By: Sahar Al-Zarqawi
Al-Hag Abdel Samea, one of the most famous black market currency vendors operating in Attaba, said black market vendors are the “biggest benefactors of Egypt’s foreign currency crisis”.
“We pay money to police officers to make sure that we don’t encounter any problems and don’t get arrested,” Samea said regarding how such illegal business survive in Egypt.
The black market currency vendor works in Attaba next to a store that sells shoes, bags and other clothing accessories. He said he traveled to Saudi Arabia in the early part of his life, cultivating relationships with businessmen before later returning to Egypt to set up shop as an importer, bringing products from the kingdom and other Arab countries. However, throughout his career Samea was always faced with the same problem: a lack of available foreign currency.
Samea saw the problems he faced regarding the scarcity of foreign currency as being linked to the actions of exchange companies, who he says would artificially raise the price of US dollars and Saudi riyals, exploiting the predicament of Samea and thousands of others like him.
Samea quickly got the idea to buy foreign currency, US dollars in particular, direct from Arab and foreign sellers at prices higher than that of exchange companies. This would provide sellers with an incentive to flock to Samea and provide him with large reserves of foreign currency, which he would then sell back to buyers at prices higher than that of exchange companies.
Despite early successes, Samea failed to reap large scale benefits from these practices until 2003, when the government adopted its floating currency exchange rate policy. After this he made massive profits in just several months.
He added that Egypt’s currency exchange market remained relatively lucrative until 2010, when market prices began once again to be set by the country’s central bank, forcing vendors to have to rely increasingly on currency exchange companies. However with the outbreak of Egypt’s 25 January Revolution, he said, life was breathed back into the market, which became profitable once more.
He reiterated that Egypt’s current dollar shortage crisis was fabricated and not a true representation of the state of the country’s current economy, labeling it a façade largely manufactured at the hands of exchange companies, who use rumours of foreign currency shortages as a pretext to increase their sale of dollars onto the black market at inflated prices. He did point out, however, that the country’s political division was real and did have a negative effect on Egypt’s economy, particularly with regards to the country’s foreign currency reserves and the rapid decrease seen in tourism and investment.
Samea went on to say that even within the first three months of 2013, the rate of demand seen for dollars from import companies and businessmen has increased exponentially.
He accused exchange companies of exploiting the demands of importers and increasing the price of dollar sales, while simultaneously raising the purchasing price of currency in order to attract additional clients and increase tenders.
He said that a majority of his clients were importers and businessmen, in addition to a number of small and large private companies and individuals in need of foreign currency, for the purpose of traveling or for other reasons.
He went on to say that his primary source of dollars came from foreigners and Arabs from Sudan, Syria and Saudi Arabia, who convert currency for a 10% commission fee, saying however that at other times he negotiates with bank branch managers who also supply him foreign currency. He said that he works with a network of 20 other individuals who help him to gather clients, primarily in the form of travel agencies and tourist companies, and recruit at least one employee in each of the neighborhood’s bank branches to serve as currency suppliers.
Regarding exchange companies, Samea said that he has only sold them dollars, usually at a price 15 piasters higher than that of the black market, never himself purchasing from them any foreign currency.
He went on to say that black market prices for currency are determined by an individual trader located on Adly Street, who every day informs dealers of price changes in currency based on the market’s supply and demand.
Samea was surprised when we asked him about the possibility of prosecutors or police detectives seeking to trace the flow of public money, saying that campaigns have been launched against him, none of which have so far turned up any supply of dollars. He says this is a result of bribes he has paid to police officers to ensure that he does not encounter any problems in the pursuance of his illicit activities, and that he has been brought to the city’s police station only once throughout his career as a result of his dealings.
He said that he has interests in various provinces located throughout Egypt, operating through representatives who take a 10% commission, saying however that the centre of his work was in Downtown Cairo.
Samea acknowledged that at times he has been subjected to theft and fraud, recalling one instance in particular which occurred when one of his associates was in the process of selling $20,000 to a buyer in Downtown Cairo, when a woman walking down the street began accusing him of sexually harassing her. A mob quickly gathered and began to beat Samea’s associate, who dropped his briefcase containing the money, which the woman then picked up and ran off with. Since then he said, he has employed two guards to follow and watch each one of his colleagues and associates as they make transactions.