Egypt supports exceptionally more than a third of families until the end of the year
Starting our morning with some economics and markets talks, Egypt supports exceptionally more than a third of families until the end of the year. Egypt decided distributing exceptional aid to 9 million families for the next 6 months, which is estimated at about a third of Egyptian families, at a total cost of 11 billion EGP to families in need to face the repercussions of the current global economic crisis. Egypt will also expand the offering of packages of subsidized food commodities at half the cost, at a rate of 2 million packages per month, to be distributed through the armed forces outlets. (Bloomberg Businees)
- It is worth noting that Egypt poverty rate decreased to 29.7% in the fiscal year 2019-2020 from 32.5% in 2017-2018.
And the average annual net income of the family at the level of the Republic increased by 14.4% to 69.1 thousand pounds in 2019-2020 from 60.4 thousand pounds in 2017-2018. In our own view, does the number of families that will be assisted in the social protection program mean that families living below the poverty line have increased by about one million families during the current crisis? The six-month period means that there is a glimmer of hope for the government to finish the work. (Zilla Capital)
- Moreover, the International Monetary Fund (IMF) stated that Egypt needs deeper reforms with its request for another loan.
The Executive Board of the Washington-based fund said in a statement after its meeting to assess the latest loan program in Egypt, that Egypt needs to make "decisive progress on deeper financial and structural reforms" to enhance the competitiveness of the economy and make it more resilient to shocks. In 2020, Egypt secured 5.2 billion USD under a credit standby agreement in addition to 2.8 billion USD under the IMF's Rapid Financing Instrument, helping the authorities address the impact of the coronavirus. (Hapi Journal)
- The IMF assessment revealed that the SBA achieved its primary objective of maintaining macroeconomic stability and that policy implementation was broadly in line with program objectives.
While the International Monetary Fund referred to the Egyptian government's goal of enhancing confidence through a stable currency, and said that "it was possible to promote greater fluctuations in the exchange rate during the credit standby agreement to avoid the accumulation of external imbalances and facilitate adaptation to shocks." Egypt, a major food importer, is struggling to cope with record grain prices fueled by conflict in Europe. (Hapi Journal)
- More on the IMF, the IMF has downgraded its projections for Egypt’s real gross domestic product (GDP) growth in fiscal year (FY) 2022/2023 to 4.8%.
It is worth noting that the IMF previously set its projection for the country’s GDP growth at 5.0% for FY 2022/2023. On the other hand, the international institution has maintained its forecast for Egypt’s real GDP growth at 5.9% in FY 2021/2022. The IMF noted that this is needed in order to bolster the private sector development, enhance governance, and reduce the role of the state. (Arab Finance)
- Egypt’s Financial Regulatory Authority (FRA) has allowed the Financial Group for Securitization to issue the first future flow securitisation multi-issuance programme at a value of 2 billion EGP.
The three-year program will be concluded on Cairo for Investment and Real Estate Development (CIRA). The program’s first issuance shall not exceed 800 million EGP for a period of seven years. It is worth noting that in 2020, the securitization issuance size surpassed 24 billion EGP, whilst in 2021, it totaled 18.8 billion EGP. (EGX)
- Moving to our EGX and companies talks, Egypt’s Infinity Group and Nigeria-based Africa Finance Corp (AFC) are seeking to secure up to 4 billion USD to boost the size of Lekela Power, the largest renewable power company in Africa.
The two groups are aiming to raise between 2.5 billion USD and 4 billion USD over the coming four years to back their recently acquired business. Once the acquisition transaction is fully complete, Infinity and AFC will merge their renewable assets into a new entity to be named later. The recent takeover of Lekela Power will help both companies to benefit from governments’ support to provide more access to electricity in Africa through renewable resources. (Bloomberg)
- CIRA’s future flow securitization program gets regulatory approval.
The Financial Regulatory Authority (FRA) has given EFG Hermes the go-ahead to take EGX-listed education provider CIRA’s planned 800 million EGP issuance of future flow securities to market, in what would kick off the company’s 2 billion EGP future flow securitization program. (Hapi Journal)
- Aman Holding announced its expansion in nano-finance and Islamic finance, in addition to, the launch of its new fourth subsidiary AMAN Securitization.
AMAN will offer a credit limit of 3,000 EGP to support marginalized communities and achieve financial inclusion. The company had invested 240 million EGP to increase its capital to 615 million EGP. AMAN plans to issue 500 million EGP securitized bonds in the next three months. (Arab Finance)
- Sixth of October Development and Investment Company (SODIC) (OCDI) reported a 77% year-on-year (YoY) growth in gross contracted sales during the first half (H1) of 2022, registering 6.67 billion EGP.
The company collected 2.96 billion EGP in net cash during H1 2022, up from 2.47 billion EGP in the same period a year earlier. In the first six months of the year, SODIC delivered 464 units, in its East Cairo, West Cairo, and North Coast projects. On the other hand, cancellations amounted to 682 million EGP in the January-June period, making up 10% of gross contracted sales, compared to a cancellation rate of 9% in the year-ago period. (EGX)
Stay up to date
More Newsletter to Check
SUBSCRIBE TO NEWSLETTER
Subscribe to download our daily economics and business roundup
×
![]()