Egypt’s tough forex rules thwart Kenyans’ bid to travel, send money back home

A tourist checks in at the Red Sea resort of Sharm el-Sheikh last year. The Arab Spring drove away tourists and foreign investments. PHOTO | AFP 

By GEORGE OMONDI, omondi@ke.nationmedia.com

In Summary

• Country is implementing stiff monetary measures to stem hard currency outflows after the Arab Spring.

Hundreds of Kenyans living in Egypt have started 2017 on a sour note after the shortage of hard currency worsened in the northern African state, thwarting their bid to travel and send money home.

Egypt, which has been integrating its import-dependent economy with Kenya and 17 other countries under the Comesa trading bloc, is currently implementing tough foreign exchange rules to stem dollar outflows after the Arab Spring drove away tourists and foreign investments.

A number of Kenyans interviewed claimed the Fattah el-Sisi regime — which has been in power since June 2014 — has apparently turned measures initially meant to stabilise the Egyptian Pound (EGP) into a blanket crackdown on black foreigners.

“Every employer has been instructed to pay foreign workers in EGPs only,” said Maki Atieno, a Kenyan who claims to have quit her job at one of the Red Sea’s tourist resorts ahead of end-year festivities.

She added: “They have also shut down all the informal currency exchange bureaus and instructed formal ones and banks not to sell dollars to foreigners. These measures intensified after locals piled pressure on government agencies to send away foreigners for taking up their jobs.”

The EGP is a rare currency in the Kenyan economy. A random call to Kenyan banks indicated that they hardly accept them for exchange. That means Kenyans who arrive into the country with money denominated in EGPs face huge exchange losses. International money transfer service providers also never accept remittances denominated in EGPs.

“Initially, they used to allow banks and airport-based exchange bureaus to sell to us the dollars once you showed them a confirmed air ticket indicating you are on your way out. But now it doesn’t matter. You can’t get the dollar as long as you are a foreigner,” said a Kenyan identified as Moni Wanjiku.

“It is hard here. Even the fairly liberal Banque Misr and National Bank no longer give you dollar bills even with a confirmed outbound flight ticket.” Kenya’s Cairo embassy had not responded to our queries by the time of going to press.

The measures, according to sources, appear to have targeted Kenyans and other black foreigners who are either working or doing business despite having travelled to the northern African state on tourist visas.

The Sisi regime is said to have initially toyed with the idea of mass deportation of illegal immigrants as jobless citizens demanded action but later dropped the policy under pressure from the Barack Obama administration.

With Donald Trump set to come to power on January 20, fear is running deep among Kenyans. Mr Trump himself romped to power on the promise of mass deportation of illegal migrants.

“I had to leave after the Sisi regime declared an economic warfare on us,” reminisces Ms Atieno. “You toil all day but your money can only be spent in Egypt. Even the Western Union accepts only dollars (not the EGPs that we earn) for international transfers.”

Egypt’s pyramids and Red Sea beaches have failed to attract hard currency-holding visitors and investors since the 2011 uprising ended Hosni Mubarak’s 30-year rule.

The EGP currently exchanges at around 16 per dollar. Apart from the official crackdown on black market currency exchange bureaus, the Central Bank of Egypt is said to have issued strict rules as to the amount of dollars Egyptian citizens can buy from banks.

“The rules ensure that even if you have a friend, they can’t help you because an individual can only buy up to $400 from banks”, said Ms Wanjiku

Another Kenyan identified only as Buliro told the Business Daily: “They (authorities) first render you desperate then you fall into the hands of a few brave black market currency dealers who offer you ridiculous rates of as low as EGP 46 per dollar.”

She added: “I should be out of this place but will still have to bear it for some months because I haven’t even raised enough to cover money that I spent to obtain travel and immigration documents.”

The dollar shortage challenge however extends to the formal trade network with Kenya. With official foreign reserve levels sagging to cover only to months of imports, traders in the populous nation are said to be struggling to order essential goods.

Data compiled by Kenya’s Cairo embassy shows exports include tea (which accounts for up to 96 per cent) fresh produce, tobacco, textile fibres, long life milk and Soda ash to Egypt.

In Exchange, traders from the north African state ship in rice, sugar, fish, paper, building material, leather products and pharmaceuticals.