Egypt has been a shelter from war for many… but at what cost?

The refugee crisis in Africa’s third biggest population is causing both economic and social problems, with rent prices up and job opportunities down. Resentment is growing, as are calls for controls.

AFP

Refugees from Sudan line up to enter Egypt at the Ergin crossing.

Egypt has been a shelter from war for many… but at what cost?

Marcelle Nasr

last update on 21 Jun 2024

The economic and social effects of Egypt hosting hundreds of thousands of refugees fleeing conflict in the Middle East and North Africa are now being felt.

The ‘big sister’ of the Arab world, Egypt already had plenty of problems before Sudan’s civil war helped create a refugee crisis. Its economy is on the ropes and an estimated 300,000 from Sudan in the first three months of fighting has led to tension.

Patience is now running thin, as Egyptians’ capacity to help is reduced, owing in part to the enormous price increases in rental accommodation.

The UN Refugee Agency (UNHCR) says Egypt hosts around 670,000 refugees, the largest number being from Sudan, alongside others from Syria, South Sudan, Eritrea, Ethiopia, Yemen, Somalia, and Iraq. Today, there are around 385,000 Sudanese and 155,000 Syrian refugees in Egypt, making the two biggest groups.

While it was hoped that trouble in Sudan would be short-lived, the conflict still rages more than a year later. Such was the initial inflow that Egypt had to bulk up the border. This slowed the migration from 4,000 refugees per day to 400.

Land of rising rents

Most refugees have settled in the big northern cities like Cairo, Alexandria, and Damietta, where the impact of the influx has been most pronounced, affecting Egyptians’ living conditions, job prospects, and even safety.

Some rents have now increased by up to 600%. On a tour of neighbourhoods in Cairo, Al Majalla saw the effects.

Owners justified the rental increases by citing higher inflation and living costs. Tenants had two choices: pay the much higher rates or vacate.

The 'big sister' of the Arab world, Egypt already had plenty of problems before Sudan's civil war helped create a refugee crisis.

Mona, 55, in the Al-Zeitoun suburb, is currently searching for somewhere to rent. She cannot afford to buy, with prices in her area ranging between EGP2-3mn ($40,000-$60,000). Her landlord increased her rent fourfold from EGP4,500 to EGP18,000.

Awal, 30, who fled to Egypt from Sudan, rents an apartment with her three siblings in the popular Ain Shams suburb, but says the rent doubled from EGP2,500 to EGP5,000 last month.

Refugees face overcrowding, poor services, and a growing hostility, amid the impression that they are prioritised over Egyptians. Many are here fleetingly, before they seek to move on to Europe.

Refugees' social impact

Those fleeing war were initially welcomed as guests, with no resentment. It helped that Syrian arrivals quickly integrated in the labour market and were evenly dispersed around the country, thus avoiding refugee concentrations.

Last year's much more numerous arrivals from Sudan, however, have not dispersed but clustered. In Cairo in particular, the implications on both the rental market and the cost-of-living shudder through the capital. In many ways, Egypt was ill prepared.

Shutterstock — High-rise apartments overlooking the Nile. The cost of renting property in Egypt has rocketed on the back of a huge influx of refugees.

"In recent years, the economic conditions in the country have considerably increased the vulnerability of both refugees and host communities," said the UNHCR in a recent statement.

"With many refugees lacking a stable source of income, coupled with soaring inflation, basic needs are barely covered. Other challenges include limited job opportunities and the language barrier facing non-Arabic-speaking refugees.

"Some also lack access to sustainable formal education that could support their development. In addition, a considerable number of refugees and asylum-seekers rely on humanitarian assistance to meet their basic needs and to receive medical or psychosocial support."

Adding to the problems

Had Egypt's economy been flying along at full throttle, the story may have been different. As it is, the country has needed several very big bailouts in recent months. The economic impact of the war in Gaza has also been seismic.

The Suez Canal is a crucial dollar income stream for Egypt, but attacks on merchant vessels by the Houthis in solidarity with Palestinians since late last year has meant that big shipping operators are taking the much longer route around Africa instead. For Egyptians in need of the canal's transit fees, this has been bad news.

Had Egypt's economy been flying along at full throttle, the story may have been different. As it is, the country has needed several very big bailouts.

The United Nations Development Programme estimates that the cost of the Gaza war on the Egyptian economy, most notably through reduced transit fees and tourism, could be up to $10bn across this fiscal year and next, rising to $13bn if the war intensifies.

In reaction, calls for the Egyptian government to step in and control prices in the rental market have grown, especially in a period of high inflation and a weakening of the currency, the Egyptian pound (EGP). Yet the chances of it doing so are vanishingly slim.

As demand for housing has soared, supply of housing is still constrained. This has led to war profiteering. Some landlords evicted sitting tenants (often Egyptians) and offered their properties to refugees who are able to pay much higher prices. In this way, resentment is building, as Egyptian families get pushed into lower quality housing.

Both the International Monetary Fund (IMF) and the European Bank for Reconstruction and Development have reduced their growth forecasts for Egypt. One factor will be the cost of accommodating refugees, who need not just housing but healthcare, education, and other services.

Seeing a backlash

On Wednesday, Amnesty International published a report alleging that Egyptian security personnel had been forcibly detaining and then returning hundreds of undocumented Sudanese refugees to Sudan.

Some are calling on the government to act, including a full census of migrants, or a tax on residency, as Egyptians start to blame refugees for their economic and social ills.

Ministers now face criticism for not regulating their status or limiting their numbers. Others criticise the international community for not offering financial support to Egypt to help it accommodate so many new arrivals.

Some are calling for a full census of migrants, or a tax on residency, as Egyptians start to blame refugees for their economic and social ills.

In March, the European Union agreed a macro-financial assistance package comprising both short-term and long-term loans, investments, and funding for cooperation in areas like migration to Europe and counterterrorism.

The state is being urged by some to register those arriving claiming asylum, similar to measures that are already in place in other Arab countries. Such a process would record entry dates, duration of stay, and status.

Analysts fear that without better government control, problems could mount. Egypt "has always been a refuge for revolutionaries from around the world, especially Africans," says financial expert Dr Tarek Morsi.

"Despite receiving support from the EU to help with the refugee issue, rents haven't come down, indicating that the problem isn't purely economic but social, one that requires strict laws to regulate the market."

However, he added an important layer of perspective, too. "The economic impact of the wars surrounding Egypt damages the overall economy more than the refugee issue, necessitating greater international support for the Egyptian economy."

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