The Egyptian Army in 2025: The Problem of Spending and Egypt’s Deterrence Strategy

This is the first article in a series of articles excerpted from the Military Balance 2025 report. I analyze everything in the report and compile the information together in order to arrive at a useful picture for understanding the reality and the existing problems of different militaries. Starting today with Egypt.

All the information in this article, and in the articles that will follow, comes from reliable sources with my analyses that may be right or wrong. I am not writing an analysis to criticize Egypt or the Egyptian army. In the analysis, you will find positive points, negative points, and existing problems. I strive to be as objective as possible.

A quick read of the report on Egypt reveals that Egypt’s problem is one of classic strategic divergence. The state acts as a provider of regional security to the outside world, while its ability to finance its army is dissipating. If we look at the real value of the defense budget, we find that it fell by 13.9% in 2023, and then fell again by 17% in 2024.

This means that Egypt spent $5.4 billion on defense in 2022, and spent almost half that amount, $2.79 billion, in 2024.

What does this mean?

Either Egypt is hiding a larger portion of the budget each year — which is most likely a false conclusion, and I will explain why in a moment — or Egypt is actually spending less on defense, which is the more likely conclusion based on the available information.

There are two main reasons for the decline in defense spending in Egypt: the loss of Suez Canal revenues during the period in question and the decline in tourism revenues. These are the two main official sources we rely on to finance defense spending.

As for the army’s civilian projects, where do their revenues go? They go into the 50% of the state budget that the former finance minister said he knew nothing about, and no one knows anything about.

This means, according to the report, that Egypt is at the lowest level of financial readiness to wage war, and that any sudden war would be costly for Egypt and would be an unequal war from the outset.

The report says that instead of focusing on its financial defense problem, Egypt is sending deterrent signals in Libya, Sudan, and the Horn of Africa, and before that in Yemen. The report then explains that this is not a contradiction, but rather a choice made by Cairo itself, as it uses military activity as a means of geopolitical pressure to prevent the marginalization of its strategic role, even at a time when the state’s resources and defense spending are in a state of suffocation.

The gap between financial pressure and military movements poses a great danger to a country the size of Egypt, because Egypt maintains almost full mobilization with a budget of about $25 per capita per year, down from $48 per capita in 2022.

This point needs some clarification.

In Egypt, there are 438,000 soldiers in the armed forces, 479,000 soldiers in the reserve forces, and 397,000 in the Ministry of Interior, of whom 325,000 are in the Central Security Forces. This is a model that relies on manpower, not high-value technology. In other words, this huge number represents a cost that consumes the state’s ability to spend on defense in the areas of procurement or defense technology development.

Egypt relies on two main elements of financing:

The first element is external liquidity, which is limited and unsustainable, and includes funds from the UAE, the International Monetary Fund, the World Bank, and the European Union.

The second element is US aid, which amounts to $1.3 billion. This was subsequently reduced, but we are talking here about the period referred to in the report, as this was the approved figure.

This means that about 32% of Egypt’s total purchasing power comes from aid. In other words, the level of military readiness, the pace of modernization, and military movements are not linked to pure Egyptian sovereignty (the report itself explicitly refers to this).

This financial pressure creates operational risks that affect Egyptian military equipment.

Egypt currently has about 2,430 main battle tanks, including:

• 1,130 M1A1 Abrams
• 850 M60A3
• 300 M60A1
• 150 T-62 tanks

It also has more than 4,200 armored personnel carriers and about 1,000 armored patrol vehicles.

The navy has been upgraded with eight submarines, 16 frigates, and two Mistral aircraft carriers.

The air force has 340 combat aircraft supported by heavy transport aircraft (21 C-130H and 21 C295M) in addition to approximately 174 training aircraft.

All of this creates what is known as quantitative or volumetric deterrence. However, the problem with this type of deterrence lies in sustainability, as Egypt’s armament system is a mixture of old Russian and modern European weapons, which doubles the effort required to secure spare parts chains and increases problems with ammunition compatibility and training requirements.

With reduced defense spending, the main platforms do not collapse, but equipment and maintenance at the warehouse level are affected, and more importantly, the support equipment that makes advanced systems work efficiently. This is precisely what the Egyptian Armed Forces rely on to a large extent.

The Egyptian army has eight E-2C Hawkeye units and four RE-3A SIGINT units, in addition to Beech 1900 ISR/ELINT aircraft and their variants, and other aircraft equipped with ELINT technology. This is what the report refers to when it says that “Egypt may appear strong in terms of inventory, while at the same time suffering from increasing hollow power dynamics in the background.”

Egypt enjoys great diversity in its armament system, and this diversification continues. I have previously written an article on this subject in which we discussed the advantages of this diversification, but there is a serious downside that requires complex management, known in defense literature as supplier veto.

The story of the K9 Thunder illustrates the seriousness of this point. Egypt’s artillery modernization program was halted for two full years due to a ban on German diesel engines, and was only resumed in mid-2024 when Egypt switched to using South Korean STX engines. This was not a one-time purchase, but an ongoing procurement process, meaning that any multi-supplier defense system is highly sensitive to any political or regulatory decision in a single country within the supply chain. Therefore, diversification is not always a guarantee of independence, but may increase fragility if there is no professional management of supply chains and gradual localization of key parts of defense systems.

If we look at the Egyptian Navy, we find that it possesses missiles and subsystems sourced from the United States (Harpoon, SM-1, RAM), France and Italy (Exocet, Aster 15, VL MICA), Russia (Moskit), Germany (MEKO/Type-209 systems), and others. This means that any diplomatic restrictions or shifts could disrupt the capabilities of the Egyptian navy even in times of peace.

Egypt has pursued a policy that has evolved in response to this problem, which is licensed production wherever possible. We can see this clearly in the launch of the Alexandria shipyard for locally manufactured MEKO A200 hulls in December 2023, the replacement of components to circumvent the embargo, as in the case of the alternative solution for the K9 engine, and the addition of new suppliers such as Turkish drones and Turkish fast boats for intercepting targets.

But these solutions come at a heavy cost, as each one increases the problem of heterogeneity in Egyptian equipment and weapon systems. Each new supplier represents a new burden on the entire system — a financial, operational, and administrative burden. Thus, Egypt finds itself between two interrelated problems: flexibility in the face of complexity and long-term sustainability.

The thread that ties this picture together is that Egypt is attempting to compensate for weak defense funding and spending by engineering the military system itself. In other words, rather than increasing the number of weapons, it is attempting to increase deterrence and autonomy for every dollar that comes out of the budget.

This is clearly evident in the model of the Air Defense Forces as a branch completely independent from the Air Force, with a huge number of personnel amounting to about 80,000 active duty personnel and 70,000 in the reserves, distributed across five air defense zones covering all parts of the republic.

This system creates a dense network of low-altitude air defense, comprising more than 136 point defense systems, along with 910 anti-aircraft guns, including about 600 S-60 guns. This is in addition to long-range systems such as the S-300V4, which are used to protect vital sites.

The idea here is that even if air force sorties are reduced for any reason — whether due to funding, maintenance, or operational pressure — there will still be a defensive cover capable of monitoring, observing, and imposing deterrence.

The same logic applies to the expansion of space capabilities. Egypt now has five satellites, including the TIBA-1 communications satellite, as well as satellites dedicated to surveillance and reconnaissance, such as EgyptSat-A, Mirsat-2, and two Horus-class satellites. Egypt thus has an integrated national information loop extending from sensor to actuator — i.e., surveillance, analysis, command, and control — without relying entirely on external intelligence sources. This complements the electronic warfare and aerial reconnaissance capabilities discussed in the report.

Hence, we understand that when Egypt’s defense spending is around 0.73% of GDP, and Egypt accounts for only 1.3% of total military spending in the Middle East and North Africa, at a time when per capita defense spending has fallen to $25 per year from $48 in 2022, the rational decision is not to buy more weapons, but to ensure that existing systems operate at maximum efficiency and are capable of monitoring, coordinating, and imposing a real deterrence cost.

Despite the importance of this strategy, it is not a permanent substitute for direct defense funding and spending. Infrastructure needs constant maintenance and development. If the financial shocks associated with military spending continue, while Egypt takes on regional roles in Libya, Sudan, and the Horn of Africa, this system will continue to function, but it will become more fragile over time.

Any new shock to revenues or supply chains could seriously upset this balance, because what is ultimately being built is an architecturally smart deterrent, but one based on a weak financial foundation.