Egypt overall deficit increased during the first 8 months of the current fiscal year 2021-2022 to 5.15% of GDP

Newsletter

28 Mar 2022

For our top talks today, first, Egypt overall deficit increased during the first 8 months of the current fiscal year 2021-2022 to 5.15% of GDP, compared to 5% for the same period of the last fiscal year, under pressure from increased expenditures, especially debt interests, government support and wages. The Egyptian government expects to reduce the total deficit in the fiscal year 2021-2022 budget to 6.7% from 7.4% a year ago. However, it is expected that the total deficit in Egypt will record about 7.5% by the end of the current fiscal year, “due to the rise in commodity prices, interest costs, and the recent weakness of the pound. (Egyptian Ministry of Finance)

Second, the Egyptian government’s new program with the International Monetary Fund (IMF) will not include any additional burdens on citizens, according to Egypt’s finance minister Mohamed Maait.
The program is aimed at saving the achievements of the country’s economic reform and the sustainability of positive growth rate, along with keeping the decreasing trend of deficit and debt-to-GDP ratio. The minister revealed that the government is in talks with the IMF for a new program that supports the stability of Egypt’s economic and financial conditions, and promotes the country’s ability to withstand consequences of the war between Russia and Ukraine which weighed on economies and aggravated inflation. The government is closely observing the ramifications of the crisis and planning to handle it in a flexible manner that accounts for the worst-case scenario. (Hapi Journal)
Egypt is negotiating Argentina, India, France, and the US for wheat imports, but the country is not in a hurry to buy, according to the Egyptian supply minister Ali El-Moselhi stated.
Egypt is seeking alternatives to the Russian and Ukrainian markets which faced disruption in wheat supplies due to the war. Last week, Bloomberg reported that Egypt is in final talks with India regarding receiving wheat supplies. El-Moselhi noted that Egypt not in need of tenders for the time being, yet we are planning for the whole year and, therefore, weighing all possibilities. The Egyptian government will tap the local market and could start tenders in the middle of the local harvest season. (Reuters)
Egypt has lowered economic growth forecasts for the next fiscal year 2022-2023 to 5.5%, which is lower than the 5.7% expected before the Russian-Ukrainian crisis, according to the Minister of Planning and Economic Development Hala Al-Saeed.
The growth of the economy in Egypt reached 3.3% for the last fiscal year 2020-2021, which witnessed the spread of the Corona pandemic, and the Egyptian economy recorded a growth of 9% during the first half of the current fiscal year 2021-2022, compared to 1.35% a year ago. Egypt's primary balance achieved a surplus of 0.3% in the first 8 months of the year until the end of last February, compared to a surplus of 0.36% a year ago, and the primary surplus means that the state's revenues cover its expenses without calculating debt interests. (Ministry of Planning and Economic Development)
Engineer Ihab Nasr, Assistant Undersecretary of the Central Bank Governor for Banking Operations and Payment Systems, revealed that all banks operating in the Egyptian market will join the instant payments network by the end of next April.
He confirmed that 10 banks have actually joined the network, noting that the national system of the instant payments network and the "InstaPay" application allow financial transactions to be conducted electronically in an instant. InstaPay enables banking sector customers to transfer funds in real time between bank accounts with banks. He explained that this application will be free of charge until next June, after which it will be for a fee, revealing that there is cooperation with the largest international companies in the field of data security. He stressed that the account allows transfers of 60 thousand pounds per day, and 200 thousand pounds per month, noting that, like any banking service, it has a maximum transfer limit. (Al Mal)
And for our EGX and companies talks, Zilla Capital completes the turnaround of Marsa Bagush North Coast project by Shehab Mazhar.
This multiple-staged transaction of full acquisition and financial restructuring (equity and debt) has been in process for the past 13 months. Zilla Capital is proud to be the mastermind for this transaction throughout its different stages that started since the structuring of the distressed company to be turned into a transactable asset, going through the later phases of capital restructuring, and mapping the different components of the turnaround with the new shareholders of SQM as part of promoting the turnaround success paving the way for equity and debt raise and ensuring a sustainable capital structure and a whole new market positioning for the rebranded asset Marsa Bagush. Zilla Capital and its team are pleased to continue being the exclusive financial advisor for SQM on the remaining activities of this project and the future ones. (Zilla Capital)
The National Bank of Egypt (NBE) and a group of banks have launched Avans Manara for Direct Investment, the first company in Egypt for investment in Fund of Funds (FoF) which supports small and medium-sized enterprises (SMEs).
Banks participating in the project include Banque Misr, Banque du Caire (BDC) (BQDC), Ahli United Bank (AUB), Suez Canal Bank (SCB), United Bank, and Attijariwafa Bank Egypt, along with Misr Insurance Holding (MIH) and Avans Capital Group. Total target investments in Avans Manara amount to around 2 billion EGP, Chairman of NBE Hisham Okasha revealed, adding that 905 million EGP of the company’s issued capital were collected. The NBE contributed 300 million EGP to the company’s issued capital, while Banque Misr, Banque du Caire, AUB, MIH, and SCB contributed 100 million EGP each. (Arab Finance)
Palm Hills issues sukuk worth EGP 3.251 billion in cooperation with Sarwa Capital.
Shares subject to partial or total early depreciation at a value of 3.251 billion EGP and for a maximum period of 10 years, to finance the construction and building works of the Badia project in 6th of October City. The issuance was rated BBB- by the Middle East Credit Rating and Investors Service MERIS. Palm Hills Development and its subsidiary Palm Urban Development (the company responsible for the Badia project) have received a BBB+ credit rating. This issuance is the first of the type of Musharaka Sukuk, whereby the proceeds of the subscription are used to finance the investment cost of an integrated urban project. The financing shall be on the basis of participation between the beneficiary company and the issuing company. (Al Mal)
EFG Hermes is studying a package of deals in education, health and energy.
The direct investment sector in EFG-Hermes Holding is studying a package of various deals in healthcare, education and energy, in addition to thinking about technology and green hydrogen activity, by establishing platforms and private investment funds directed to it. The group’s direct investment sector was a forerunner in focusing on the renewable energy sector by establishing the “Vortex Energy” company, noting that investment in the renewable energy sector has become the talk of the world. At the present time, especially with the historical rise in the prices of traditional energy such as natural gas and electricity. (Al Mal)
Fawry Company for Electronic Payments and Technology Solutions intends to resume its expansion plans in the African market during the next stage after being in Sudan as a first stop inside the continent in its first investment outside the country since its establishment in 2008.
Fawry is studying presence in more than one African country; Including, but not limited to, Nigeria and the south of the continent; The African continent has promising investment opportunities in the field of digital payments and financial technology solutions. Fawry aims, behind the expansions in Africa, to increase the volume of its business and attract new customers on its electronic platform. (EGX)