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Middle East and North Africa
337
Increase
Table 12 Exchange rate impacts on Iranian defence budget
2022
2021
2018
2019
2020
2023
2016
2017
2,225
3,194
775
722
Defence budget* IRR (trn)
485
640
1,180
695
Iraq*
18.5
28.1
76.1
53.0
17.2
15.4
Iranian Defence Budget, converted to current USD
18.6
16.5
USD10.36bn
using government-set xed exchange rate (bn)
3.3
n/a
7.4
7.4
12.0
5.1
n/a
6.4
Iranian Defence Budget, converted to current USD
using NIMA exchange rate (bn)
8.3
10.4
Iranian Defence Budget in Constant (2015) USD (bn)**
10.2
11.5
15.0
7.7
16.0
17.5
2.64
2.13
1.70
2.02
1.77
3.58
3.83
3.37
Defence budget as percentage of GDP
Algeria
*Defence budgets include Army, MoD, and IRGC budgets. Excludes Law Enforcement Agency (NAJA). **Conversions use NIMA rates used for 2018 onwards.
USD18.31bn
Source: IISS
ȱŬŪŬŭǰȱȱ ȱ ȱ Ȃ defence budget
ȱȱȱȱȱȱŮŰƖȱȱȱ
ȱȱȱ¢ȱ¢ȱȱȱȱ
ȱ¢ȱūǯųūƖȱȱȱȱȱŬŪŬŬȱǯȱ
ȱ Ȭȱ ȱ ǯȱ ȱ ȱ
ȱ ȱ ȱ ȱ Ȃȱ Ȭȱ
Qatar
ǰȱ ȱ ¡¢ȱ ūūǯŭƖȱ ȱ ȱ
ȱȱȮȱ ȱȱ Rafaleȱȱ ȱ
εUSD9.02bn
ȬūűȱThunderȱ¢ȱȱȱȱȮȱȱ ȱȱ
Ȃȱȱǰȱ ¢ȱȱȱ ȱ
ǻūŪǯŮƖǼȱȱ ȱǻūŪǯŪƖǼǯȱ ȱǰȱȱ
Ȭȱ¢ȱȱǯȱ ȱȱȱȱ
Mauritania
USD69.07bn
ȱȱȱȱȱ¢ȱȱ
ȱȱ ȱŬŪŬūȱȱȱŲŪȱ ȱRafale
USD0.24bn
ęǰȱȱȱȱȱȱǰȱȱ
ȱ ȱ ¢ȱ ǰȱ ȱ ȱ ŬŪŬŭȮŬŮȱ
ȱȱȱȱȱȱȱ ǰȱ
ȱ ¢ȱ ęȱ ȱ ȱ ȱ ȱ
ȱ ȱȱȱȱȱȱ
ȱ ¢ȱ ȱ ¢ȱ ȱ ȱ
Israel
ȱ ȱ ȱ Ȭȱ Ěȱ ȱ ȱ
ȱǯ
Morocco
UAE
USD22.48bn
ȱ ȱ Ȃȱ ȱ ȱ ȱ ȱ
Israelȱȱȱȱȱȱ
ǻ Ǽȱ¢ǯȱ ȱ¢ȱȱȱ ŲŪŪȱ
ȱȱȱ¢ǰȱ ȱȱȱȱ
Oman Saudi Arabia* εUSD20.74bn USD6.49bn ȱ ȱ ȱ űŰǯŬȱ ǻ ŬŪǯűŮǼǰȱ ūŭǯůȱ ǻ ūŪǯŭǼǰȱ ȱ ȱ ȱ
USD6.51bn Iran* ȱ ǻ ŲűŪǼȱ ȱ ȱ ȱ ȱ Ȭ ȱ ȱ ¢ȱ ųǯŰůƖȱ ȱ ȱ Ȭ
εUSD7.41bn 32 Tunisia D EF EN S EH ER E E G Y P T A I R S H O W 2 0 2 4 E D I T I ¢ȱ ȱ ȱ ȱ ȱ Ĵȱ ¢ȱ
ȱȱȱȱȱȱȱǰȱ O N
USD1.25bn
¢ȱȱȱȱȱȱȱ ǯȱ ȱ ȱ ȱ ǰȱ ȱ ȱ ȱ Middle East and North Africa
Kuwait Jordan ȱǯȱ ȱ ȱ ȱ ŭǯűŭƖǰȱ ȱ Ěȱ ȱ
Bahrain USD2.25bn ȱ ŮƖȱ ȱ ȱ ȱ ¢ȱ ǯȱ ȱ
During the Sudan conflict in April 2023, Egypt played a
Egypt
USD1.41bn USD7.77bn USD4.88bn
significant role by providing military aid to the Sudanese ȱ ȱ Ĵǰȱ ȱ ȱ ȱ
Egypt, 2.6% Other North Africa, 0.8% ȱ ¢ȱ ȱ ȱ ę¢ǰȱ ȱ ȱ
government. The country also engaged in negotiations
Decrease Lebanon Libya Palestinian Authority Syria Yemen * Security expenditure removed from defence budget gure. Iran conversion using Algeria, 9.7% ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ
Morocco, 3.4%
mediated by the United Arab Emirates to recover captured
n.k
n.k
n.k
n.k
n.k
NIMA exchange rate.
Egyptian personnel and equipment. These actions reflect Ĵȱ ȱ ¡ȱ ¢ȱ ȱ ȱ
[1] Map illustrating 2023 planned defence-spending levels (in USDbn at market ȱȱȱ¢ȱǯȱ ȱȱǰȱ
Egypt’s proactive stance in regional conflicts and its efforts
Real % Change (2022–23) exchange rates), as well as the annual real percentage change in planned defence Jordan, 1.2% Saudi Arabia, ȱȱȱȱ¢ȱȱȱȱȱ
More than 20% increase Between 0% and 3% decrease spending between 2022 and 2023 (at constant 2015 prices and exchange rates). 36.7% ȱ ȱ ȱ ȱ ȱ ȱ ȱ
to protect its interests and allies.
Between 10% and 20% increase Between 3% and 10% decrease Percentage changes in defence spending can vary considerably from year to year, Israel,
as states revise the level of funding allocated to defence. Changes indicated here
The acquisition of two Mistral-class amphibious assault
Between 3% and 10% increase Between 10% and 20% decrease highlight the short-term trend in planned defence spending between 2022 and 11.9% Ȃȱ ¢ȱ ǯȱ ȱ ȱ ¢ǰȱ
ships has further enhanced Egypt’s regional deployment
Between 0% and 3% increase More than 20% decrease 2023. Actual spending changes prior to 2022, and projected spending levels defence spending has been supported by the
post-2023, are not re ected.
ε Estimate Spending 2% of GDP or above Insuf cient data capabilities. These vessels enable Egypt to project pow- Bahrain, ȱ ȱ ȱ ȱ ȱ ȱ ȱ ǰȱ
©IISS
er more effectively and provide humanitarian assistance 0.7% ȱ ȱ ȱ ǰȱ ȱ
Qatar, 4.8% ȱ ǰȱ ȱ ȱ ǯȱ
across the region. The Mistral-class ships represent a sig- ȱȱ¢ȱȱǰȱ ȱȱȱ
nificant upgrade in Egypt’s naval capabilities, allowing for Oman, 3.5% ȱ ȱ ȱ ȱ ¢ǯȱ ȱ
greater operational flexibility and a stronger presence in Kuwait, 4.1% United Arab
Iraq, 5.5% Emirates, 11.0% ȱ ¢ȱ ȱ ȱ ȱ ȱ ȱ
regional maritime affairs. Iran, 3.9% ¢ȱ ęȱ ǻ Ǽȱ ȱ ȱ ȱ ȱ
Despite these advancements, Egypt faces significant chal- Note: Iran conversion using NIMA exchange rate. Analysis excludes ȱ ęȱ ȱ ȱ ȱ ǰȱ
Lebanon, Libya, Palestinian Authority, Syrian Arab Republic and Yemen. ©IISS
lenges related to its defense expenditure. Inflation has se- ȱȱȱȱȱȱȱȱ
verely impacted defense spending, leading to a real-term ɺ Figure 17 Middle East and North Africa: defence ȱ ȱ Ȭŭů ȱAdirȱęǰȱȱȱ
decline of over 30% due to soaring inflation rates. For the spending by country and sub-region, 2023 ȱȱȱ¢Ȭ ȱǯȱ
first time, national defense spending has fallen below 1%
of GDP, reflecting a longer-term trend of modest outlays
that constrain procurement activities and affect the overall ability to sustain and modernize military forces.
Domestic Defense Industry and Future Prospects
Egypt’s domestic defense industry, while established, remains heavily dependent on licensed production and co-pro-
duction agreements with foreign companies. For instance, the South Korean K9 Thunder self-propelled artillery ex-
emplifies Egypt’s collaboration with international defense manufacturers. This reliance on foreign technology and
partnerships highlights the challenges Egypt faces in developing a fully self-sufficient defense industry.
Looking ahead, Egypt’s defense industry must
336 THE MILITARY BALANCE 2024
navigate a complex landscape of geopolitical
Increase dynamics and economic constraints. The coun-
Iraq*
USD10.36bn try’s strategic position and military capabilities
make it a key player in regional security, but
balancing modernization with financial limita-
Algeria
USD18.31bn
tions presents a critical challenge. Egypt’s abili-
ty to adapt to these challenges will significant-
ly influence its future role and effectiveness in
Qatar
εUSD9.02bn
regional and international military affairs.
Saudi Arabia*
Mauritania USD69.07bn
USD0.24bn In summary, Egypt’s military power and de-
fense industry reflect a blend of historical
Israel
USD22.48bn UAE Morocco
εUSD20.74bn USD6.49bn influences and contemporary strategies. Its
Oman
USD6.51bn Iran* strategic partnerships, ongoing modernization
εUSD7.41bn Tunisia
USD1.25bn
efforts, and active regional engagements un-
Jordan
Kuwait
Bahrain USD7.77bn USD2.25bn
USD1.41bn Egypt derscore its role as a major player in Middle
USD4.88bn
Decrease Lebanon Libya Palestinian Authority Syria Yemen * Security expenditure removed from defence budget gure. Iran conversion using Eastern geopolitics. However, ongoing eco-
n.k
n.k
n.k
n.k
n.k
NIMA exchange rate.
[1] Map illustrating 2023 planned defence-spending levels (in USDbn at market nomic and geopolitical challenges will shape
Real % Change (2022–23) exchange rates), as well as the annual real percentage change in planned defence
More than 20% increase Between 0% and 3% decrease spending between 2022 and 2023 (at constant 2015 prices and exchange rates). Egypt’s future trajectory, requiring careful
Between 10% and 20% increase Between 3% and 10% decrease Percentage changes in defence spending can vary considerably from year to year,
Between 3% and 10% increase Between 10% and 20% decrease as states revise the level of funding allocated to defence. Changes indicated here
highlight the short-term trend in planned defence spending between 2022 and
Between 0% and 3% increase More than 20% decrease 2023. Actual spending changes prior to 2022, and projected spending levels management of resources and strategic alli-
post-2023, are not re ected.
ε Estimate Spending 2% of GDP or above Insuf cient data
©IISS
ances to maintain its position and effective-
ɺ Map 7 Middle East and North Africa: regional defence spending (USDbn, %ch yoy) 1
ness in the evolving security environment.
ǰȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ǰȱ ǰȱ ȱ ȱ ŬŪŬŭǰȱ
ȱŬƖȱȱ ǯȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ȱ ęȱ
ȱ ŬŪŬŭǰȱ ȱ ȱ ȱ ȱ ȱ ȬūŭŪȱ Ĵȱȱȱǰȱ ȱȱ
ȱ ȱ ¢ǰȱ ȱ ȱ ȱ ȱ ¢ȱȱȱȱȱȱȱȱȱȱ
ȱ ȱ ȱ ȱ ȱ ȱ ȱȱ ȱ Ȭŭů ȱFlanker ȱȬȱ
ǻ Ǽȱ ǯȱ ȱ ȱ ȱ ȱ ȱǯ
