Changes to U.S. Military Aid to Egypt Raise Questions

Middle East and North Africa

The Obama Administration’s recent announcement to resume more than a billion dollars in U.S. military aid and certain weapons deliveries to Egypt has evoked a variety of responses in the United States. Some policymakers in Congress and security policy analysts in Washington have welcomed the decision. Others have pointed out potential serious problems with the decision. While this is an important issue to debate, there has been relatively little discussion about the administration’s related decisions to end Egypt’s “cash-flow financing” privilege and limit the purposes for which Egypt can receive military aid to four categories.

A privilege previously granted only to Egypt and Israel, the loss of cash-flow financing – which essentially allows U.S. military equipment to be purchased on credit or on the promise of future aid – will have immediate ramifications. In the past, cash flow financing locked the United States into future arms deals with Egypt, limiting the flexibility of the United State to alter the types of U.S.-supplied military equipment from year to year. Although the privilege will not officially be revoked until 2018, Egypt’s line of credit until then is already maxed out on large-scale weapons sales. This means Egypt cannot sign any expensive, multi-year arms purchases in the near future.

As military expert Robert Springborg told an Egyptian media outlet, the end of cash-flow financing means, “There are no more big ticket items that we’re talking about here. This is a force that needs lighter equipment, more mobile equipment, and more diverse equipment. It needs more training. It needs reconfiguration. It doesn’t need big ticket items that are designed for fighting land battles of a World War II type.” Thus, Egypt’s proclivity toward purchasing the “big ticket” items it traditionally favors, like the F-16 aircraft and new tanks, will be forced to change.

Beginning in 2018, Egypt may also only use U.S. military aid funds, which are mostly provided through Foreign Military Financing (FMF), to purchase new equipment that fits into four categories: “counterterrorism, border security, maritime security, and Sinai security.” The National Security Council stated that the new aid categories will help “create a U.S.-Egyptian military assistance relationship that is better positioned to address the security challenges of the 21st century.” The four categories may also make it easier for the United States to discuss Egypt’s military needs annually to obtain a clearer picture of their national security strategy and priorities.

However, the new categories raise additional questions:

  • Since these four categories are relatively broad, will there be me a noticeable difference in the types of U.S. arms and training the United States provides to Egypt in the future based on these categories outside of big ticket items? Is there any existing U.S. military assistance currently provided to Egypt that would fall outside of these categories?
  • How will Egyptian and American security officials discern which types of military equipment and training falls into which category? Will differing security priorities and definitions of terrorism affect the ability to classify the training or equipment?


The administration will also continue to fund the maintenance of previously U.S.-supplied military equipment, which has consumed a significant portion of previous U.S. military aid packages to Egypt. A 2006 Government Accountability Office (GAO) report estimated that “approximately one-third of [Egypt’s] FMF funds are dedicated to follow-on support; one-third to upgrade U.S.-supplied equipment; and nearly one-third to new procurements.”

Ultimately, the new U.S. categorization of military aid and the end of cash-flow financing, as one analyst put it, are intended to illustrate that, “Washington’s military aid to Cairo will be structured as something of intrinsic value in advancing specific shared security interests, rather than as an expensive-but-vague symbol of a committed partnership.” These changes are undoubtedly significant to the security relationship. Outside of limiting the purchase of big ticket items and providing the administration with the more flexibility, however, it remains unclear how much these changes will alter the make-up of U.S. military aid to Egypt in the future.