Two new gold exploration agreements have been signed yesterday
First of all, two new gold exploration agreements have been signed yesterday. A high-ranking government official pointed out that the signing will take place with two of the three winning companies which are Barrick Gold, B2 and Centamin. He added that the three companies are among the largest global entities in the field of gold exploration and production, and they have great experience and an honorable record and history in this activity. These companies have the capabilities, expertise and technologies that qualify them to make commercial gold discoveries in record time.
- For our macro talks, Egypt’s balance of trade deficit narrowed by 13.3% year-on-year to USD 3.1 bn in April 2021 compared to USD 3.5 bn in April 2020. It is worth mentioning here that Egypt's imports increased much more compared to the country’s total increase in exports which haven’t been significantly compensated.
So, Egypt imports increased by 8.1% while its exports decreased to USD 5.92 bn in April, compared to USD 5.47 billion in April 2020 on the back of higher imports of passenger cars by 58.9%, iron raw materials and condensates by 58.6%, and plastics by 27.2%.
- Second, great happy news to share, Russian tourists are finally coming back. Goldman Sachs has estimated that the return Russian flights will eventually worth USD 3 bn.
Directs flights between Russia and Egypt’s Red Sea destination have been suspended for 6 years long since the 2015 Metrojet crash in Sinai. Adding also second great news; Egypt now allows passport holders from 74 countries to obtain a visa to the country electronically to boost the tourist movement. The system provides a secure electronic payment feature to pay for the tourist visa, which is USD 25 for one trip or USD 60 for multiple trips, with the visa issued in a maximum of seven days.
- In the same token, Egyptians will now pay EGP 300 to issue mandatory ins. certificate when issuing or renewing their passports under the travel ins. policy issued last month by the Financial Regulatory Authority (FRA), effective as of 3 July.
The new policy covers all overseas trips that do not exceed 90 consecutive days. It sets a limit of EUR 30,000 in ins. coverage for medical expenses and hospitalization costs provided that the patient bears the first EUR 100 in expenses. The decision also covers the costs of transportation of the insured person to Egypt in case of illness or accident, as well as the costs of repatriating their bodies in case of death.
- Moving to Egypt green economy, President Sisi start strategizing for green hydrogen production.
So far, the German and the Belgian energy companies Siemens and DEME Group are conducting a feasibility study for the production of green hydrogen. Last week, the Italian energy company, Eni group signed a deal for hydrogen production in Egypt. Egypt plans to raise the country’s electric capacity from renewable sources to 42% by 2035. We believe that Egypt in the coming years will be more involved in industrial and manufacturing, going green in its initial period because it is the best way to evade climate change consequences.
- Regards, Egypt's political talks, we need to mention the GERD filling. Ethiopia has been avoiding legal binding deals with Egypt and Sudan for the past decade. The security council is now taking the issue more seriously after Egypt’s efforts for the UN to take responsibility.
Ethiopia will more likely disregard the UN security council and support African Union talks instead. However, Egypt is on its last legs for peaceful talks and have exhausted all their diplomatic efforts for the past decade.
- In other talks abroad, Oil prices rise again as U.S. inventories decline. Brent crude oil futures settled for USD 1.45 higher at USD 75.55. The only way to ease oil prices is to contain OPEC threats.
The dispute between the UAE and Saudi Arabia which last week blocked a proposal to increase production has thrown the market into uncertainty. The prices rising rapidly as the absence of new supply causes the market to tighten further. We think that a dispute between two of OPEC’s largest producers could pose an existential threat to the alliance, potentially resulting in a new price war and plunging prices.
- Finally regards Egypt’s COVID-19 vaccines talks, Egypt Health Minister Hala Zayed stated that the country will receive its first shipment of Pfizer and Johnson & Johnson vaccines, as well as a new batch of the Oxford / AstraZeneca jab in the coming days.
Adding that Egypt is also set to receive in the coming day's raw materials to manufacture another 5 million doses of homemade Sinovac. It is worth mentioning that the EU will establish EUR 1 bn COVID-19 vaccine manufacturing facilities in Africa with Egypt, Senegal, South Africa, Rwanda, and Morocco being among the leading candidates. Vaccine imports currently account for 99% of Africa's needs, while vaccination rates still don’t exceed 1% of the continent’s population.
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