The US provides Egypt with $1.3bn of military assistance annually to facilitate the transition from the outdated Soviet era equipment to advanced equipment made in the US and other western nations. Against this backdrop, Egypt’s defence expenditure spending, inclusive of the US military funding, is forecast to register a compound annual growth rate of 3.9% from $9.4bn in 2024 to $11bn in 2028.

According to GlobalData’s “Egypt Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2023-28” report, the country’s increasing military expenditure is driven by the ongoing modernisation efforts to procure fixed-wing and land vehicles to counter terrorism in the Sinai Peninsula, instability in Libya, and maritime security concerns over the Suez Canal.

Egypt has allocated 52.8% of its total budget on acquisition budget throughout the period 2019-23. Amidst the ongoing instability in Libya and terrorism in the Sinai Peninsula, the country has signed several defence deals to maintain its military superiority in the region and constantly focuses on strengthening its indigenous defence industry.

Akash Pratim Debbarma, aerospace and defence analyst at GlobalData, commented: “Egypt continues to modernise its aircraft inventory to create a credible deterrence in the region and demonstrate its commitment to secure its national interests. The country’s biggest acquisition programme to purchase 30 units of Rafale-DM/EM combat aircraft and 12 units of CH-47F Chinooks is expected to boost its air force capabilities.”

Egypt is also focusing on upgrading its land warfare capabilities. Major ongoing procurements of 500 units of Russian T-90MS main battle tanks and 2,000 units of Panthera T6 shows the country’s desire to fortify its armed forces and satisfy the nation’s security needs.

Debbarma concluded: “The US foreign military aid plays a vital role in the modernisation of Egypt’s defence forces. Over the year, the US has been instrumental in helping Egypt to procure arms and equipment from the US and other western countries.

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By GlobalData

“However, with Egypt’s procurement from Russia, a growing relationship between the two countries will continue to strain Egypt-US relations resulting in a continued decrease in the military funding provided by the US and decelerated growth rate of the Egyptian defence budget.”