Production and exports in Egypt’s fertilizer sector will continue to increase between now and 2025
For our top talks today, first, production and exports in Egypt’s fertilizer sector will continue to increase between now and 2025, despite recent hikes on export fees, according to Fitch latest published report. Egypt is already a major player in the global fertilizer market, and will likely reinforce its position over the coming three years. It is worth noting that nitrogen export fees have almost quintupled in 2021. Companies now have to pay 2,500 EGP to export a ton of nitrogen fertilizer until mid-2022, up from EGP 550 at the beginning of the year.
- Second, Egypt will host the 2022 Ministerial Gas Forum that will be organized by the International Energy Forum and the International Gas Union (IEF-IGU).
The event’s agenda will focus on the post-covid economic recovery, the current surge in natgas prices. It is worth noting that Malaysia hosted the seventh IEF-IGU Ministerial Gas Forum Roundtable in December 2020 which discussed the unprecedented shock of the COVID-19 pandemic and the role of natural gas in strengthening energy security.
- Moreover, Egypt’s Ministry of Finance launched the pilot program of electronic invoicing for business-to-consumer transactions.
The step marks a new phase of the government’s efforts to bring more Egyptian businesses into the formal economy and make it more difficult to avoid giving the taxman his due. Around 100 companies are taking part in a six-month trial phase during which they will need to record all transactions via a real-time electronic system. Among the 100 companies taking part in the pilot are consumer electronics giant El Araby, hypermarket Carrefour, retailer Awlad Ragab and auto distributor Kia.
- And for our COVID-19 watch, Egypt received around 1.5 million doses of AstraZeneca vaccines on September 22nd.
Earlier this week, the country received 851,000 doses of AstraZeneca vaccines, supplied by Germany under the Gavi / Covax program. Additionally, the French government granted Egypt a total of 546,000 doses of AstraZeneca vaccines during the week. However, Egypt is expecting to receive around 3.5-4 million doses of AstraZeneca this week from France, Germany, Greece and Poland.
- Moving to our M&As and companies talks, Amer Group Holding discloses that it has acquired the right to trademark three new restaurants.
Amer Group acquires the trademark of “Studio Misr, Cofchino and Carino’s” restaurants. Also, on August 17, Amer Group disclosed that the management of the Porto Heliopolis project was assigned to the Marriott International Group, which is specialized in the field of hotel management. Moreover, the group launched two new projects in Port Said and Minya, with an investment cost of approximately 7.7 billion EGP (5 billion for the first and 2.7 billion for the second).
- In addition, Talaat Moustafa Group announced a strategic partnership with leading fashion group “Azadea” to operate 13 new brands, in Open Air Mall - Madinaty, the largest shopping mall in Egypt.
The new brands are scheduled to open during the spring of 2022. The mall will offer its visitors and shoppers an unprecedented experience in Egypt, as it will include 4 trams to roam between the various buildings of the mall, with a design inspired by the tram located in the American city of San Francisco, which gives a special and distinctive character to the mall and accompanies shoppers on fun-filled tours to enjoy the unique view of the lakes industrial.
- likewise, digital financial company, Paynas, signed an agreement with digital advertising firm, E3lany, to provide financial services.
Under the deal, various financial services will be provided to taxi drivers, including allowing them to advertise on their vehicles as an additional income stream. The deal also includes providing funding services to renew taxis and instalment programs to buy spare parts, in addition to offering cashless payment services. Over 1 billion EGP worth of business is expected to be achieved in the first year under the deal.
- In the same fashion, Egypt Education Platform (EEP) entered into definitive agreements with the founders of AIA international school,
an LS Investment Office portfolio company, to become the latest addition under its International Schools stream. The new investment is considered a strategic step towards diversifying the platform’s educational offering range via expanding its IB offering in AIA which ranks as one of the most sought-after rigorous curricula in the local market and globally.
- Equally important, the Sovereign Fund of Egypt (SFE) is studying investment opportunities in the fintech sector with a focus on small and medium projects.
The fund plans to transform the historic Bab Al-Azab area in Cairo’s Salah Al-Din Al-Ayoubi Citadel into the first integrated innovation zone in the Middle East and North Africa. Also, several projects in the health sector are also being studied such as the expansion of pharmaceutical exports. Obviously, the fund aims to attract private investments in Egypt’s underutilized assets and create wealth for future generations and boost the country’s economic growth.
- Finally, regarding our EGX talks, first, the Egyptian Exchange (EGX) capital gains tax will come into force in January 2022.
Earlier in September, the Egyptian government revealed plans to instate a 10% capital gains tax on the capital gains realized by residents (retail and institutional investors) from the sale of shares registered on the EGX. The capital gains realized by non-residents from the sale of shares registered on the EGX or owned by non-resident companies or individuals will not be subject to a capital gains tax. Second, e-Finance, the state-owned fintech platform, determined its price range between EGP 29.6 billion and EGP 36 billion. The valuation represents an earnings multiple of 44.7 times for 2022’s profits. The company eyes generating revenues worth 1.86 billion EGP in 2021 and 2.6 billion EGP in 2022.
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