The World Bank forecasts Egypt’s real GDP for FY 2022/2023 to grow at 4.8%

Newsletter

10 Oct 2022

The World Bank forecasts Egypt’s real gross domestic product (GDP) for fiscal year (FY) 2022/2023 to grow at 4.8%, according to the international financial institution’s MENA Economic Update Egypt reported a 6.6% GDP growth for the fiscal year (FY) that ended on June 30th 2022, which was driven by gas exports, along with the sectors of telecommunications and tourism, however, growth for FY 2022/2023 will fall sharply, the report showed.The report referred to the role of the Egyptian government in handling the global economic crisis, noting that the annual inflation rate for the March-June period of 2022 hit 14.3% and it could have reached 18.4% if the government had not intervened. On October 4th, the S&P Global Egypt PMI™ report showed that the Egyptian private sector suffered considerable shrinkage in activity owing to contracted demand and inflated prices. (Arab Finance)

The National Bank of Egypt (NBE) announced changes to interest rates for New Golden and Ahl Masr USD certificates with maturities of three, five, and seven years as of October 9th,
The new interest rates for the three-year New Golden certificates were set at 5.3% annually, 5.25% biannually, 5.2% quarterly, and 5.15% monthly at a minimum amount for purchase of $500 or its multiplies. The new rates for the five-year Ahl Masr USD certificates were set at 5.15% annually, 5.1% biannually, 5.05% quarterly, and 5% monthly for a minimum amount of $500 or its multiplies. The new yields for the seven-year Ahl Masr USD certificates were set at 5.05% annually, 5% biannually, 4.95%, quarterly, and 4.9% monthly for minimum amounts starting from $1,000 or it multiplies. (Mubasher)
Egypt’s current account deficit declined by 10.2% year-on-year (YoY) to $16.6 billion during fiscal year (FY) 2021/2022, according to a press release by the Central Bank of Egypt (CBE).
The improvement in the current deficit is attributed to a 53.1% YoY increase in oil and non-oil exports and the recovery in tourism revenues, the CBE said. However, the decline in the current deficit was limited by the drop in net inflows of the capital and financial account, which tumbled to $11.8 billion in FY 2021/2022 from $23.4 billion a FY earlier.The non-oil trade deficit increased by 13.7% YoY to $47.8 billion in FY 2021/2022. Moreover, the CBE’s data showed a 71.4% surge in foreign direct investment (FDI) in FY 2021/2022, which reached $8.9 billion. (Arab Finance)
The Egyptian Finance ministry supports the private sector through a group of incentives including allocating EGP 6 billion to subsidize electricity for the industrial sector.
It is worth noting that the Egyptian government seeks to increase the participation of the private sector in total investments in the country to 65% by the fiscal year (FY) 2024/2025. It also includes offering $40 billion worth of state-owned assets to the private sector by the FY 2025/2026. The plan to empower the private sector includes drafting the State Property Document (SPD), launching an annual program for liquidation of assets, promoting competitive neutrality, and creating a supportive climate for more participation from the private sector. The SPD was drafted by June 2022 and a group of discussions was conducted with representatives of the private sector and experts. (Mubasher)
The Egyptian government is considering new incentives for industries relying heavily on technological components
In a few weeks, the first group of IPOs will be finalized with a value of $3 billion, El-Saeed said, adding that the second group will value $3 billion and will be launched next year. El-Saeed added that the government is seeking to bring the ratio of green investments to total investments to 40% in 2022 and 50% by 2025. She revealed that a committee was formed between the finance and planning ministries to accelerate the participation of the private sector through the activation of some incentives subject to the Investment Law, including granting golden licenses within 20 business days to localize technology industries and exports. (Enterprise)
COP27 host Egypt to expand initiative of replacing old vehicles with others running on natural gas
This will take place by engaging new cities and governorates to the initiative, Maait explained, noting that citizens of Upper Egypt’s Luxor and Aswan have been allowed to join the initiative. This will contribute to increasing the number of beneficiaries from the initiative in a way that maximizes the efforts of green transformation and enables citizens to own new cars instead of vehicles that are more than 20 years old, Maait said. (Al Ahram).
El-Sisi approves KWD 750K grant to study feasibility of establishing railway linking Egypt and Sudan.
The KWD 750,000 grant will be used in conducting the technical, economic, and environmental feasibility study for the railway system project linking Egypt and Sudan. The feasibility study was inked in Jeddah on 7 April 2022, Akhbar El-Yom reported on Sunday. The KFAED is a Kuwaiti public institution that extends loans on a concessionary term to finance development projects in developing countries. Moreover, it provides technical assistance to finance the costs of the feasibility studies of projects and train nationals of borrowing countries. Additionally, it subscribes to the capital of international and regional development institutions, according to the fund's website. (Mubasher).
The Central Bank of Egypt (CBE) announced that it drafted its financial inclusion strategy (2022-2025) to support financial inclusion in the Egyptian community and boost economic growth, the Middle East News Agency (MENA).
The strategy was designed with a scientific approach based on a field survey of financial services conducted on a sample of individuals and small- and medium-sized enterprises (SMEs). The financial inclusion strategy is based on four pillars; financial literacy, protection of customers’ rights, diversity of banking and non-banking financial products, and the establishment of a work environment for SMEs, entrepreneurs, and digital financial services. (MENA, Arab Finance)
Egypt and Bulgaria agreed to sign a memorandum of understanding (MoU) for technical, scientific, technological, and trade cooperation in the field of oil and gas.
Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla stated that there is an opportunity for Egypt’s gas supplies to reach East Europe through Bulgaria. El-Molla discussed cooperation in the fields of gas an energy between Egypt and Bulgaria with the Bulgarian Minister of Energy Rossen Hristov. (Arab Finance)
Egypt's food industry exports to Saudi Arabia surged by 24% year-on-year (YoY) to $260 million during the first eight months (8M) of 2022, the Food Export Council (FEC) reported.
The Kingdom topped countries importing food supplies from the Arab Republic in 2021 with a value of $305 million, which accounted for 7.50% of the $4.10 billion total value of Egyptian food exports. The Central Agency for Public Mobilization and Statistics (CAPMAS) recently showed that the bilateral trade value between Egypt and Saudi Arabia reached $9.10 billion in 2021, an annual hike of 62.10% from $5.60 billion. Egypt generated nearly $2 billion in merchandise exports to Saudi Arabia last year, which made the Kingdom the second largest market importing Egyptian goods in 2021. The FEC noted that a promotional delegation is scheduled to head to Saudi Arabia during 18-24 December 2022, where about 50 Egyptian companies will participate in bilateral meetings in the cities of Riyadh, Jeddah, and Mecca. (Mubasher)
Misr Italia Properties signed a memorandum of understanding (MoU) with RiseUp to set up the first Innovation and Entrepreneurship Hub in East Cairo
The hub will span an area of 2,500 square meters (sqm) in Cairo Business Park. The MoU comes in line with the company’s vision in positioning its flagship administrative project of Cairo Business Park as the center of creativity, innovation, and entrepreneurship in East Cairo. The new hub will enable entrepreneurs, innovators, and small businesses to connect by offering them co-working spaces, small offices, and meeting facilities. Moreover, the hub will host workshops and capacity-building sessions, as well as provide mentorship to empower businesses. Being built on an area of 78,000 sqm with EGP 6 billion in investments, Cairo Business Park is Misr Italia’s main administrative project, featuring integrated administrative complexes, along with small- and medium-sized offices. (Arab Finance)
Orascom Investment Holding (OIH) is seeking to build four hotels in the fields of tourism and entertainment in Egypt with up to $300 million in investments, CEO of Orascom Investment Holding (OIH) Naguib Sawiris stated during the Fourth Annual Hapi Conference.
OIH has focused investments, mainly in the fields of the new and renewable energy sector, Sawiris added. Sawiris noted that his company is considering entering the field of electric vehicles (EVs) in Africa. It is worth noting that OIH reported a consolidated profit attributable to the parent company of EGP 94.887 million in H1 2022, compared to a consolidated loss of EGP 93.064 million in H1 2021. OIH, formerly Orascom Telecom Media and Technology Holding, is an Egypt-based holding company engaged in the telecommunications sector. It mainly engages in global systems for mobile communications, media and technology, cable, energy, financial, real estate, and entertainment businesses. (Hapi Journal)
Egyptian billionaire Naguib Sawiris said there is no intention to offer Ora Development on the Egyptian Exchange (EGX) at the present time or interest to carry out new acquisitions.
He further added that Orascom Investment has been directed to invest in Africa, particularly in the new and renewable energy field, revealing that they are currently studying establishing electric vehicle charging stations in the world's second-most-populous continent. Moreover, Sawiris revealed plans to build four hotels in Egypt with investments ranging from $200 million to $300 million through Orascom Investment. Two of the 4 hotels are planned to be built at North Coast while the two others will be in Cairo and the Pyramids area. Addressing the fourth annual economic conference of Hapi Journal earlier today, Egypt's Minister of Planning, Hala El-said, revealed that the first group of initial public offerings (IPOs) fund will be completed within a few weeks at a value of $3 billion. El-Said further added that the country targets another $3 billion from offering the second group next year, noting that investments of the private sector represent 55% of Egypt’s economy. In the meantime, COP27 Climate Champion, IMF Executive Director and UN Special Envoy on Financing the 2030 Agenda, Mahmoud Mohieeldin, said climate investments in Africa have reached more than $11 billion, of which the private sector contributes not more than 3%. (Mubasher)
Menassat Developments inked a strategic partnership agreement with a consortium comprising Solid Construction as well as Dar for Construction and Trading (DETAC) to carry out the concrete structure works of a commercial, administrative project in the New Administrative Capital (NAC) at a value of EGP 650 million.
Ahmed Amin Massoud, Chairman of Menassat Developments, pointed out that the project is scheduled to be fully completed in 2025 at an investment cost of EGP 2.50 billion.The property developer had assigned the project’s engineering consultancy to Pinnacle Group, whereas Sabbour Consulting will oversee the construction works. Meanwhile, EHAF Consulting Engineers will be responsible for the design and implementation phases of the commercial project. Additionally, Nile Engineering Consulting Bureau will perform the soil tests, while UAE-based Eltizam Asset Management Group will handle the facilities and assets of two projects owned by Menassat Developments. Tarek Bahaa, CEO of Menassat Developments, revealed that the company's current investments amount to around EGP 3.10 billion, of which EGP 2.50 billion has been invested in NAC project that spans 19,870 square metres. Meanwhile, the remaining EGP 600 million is pumped into a development located on an area of 4,360 square metres in New Cairo. (Arab Finance)