MPs this week gave initial approval to legal amendments that would allow the SCA to “buy, sell, lease, exploit and benefit from fixed and movable assets” owned by the authority in order to capitalize a new 10 billion EGP fund
MPs this week gave initial approval to legal amendments that would allow the SCA to “buy, sell, lease, exploit and benefit from fixed and movable assets” owned by the authority in order to capitalize a new 10 billion EGP fund. It would also allow it to use its own financial resources and revenues. It’s not clear whether this includes canal revenues, a key source of FX income for the public purse. It is worthy to mention that a large number of MPs voted against the law on Monday, voicing concerns that it will pave the way for the SCA to sell assets without parliamentary oversight. And most importantly, The Madbouly government yesterday denied claims that a proposal to set up a fund for the Suez Canal Authority will enable it to privatize assets by the back door. (Al Mal)
- In addition, the cabinet moved to calm fears over transparency, saying that the fund’s accounts will be supervised by the Central Auditing Organization and that the SCA would not sell off its assets by the back door
It did not acknowledge complaints about the lack of parliamentary supervision. The fund will only be able to sell fixed and moveable assets, not the canal itself, House Speaker Hanafi Gebali said during last Tuesday’s session, suggesting that selling the canal would be unconstitutional. “The fund will do what all funds do in terms of buying, selling, and leasing assets, but it says nothing at all that it will sell Suez Canal.” (Al Mal)
- The government is in early-stage negotiations with Abu Dhabi Ports and Qatar Ports Management Company (Mwani) to manage and operate ports in Egypt
Transport Minister Kamel El Wazir announced. The Gulf logistics companies are interested in acquiring contracts to run the Ain Sokhna and Safaga ports. Gulf companies could soon be in charge of many of Egypt’s Red Sea terminals: ADP has already been hired to build and run a terminal at the port of Sokhna and is bidding to build a new terminal at Safaga port, while local media has reported that the Qatar Investment Authority (QIA) is in talks with the Madbouly government to develop and manage the port of Safaga under a 25-year contract. (Al Mal)
- Meanwhile, an Egyptian-Dutch JV will build and manage a grain logistics hub at Alexandria port, under an MoU signed between the two companies and Alexandria Port Authority
The Transport Ministry said. Egyptian-Dutch Shipping Company (EDSCO) is a joint venture between a Dutch firm named Vitra and Egypt’s El Fateh, according to the statement. We weren’t able to find an online presence for either firm or their joint venture. Amid a backlash from some opposition MPs over government privatization plans, Transport Minister Kamel El Wazir reiterated that the government is not selling ports, but is rather entering partnerships with both local and foreign private-sector players to manage and operate them. (Al Mal)
- Healthtech startup CheckMe has acquired a majority stake in virtual clinic app Doctor Online in a transaction that gives CheckMe a total market value of 20 million USD
The acquisition will help CheckMe tap into more verticals to create the next “healthtech superapp” in Egypt and across the region, Ahella El Saban, co-founder of sell-side advisor Exits. El Saban declined to disclose the size of the stake or the value of the transaction. The acquisition will allow CheckMe to expand to comprehensively cover patients’ needs, and to tap Doctor Online’s database of both users and clinicians. (WAYA)
- US’ DFC investment portfolio in Egypt hits 1.5 billion USD: Al-Mashat
The United States International Development Finance Corporation’s (DFC) investments portfolio in Egypt amounted to 1.5 billion USD, Minister of International Cooperation Rania Al-Mashat stated. The portfolio covers projects in the sectors of infrastructure, financial services, and healthcare. The minister stressed on bilateral cooperation with the US as well as promoting the private sector under the Nexus on Water, Food, and Energy (NWFE) program. (Hapi Journal)
- Rania Al-Mashat also highlighted the possibility of reinforcing cooperation with DFC in the field of green hydrogen generation
Which comes in line with the state’s efforts to become a regional energy hub. It is worth noting that the ongoing development cooperation portfolio between Egypt and the US has reached about 1 billion USD since 2014. In 2022, the United States Agency for International Development (USAID) signed seven development grants worth $160 million with Egypt across a number of sectors, including investment and climate works. (Hapi Journal)
- Egypt to boost cooperation with international organization for customs system development
Egypt is committed to strengthening cooperation with international organizations in terms of the development of the customs system as per the international standards that bolster governance in line with the set regulations by the World Customs Organization. The African continent is on the verge of a new era of regional economic integration with the African Continental Free Trade Area (AfCFTA) agreement coming into force. This agreement will connect all African countries in one free market, facilitating the trade movement across the continent. (Al Mal)
- Egypt’s economic growth likely to slow down 4.5% in FY 2022/2023: World Bank
The World Bank Group (WBG) has expected Egypt’s economic growth to slow down to 4.5% in fiscal year (FY) 2022/2023 from 6.6% in FY 2021/2022. Thereafter, growth is likely to edge up as the North African country maintains macroeconomic stabilization and structural reforms. Inflation is expected to exceed the Central Bank of Egypt’s (CBE) target range and remain in double digits in FY 2022/2023 impacted by the depreciation of the EGP, supply bottlenecks, and the potential changes in fuel prices. (Reuters)
- Higher interest rates, accompanied by the government social mitigation package, are likely to cause a slowdown in fiscal consolidation through FY 2022/2023
With the fiscal space projected to remain constrained by the need to service debts as interest payment accounted for 32% of total spending in FY 2021/2022. The social measures announced by the government in March, July, and October 2022 are forecast to provide partial mitigation, however, the poverty rate may rise due to inflation reflected in real incomes. Regarding the state’s FY2022/2023 budget, the international financial institution expected spending on health and education to drop to 1.3% and 2% of gross domestic product (GDP). Moreover, the World Bank projected that Egypt’s debt-to-GDP ratio would resume its downward trajectory over the medium-term. (Reuters)
- IMF eyes flexible exchange rate in Egypt after letters of credit phase-out
The International Monetary Fund will be watching for a shift by Egypt to a flexible exchange rate after a requirement to finance imports through letters of credit is phased out at the end of this month. The IMF's executive board on Friday approved a 46-month, 3 billion USD financial support package for Egypt, saying it included a "permanent shift to a flexible exchange rate regime". (Reuters)
- Ivanna Vladkova Hollar, the IMF mission chief for Egypt, stated that "We will be looking very closely at how the FX market is functioning
Which would then give us the ability to have a conversation with the authorities and our board as to [whether] what we are seeing is really consistent with a flexible exchange rate regime". She also noted that demand for dollars could be eased due to a weaker pound, pointing out that an immediate disbursement of about 347 million USD under the program should be available to Egypt this week. The IMF expects the exchange rate to be volatile daily once the letters of credit requirement is lifted. (Reuters)
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