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The Structure of Military Deals that Disrupted Egyptian Defense Industries

28 Dec 2025
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1 min read

I have been writing for a while and reiterating that the problem of Egyptian defense industries is not the absence of companies or competencies, but rather the lack of political will. Some respond with phrases like, "Haven't you seen the Tornox project? We make advanced weapons but we don't announce them."

Every time I have proven the absurdity of these responses through logic and information, from a technical and economic perspective, because an industry that is said to exist but is secretive, must have a natural impact on reality: on spare parts, on maintenance, on supply chains, on training, on downtime, and on the import bill, as well as on exports. Secrecy may hide a project name or capacity number, but it is impossible to hide the impact of an entire system in a country the size of Egypt.

This time, for the first time, we will discuss this problem from a completely different perspective, which is the nature of the deals that Egypt makes in the field of armament.

To follow the topic from the beginning, let us start from the top; the following statements are known by anyone in a significant position in the Egyptian Ministry of Defense, but no one talks about them, and discussing them is not allowed, plus many of the lower-ranking Egyptian army leadership who attend the higher meetings aren't aware of them.

The transfer of American weapons to Egypt is subject to specific laws and regulations, such as The Arms Export Control Act (AECA), and The Foreign Assistance Act (FAA).

These operations are also regulated by the International Traffic in Arms Regulations (ITAR), which govern the export and transfer of American defense equipment.

Thus, Egypt has only two paths:
Foreign Military Sales (FMS), which is a "government to government" system,
or Direct Commercial Sales (DCS), which is a "company to company" system but under conditions of prior governmental licenses and approvals from the U.S.

Let us assume that the FMS pathway is the harder compared to the DCS pathway, because the former concerns military sales, while the latter concerns commercial sales that are usually documented and reported in corporate records, trade reports, and customs reports.

Therefore, let us focus on the military path, i.e., the FMS path, which has a clear and fixed process:
it starts with a Letter of Request (LOR), then price data, then a Letter of Offer and Acceptance (LOA), followed by request acceptance, then contract signing, and finally case closure.

The FMS system operates simply according to a "total package approach", meaning that you do not just purchase a piece of weaponry, but you get a complete package that includes execution, delivery, services, training, and technical support.
Here, I can briefly tell you: say goodbye to the idea of developing your local industry.

The longest stage is called Execution, and its duration is determined according to the delivery schedule, and once everything is completed, the contract closure stage begins, which takes two years from the date of supply completion or service provision.

Take this important point: FMS deals must be executed without any cost to the U.S. government; there is something called FMS Administrative Surcharge (administrative fees to recover management costs), which means Egypt is obligated to pay the United States any additional fees that the U.S. government incurred on the deal.

So, where is domestic manufacturing in all this?
The platform through which weapons are imported into Egypt is designed primarily to give you operation and sustainability within a foreign supply and decision system, not to provide you with real localization of industry.

To connect the topics together: we are importing weapons from the United States worth about 90 billion dollars to date; this figure is nearly 30 times the official military spending of Egypt; it is a very large figure.
But the armament you receive is for use only, and there is no real opportunity to do what other countries have done in developing the procurements they received, because of the nature of the contract and the form of the laws between you and the United States.

This situation has persisted for more than forty-five full years, without anyone thinking of making a change that would benefit Egypt and its local defense industries.

Okay, let's continue..
The laws state that there is a Tiered Review which includes consultation and review with Senate and House committees prior to the official notification, then the official notification occurs.
The thresholds for this notification are:

  • 14 million dollars: when the deal involves Major Defense Equipment.

  • 50 million dollars: when the deal is military but does not include Major Equipment.

  • 200 million dollars: when the deal involves military construction projects (MILCON).

  • 1 million dollars: when the deal involves small arms via Direct Commercial Sales.

Now you need to focus very carefully with me, as this information is very serious..
This means that the purchases themselves are within a system of oversight and approvals and digital thresholds, and this alone creates long-term political and procedural dependence, which completely prevents any narrative of secrecy forever.
Why?
Because this information states two very important things..
The first thing is that any discussion about a massive secret industry is meaningless, because any arms deal (which includes equipment and components) must pass through the American Senate and House, so good luck with absolute secrecy.. unless you believe that there is a weapon you can manufacture without American components..

The second and more dangerous point.. is the interests and funds that pass with these deals to people inside and outside the country.. who determines this amount? And where does it go? And which body in the state monitors this process and ensures that nothing endangers the national security of the country, or siphons billions into the pockets of certain people?

We are talking about the fact that the shape of the deals themselves creates a structural dependency, not merely the purchase of weapons.. that is, you are not just importing a piece of metal or an electronic system.. but you are importing the operational decision.. and you are importing the right to access maintenance.. and you are importing approval for software updates.. and you are importing legal exceptions.. and all of that is tied to complex political and technical threads outside your country.. this is the legal form itself between you and them..

When a country like Egypt ties its fundamental defense system to a single path that does not include real knowledge transfer contracts.. and does not include clear mandatory offsets that localize technology.. and lacks contractual flexibility that allows you to build upon what you have purchased..
You gradually transform from a user of weapons to a permanent customer within a closed supply chain.. and this means that any attempt to build a national industry will immediately clash with contractual, legal, and political constraints.. not with financing or human skill issues..

Thus, discussing the secrecy of extensive local manufacturing under this system.. and talking even about serious local manufacturing even if it is not secret.. is an illusion and an impossible dream under the current circumstances.. this situation must and should change first and foremost..

The problem is not that Egypt is technically incapable, nor that engineers are few, nor that the state cannot compete,
but rather that the problem simply is that the nature of our relationship with weapons has become based on dependency, rather than independence.
The laws that govern our arms purchases have cemented, over many long years, this form of dependency, and no one talks about this point, nor is it even open to discussion.

The lack of political will to change the nature of the deals, impose real conditions for knowledge transfer, and build a legislative and economic system that protects the national industry, is what has destroyed any chance of building a real defensive base.

Defense industries arise from a conscious sovereign decision that national security cannot be imported, and that sovereignty is a production chain, cumulative knowledge, databases, factories feeding factories, and a national supply network not linked to a gateway of external dependency.

As long as this decision is absent, all the slogans about secrecy will remain just a curtain of smoke that hides behind it one truth: we have chosen a model that guarantees armament, but does not build strength, and puts our national security in the hands of others.


This is an AI-generated English translation. The original text is in العربية

Moamen Ashraf

PhD Researcher in Defense Contracting and Cooperation Policies