Egyptian economy for years.

According to Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS), $17.8m was deposited during the fiscal year 2019-2020 from remittances of Egyptians working in Libya, compared to $27.9m the previous year, a decrease of 35.9%.

This mass return was planned in 2021 but was delayed due to elections. Thousands of workers are eager to go

After relations between Egypt and Libya started to improve in 2020-2021, the remittances increased to $31.4m and are expected to continue increasing in the coming years. On top of that, Egypt is looking to tax workers as it plans to regulate and centralise the flow of labour and the deposits they make to their families.

Former head of the Employment Registration Division at the Federation of Chambers of Commerce Hamdi Imam confirms that the return of labour, most of which will be in the field of construction, will be organised and heavily regulated, based on the demand of the Libyan market.

“This mass return was planned in 2021 but was delayed due to elections. Thousands of workers are eager to go, and this will help the economy and benefit the country in many ways to decrease unemployment,” he tells The Africa Report.

Policing Egypt-Libya-EU borders

“Since the start of the migration crisis after what is called the Arab Spring, the EU [European Union] has poured millions into both countries [Egypt and Turkey] to curb the flow of migrants, but Egypt proved more stronger to cutting this flow….and should therefore work for a conflict free Libya, in order to have more ‘police power’ in the area,” says Sammy, who is currently working on the Turkish file.

All three diplomats agree that another economic goal Egypt can score from a stable Libya via its relationship with Turkey is maintaining and getting more funds to curb migration from the EU.

Early this year, the EU vowed to give €7.4bn ($8bn) to Egypt, part of which will be dedicated to limiting the flow of migrants passing from the Western border on to Libya, and then onto Europe via the Mediterranean.

“Egypt now is home to thousands of refugees coming from Sudan, Yemen, Gaza, and the rest of Africa. The EU will invest more money in Egypt to make sure these refugees do not cross to Libya through Egypt,” Sammy says.

While a rapprochement with Turkey has short-term economic benefits, the long-term impact is geopolitical, say the diplomatic sources. “Egypt is feeling left out by some of the Gulf brothers, and Turkey is trying too hard to get the attention of the EU in vain…. That is why Egypt and Turkey should unite to act as strong pressure points, and act as a new alliance to balance the geopolitical equations in the region,” says Ahmed, adding this will also open doors to more reconciliation with Sudan, Greece, and Ethiopia