Egypt's parliament calls for restricting foreign borrowing to very narrow limits | Zilla Capital

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13 Jun 2023

Egypt’s parliament calls for restricting foreign borrowing to very narrow limits

Egypt’s parliament calls for restricting foreign borrowing to very narrow limits. The Chairman of Egypt Parliament’s Budget Committee, Fakhri El-Fiqi, has called on the government to restrict foreign borrowing, citing the global pressure caused by high-interest rates. During a parliamentary session, El-Fiqi presented the committee’s report on Egypt’s Budget and Development Plan for the upcoming fiscal year. He emphasized the need for greater control over projects funded by foreign loans to ensure their effectiveness. El-Fiqi also recommended prioritizing the completion of ongoing investment projects before initiating new ones. Additionally, he urged the government to address soaring inflation by implementing stronger market supervision and taking measures to rectify the trade imbalance. On a positive note, El-Fiqi commended the government’s increase in salary allocations and social spending, particularly in food and fuel subsidies, while acknowledging the challenges posed by the COVID-19 pandemic and the Russia-Ukraine war. The proposed budget reflects a substantial increase in revenues and spending, primarily driven by tax revenue growth. (Al Ahram)

Egypt’s mobile operators seek to raise prices on services by up to 30%
Egyptian mobile network operators are planning to increase the prices of all services by up to 30%, given the decline in their profit margins amid persisting inflation and depreciation of the Egyptian pound, two sources familiar with the matter told Asharq Business on June 12th.The companies, namely Vodafone, Orange, Etisalat, and WE, submitted price increase requests, yet no final decision has been made yet, one source said, adding that the increase could be effective in the coming days before the summer vacation season. The increase in prices is expected to range between 10% and 30%, an official said. (Alsharq Bloomberg)
Egyptian and Moroccan Industry Representatives Discuss Enhancing Cooperation at Plast Expo.
Mohamed Mageed, CEO of Egypt's Chemical Industries Export Council, held discussions with Nabil Sawaf, Chairperson of the Moroccan Plastics Federation (FMP), and representatives from the organizing company of Plast Expo in Morocco. The meeting took place during the exhibition, where they explored ways to enhance the success of future editions. They focused on attracting more Egyptian companies to participate, facilitating bilateral meetings, and expanding the exhibition's reach to attract clients from various countries. Mageed highlighted the Council's strategy of promoting a green and circular economy in Egyptian products exported to Morocco, aligning with global developments in the plastics industry. The chemical industries and fertilizers exports from Egypt to Morocco experienced significant growth, ranking first among Egyptian non-oil exports to Morocco. The exhibition, supported by Moroccan governmental agencies and in partnership with the Egyptian Chemical Industries Export Council, featured the participation of 26 Egyptian companies. (Daily News)
UAE’s Aldar in talks to acquire 100% of financially distressed IMKAN Misr.
UAE-based real estate developer Aldar Properties is currently in talks to acquire 100% of the financially distressed firm IMKAN Misr, owned by the institutional investment group Abu Dhabi Capital Group. IMKAN Misr has incurred huge losses recently due to the devaluation of the Egyptian pound and low-price selling compared to high development costs of projects, one source said. Aldar Properties’ potential acquisition aims to rescue and pull IMKAN Misr out of its ongoing losses, the source added. (Alsharq Bloomberg)
Samih Sawiris plans for new tourist destination similar to El-Gouna in Saudi Arabia.
Egyptian billionaire Samih Sawiris plans to build a tourist destination similar to Egypt’s El-Gouna in Saudi Arabia, as part of his investment plans in the kingdom this year, the business tycoon told Asharq Business on June 11th, on the sidelines of the Arab-Chinese Business Conference held in Riyadh. The first phase of this project will be carried out with no less than $500 million in investments, Sawiris said. The anticipated project, which overlooks the Red Sea, will be implemented in partnership with investors from the Saudi private sector, he pointed out. Sawiris added that he also plans for a tourism project in Jeddah to revive an ancient heritage area, as part of the kingdom's plans to highlight Saudi heritage and culture. This project is expected to be implemented within five years and is set be the largest attraction in Jeddah, similar to the Diriyah area in Riyadh, he said. Moreover, Samih plans to build a new hotel in Switzerland with an investment of $200 million, with construction works to start early next year. (Arab Finance)
Saudi Arabia invests in strategic location to connect 3 continents.
Saudi Arabia's Minister of Investment, Khalid Al Falih, highlighted the strategic importance of the nation's location and emphasized its commitment to utilizing and investing in connectivity among the three continents as a key pillar of Vision 2030. Speaking at the 10th Arab-China Business Conference in Riyadh, Al Falih discussed the longstanding relations between Saudi Arabia and China, emphasizing the common interests shared between the two countries. He also highlighted the importance of connecting Arab countries through mega projects with added value in manufacturing and logistics, aligning with the objectives of China's Belt and Road Initiative (BRI). The conference included dialogue sessions on investment and financing along the BRI, featuring participation from prominent figures from Egypt, Oman, China, and Hong Kong. (Mubasher)
Egypt and Jordan Sign Agreement to Enhance LNG Cooperation and Energy Security.
Egypt and Jordan have entered into a collaboration agreement that enables Egypt to utilize the floating storage regasification unit (FSRU) at Aqaba's Sheikh Sabah port. The agreement allows Jordan to receive LNG from Egypt and, if needed, pump back natural gas through transborder pipelines. The aim is to reduce operational costs for LNG storage and regasification while ensuring gas supplies for both countries. Additionally, the collaboration extends to supplying the Jordanian industrial sector with natural gas, contributing to cost reduction in Jordan's electricity system and enhancing energy security. The agreement was signed by the ministers of energy and mineral resources from both countries. Egypt's transition from a gas importer to an exporter has been facilitated by increased natural gas production. The country has ambitious plans to boost petroleum exports and achieve an annual oil balance surplus. In 2022, Egypt's natural gas production surged, allowing for both domestic demand fulfillment and significant exports. (Arab News)
Global Data Reviles that the Egyptian economy is expected to decline to 4% in 2023.
GlobalData, a data and analytics firm, warns that Egypt's economic prospects are being negatively impacted by import controls and inflation caused by the devaluation of the Egyptian pound. These factors are expected to hinder domestic demand and investment, leading to a projected economic retreat from 6.6% in 2022 to 4% in 2023. The report highlights multiple devaluations of the Egyptian pound in 2022 and the subsequent pressure on the currency due to a shortage of US dollars. The Central Bank of Egypt raised interest rates multiple times in 2022 to control inflation, which has increased the burden of servicing government debt. Economic reforms are now demanded by Gulf allies as a condition for aid, posing challenges to the government's privatization efforts. The combination of currency devaluation and supply disruptions is predicted to lead to a substantial increase in the inflation rate, impacting domestic demand. The IMF has approved a $3 billion loan for Egypt, subject to economic reforms and the adoption of a flexible exchange rate within four years. (Mubasher)
Suez Canal posts a total of $50.9bn revenues in 10 Years
The revenues of Egypt's Suez Canal amounted to $50.90 billion during the last 10 years, according to the Central Agency for Public Mobilization and Statistics (CAPMAS) data. The agency also highlighted that the canal registered the highest revenues in its history at $7 billion during fiscal year (FY) 2021/2022. During the 2013-2022 period, the number of vessels crossing the canal reached 186,900 ships, while the ship tonnages stood at 11.10 billion tonnes. In the first quarter (Q1) of 2023, Suez Canal recorded revenues valued at $2.30 billion, marking a 35% year-on-year (YoY) leap. (Mubasher)
Egypt targets $12B in FDI for FY2023/24:
Egypt expects luring foreign direct investments (FDI) of $12 billion in the upcoming fiscal year (FY) 2023/2024, up 20% from the expected figures for the current FY 2022/2023, the General Authority for Investment and Free Zones’ (GAFI) Chairman Hossam Heiba told Asharq Business on June 12th.The golden license was granted to 17 firms in Egypt, while requests submitted by around 40 companies to obtain the license are under consideration, Heiba noted. Heiba’s remarks came on the sidelines of the Arab-China Business Forum that began in Riyadh on June 11th. (Alsharq Bloomberg)