Tarek Amer’s legacy will be in large part shaped by how his successor handles the challenges he has bequeathed them, including FX policy, whether foreign investors regain their appetite for our debt, and how inflation plays out, among others. This much is clear: however divisive he has been in some quarters, he will be remembered for the gutsy float of the EGP back in 2016 — and transforming decades of lip service about financial inclusion into a sea change in policy that has given birth to a new generation of startup and brick-and-mortar non-bank financial players.

Banking system cleanup: Amer joined the CBE in 2003 as a deputy governor to Farouk El Okdah, following a stint in the private sector. Okdah and Amer presided over a cleanup of the banking system made necessary when the lending bubble of the 1990s collided with the fallout from the November 1997 Luxor massacre, which sent tourism — and the economy — into a nosedive. That cleanup saw the CBE force consolidation, recapitalization, and a world-class regulatory framework (criticized in some quarters as excessively risk-averse) onto the industry. By the time it drew to an end, Egypt had 39 banks, down 17 from the height in 2003.

He was appointed as CBE governor in 2015 after a detour during which he led the National Bank of Egypt from 2008-2013, among other positions at a time when Egypt’s FX market was in disarray. Amer took over the central bank from Hisham Ramez, who held the position for two years from 2013-2015. The country had a shortage of greenbacks and a pegged exchange rate, which gave rise to a very robust parallel market for hard currency.

The OG devaluation: A year into his tenure, Amer made global headlines in November 2016 when the central bank took the bold step of liberalizing the exchange rate and allowing the EGP to devalue, part of a broader raft of economic reforms that revived Egypt’s FX trade and paved the way for us to unlock a USD 12 bn loan from the IMF. The 2016 EGP float and devaluation were “critical steps toward restoring confidence in the economy and eliminating foreign exchange shortages,” the IMF said at the time.

Cue the era of hot money and the emergence of a carry trade darling: During his time as governor, Amer oversaw a monetary tightening cycle that kicked off in 2017 amid soaring inflation. With one of the highest real interest rates among emerging markets, Egypt began attracting USD bns in portfolio investments as we solidified our position as a carry trade darling.

…followed by import restrictions and stemming USD demand: The EGP was coming under pressure earlier this year as commodity prices picked up (among other factors), but was particularly squeezed when Vladimir Putin’s invasion of Ukraine touched off what remains, for Egypt, a perfect economic storm: International investors are pulling back from emerging markets in a risk-off (at the same time as the Fed offers more attractive returns with interest rate hikes), our import bill is skyrocketing (particularly for fuel and food), and Russian and Ukrainian tourists are staying home. Drying up FX liquidity saw Amer impose import restrictions by another name, changing import rules to mandate that importers must get letters of credit, rather than documentary collection. The presidency (not Amer) later announced that production inputs and raw materials would be exempt from the rules; El Sisi also tapped Madbouly to meet regularly with the CBE to make sure that it was doing its best to make FX available to manufacturers. Still, importers of all forms — including folks bringing in manufacturing inputs — say they’re having a very tough time opening LCs.

Amer also guided the central bank as it responded to the outbreak of covid-19, moving swiftly to protect the economy from the effects of covid-19 with a 300 bps preemptive interest rate cut in March 2020, followed by another two unexpected rate cuts of 50 bps apiece in September and November of that year, bringing the grand total for 2020 to 400 bps. The CBE also rolled out debt relief initiatives and debt repayment holidays, alongside a EGP 20 bn stimulus package to directly purchase equities on the EGX. Other measures from the CBE simplified the flow of money, including scrapping fees on all EGP transfers between local banks and withdrawals from out-of-network ATMs — a continuation of his work to push forward the government’s digitization and financial inclusion drives.

On the industry regulation side, Amer was not without controversy. In 2016, he issued a decree imposing nine-year term limits for any Egyptian bank’s managing director — a move that resulted in backlash from the business community. The limits were blocked by the judiciary and were ultimately scrapped from an overhauled Banking and Central Banking Act that passed the House of Representatives in 2020.

AMER’S LASTING CONTRIBUTION- The ongoing financial inclusion drive that has helped turbocharge the growth of both startups (from Kashat to Khazna and beyond) and brick-and-mortar NBFI players. Amer and his team walked the walk on financial inclusion (bringing the unbanked masses into the formal economy) after generations of policymakers paid lip service to the idea. Participants in the formal banking system skyrocketed from somewhere in the low 30% range at the start of Amer’s term to more than 56% at the end of 2021, making talk of investment in businesses built on financial inclusion part of the mainstream.