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France signed deals worth 2 bil Euros with Egypt

19 April 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

PARIS (Reuters) – France signed several deals worth about 2 billion euros ($2.26 billion) with Egypt during a visit by French President Francois Hollande to Cairo, the French president’s office said on Monday.

The deals included a satellite communications contract agreed upon following discussions between the two presidents and their defence ministries, the Elysee said.

The military telecommunications satellite is expected to be build by France’s Airbus Space Systems et Thales Alenia Space.

French energy Engie firm said earlier that it also signed LNG and renewable energy contracts during the visit.

 

(Reporting by Elizabeth Pineau and Jean-Baptiste Vey; Writing by Bate Felix; Editing by Sandra Maler)

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World Bank set to provide Egypt with first $1 billion of $3 billion loan

13 April 2016 Comments (0) Latest Updates from Reuters, Middle East, Politics

CAIRO (Reuters) – The World Bank will provide the first $1 billion tranche of a $3 billion loan to Egypt after parliament approves the government’s economic programme, World Bank vice president Hafez Ghanem said at a news conference late Tuesday.

Parliament is expected to pass the program in April.

Egypt has been negotiating billions of dollars in aid from various lenders to help revive an economy battered by political upheaval since the 2011 revolt and ease a dollar shortage that has crippled import activity and hampered recovery.

The lender had agreed to provide the first $1 billion in December but is waiting for the government’s economic programme, which outlines the broad strokes of its reform plans, to be passed by parliament.

The government presented a programme to parliament in late March that aimed to reduce the budget deficit while protecting the poor.

The World Bank told Reuters in December that the first tranche was focused on “10 prior actions for policy and institutional reforms” already implemented. The second and third tranches are linked to additional reforms the government plans.

A long-delayed Value Added Tax (VAT) that has yet to be implemented but was included in the government programme was one of the reforms agreed to as part of the first tranche, Ghanem said.

Ghanem said that there would not be specific conditions placed on future tranches but highlighted certain changes the lender would like to see, such as a shift in food subsidy policy away from reduced prices to direct cash transfers for the poor.

Egypt has delayed a number of difficult reforms, from a VAT that would increase government revenues and a civil service law that would trim the country’s public workforce, to an ambitious plan to wean the country off costly energy subsidies that has since been scaled back.

Egypt’s economy is currently growing at around 4.2 percent with a budget deficit of about 11.5 percent, the prime minister said last month.

Saudi Arabia, along with other Gulf oil producers, have pumped billions of dollars, including grants, into Egypt’s flagging economy since the army toppled President Mohamed Mursi of the Muslim Brotherhood in 2013 after mass protests against his rule.

But Egypt has said it would rely less on grants from its neighbours moving forward and would focus instead on attracting foreign investment that could relaunch its dollar starved economy.

Last week it signed an agreement with Saudi Arabia to set up a 60 billion Saudi riyal ($16 billion) investment fund among other investment agreements including an economic free-zone to develop Egypt’s Sinai region.

 

($1 = 3.7488 riyals)

 

(Writing by Eric Knecht; Editing by Toby Chopra)

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Saudi Arabia to sign $21.5 bin energy, development deals with Egypt

5 April 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Saudi Arabia is expected to sign a $20 billion deal to finance Egypt’s petroleum needs for the next five years and a $1.5 billion deal to develop its Sinai region, two Egyptian government sources told Reuters on Tuesday.

The agreements are tabled to be signed on Thursday during a visit to Cairo by Saudi Arabia’s King Salman, a rare foreign trip.

Saudi Arabia, along with other Gulf oil producers, has pumped billions of dollars into Egypt’s flagging economy since the army toppled President Mohamed Mursi of the Muslim Brotherhood in 2013 after mass protests against his rule.

The Gulf Arab countries see the Muslim Brotherhood as a threat. Egypt is struggling to revive an economy which unravelled following an uprising that toppled President Hosni Mubarak in 2011.

The development deal for Sinai comes at a time when Cairo is fighting an Islamist militant insurgency there and discontent and poverty among the population there is rife, residents say.

The petroleum financing will have an interest rate of 2 percent and a grace period of at least three years, the sources said.

Separately, the deputy head of the Saudi-Egyptian Business Council said on Tuesday that Saudi businessmen will invest a total of $4 billion in projects including the Suez Canal, energy and agriculture, and had already deposited 10 percent of that sum in Egyptian banks.

 

(Writing by Asma Alsharif; Editing by Michael Georgy and Raissa Kasolowsky)

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Egypt’s exchange bureaus investigated for hoarding dollars

3 April 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt’s General Prosecution is investigating around 15 exchange bureaus after the central bank reported them for hoarding dollars and contributing to Egypt’s currency crisis, two prosecution sources told Reuters on Sunday.

Central Bank Governor Tarek Amer is battling against a black market which is sucking up hard currency liquidity from the banking sector and hurting the pound, which has weakened to record lows of 10 per dollar versus an official rate fixed at 8.78 per dollar.

Amer met the general prosecutor on Saturday and requested an investigation be opened targeting around 15 exchange bureaus which he accused of fuelling a dollar crisis, prosecution sources said.

“Based on his request the prosecution … requested from the unit in charge of public funds to investigate these (bureaus),” one prosecution source said.

“(Amer) accused them of causing the dollar crisis by hoarding dollars and refusing to sell, which caused a rise in the price of the dollar,” he said.

Market sources say traders at exchange bureaus often do not sell at official rates, saying they do not have the dollars to sell. They then offer dollars at higher rates, unofficially, outside the exchange bureaus.

The central bank does not have an official spokesperson and officials are not available for comment.

Egypt, which relies heavily on imports, has been facing a dollar shortage since a popular uprising in 2011 drove away foreign investors and tourists, both major sources of hard currency.

The country’s foreign reserves had tumbled to around $16.5 billion in February from $36 billion in 2011.

On March 14 the central bank devalued the pound to 8.85 per dollar from 7.73 and announced it would adopt a more flexible exchange rate. Two days later it strengthened it to 8.78 per dollar and has held to that rate since.

Bankers and traders on the black market say the devaluation is failing to narrow the gap between official and unofficial rates because the demand for hard currency is high and the banks do not have the dollars to meet it.

In previous attempts from the central bank to narrow the gap between official and unofficial rates, officials from the central bank met with exchange bureaus and agreed on a range to curb prices on the parallel market.

In February, the central bank revoked the licences of four exchange bureaus after the first meeting failed to cap the price of the dollar at 8.6 per dollar.

 

(Reporting by Asma Alsharif, Ahmed Hassan; editing by Jason Neely)

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Egypt bank CEOs purged as central bank sets 9-year term limit

24 March 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt’s central bank put a time limit on the tenures of CEOs of commercial lenders on Thursday, launching a purge of several top executives that puts it on a likely collision course with the country’s banking sector.

To help modernise the sector and “inject new blood”, chief executives of public and private banks as well as the heads of foreign banks operating in Egypt would have to step down after nine years, the central bank said in a statement.

The decision is the latest surprise by Tarek Amer, a central bank governor who has moved aggressively to bring dollars into a banking system starved of foreign currency and slow the rapid fall of the Egyptian pound on the black market.

The black market rate hovered at just below 10 Egyptian pounds to the dollar on Thursday compared with the official rate of 8.78 pounds per dollar.

Amer surprised markets in recent weeks by removing dollar deposit and withdrawal caps, devaluing the currency by 13 percent in a single day, declaring a more flexible exchange rate and injecting hundreds of millions of dollars despite critically low reserves.

The decision to cap CEO terms caused consternation among bankers who described it as an unexpected overreach into the private sector’s affairs.

“It’s going to have very bad consequences,” one senior finance official, who asked to be unnamed, said.

The rule will force eight top executives to resign their positions, a senior banking official told Reuters. They include Commercial International Bank’s Hisham Ezz al-Arab and Arab African International Bank’s Hassan Abdalla.

Shares in CIB were down 1.7 percent at 1126 GMT.

There was no immediate comments from the country’s leading banks on the measure, which drew criticism from Hany Tawik, head of Egypt Private Equity Association, a group that represents business community interests.

“This is interference in an essential right of the general assembly to appoint someone that is best suited for them. It’s my right as a shareholder to choose the head of the bank,” he said.

Others such as Angus Blair, the chief operating officer of Pharos Holding, said the move was positive.

“I like the new rule for bank CEOs since it should foster younger talent and help improve institutionalisation.”

The central bank’s foreign reserves have tumbled to $16.5 billion in February from around $36 billion before the 2011 uprising that ousted long-time leader Hosni Mubarak.

His fall from power and the political unrest that followed drove away tourists and foreign investors that were key sources of foreign currency.

Around 40 public and private sector banks operate in Egypt.

Both consecutive and non-consecutive CEO terms will count towards the nine-year limit, the central bank said.

 

(Reporting by Ehab Farouk; Additional reporting by Mostafa Hashem; Writing by Eric Knecht; Editing by Tom Heneghan)

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Egypt’s GASC says seeks wheat for April 25-May 5 shipment

24 March 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

ABU DHABI (Reuters) – Egypt’s General Authority for Supply Commodities (GASC) set a tender on Wednesday to buy an unspecified amount of wheat from global suppliers for shipment from April 25-May 5.

Mamdouh Abdel Fattah, vice chairman of GASC, said the authority is seeking to buy cargoes of soft and/or milling wheat from the United States, Canada, Australia, France, Germany, Poland, Argentina, Russia, Kazakhstan, Ukraine and Romania.

Tenders should reach GASC by noon local time (1000 GMT) on Thursday. The results should come out after 3:30 p.m. local time on the same day. Wheat bids should be free-on-board, with a separate freight offer.

In its most recent tender on March 16, GASC bought 240,000 tonnes of wheat from France, Romania and Ukraine for April 15-24 shipment.

GASC is seeking to buy 55,000-to-60,000-tonne cargoes of the following:

U.S. North Pacific soft white wheat;

U.S. soft red winter wheat;

Russian milling wheat;

Ukrainian milling wheat, and

Australian standard white wheat.

 

GASC is also seeking 60,000-tonne cargoes of the following:

Canadian soft wheat;

French milling wheat;

German milling wheat;

Argentine bread wheat;

Polish milling wheat;

Kazakh milling wheat, and

Romanian milling wheat.

 

(Reporting by Maha El Dahan in Abu Dhabi, writing by Michael Hirtzer in Chicago; Editing by Chris Reese and Marguerita Choy)

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Egypt supply minister says close to wiping out graft in wheat sector

23 March 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt’s supply minister said the world’s top wheat buyer is close to eradicating graft in its strategic sector, defending the country’s management of the system against criticisms that it is vulnerable to corruption.

He said authorities distribute 6 billion loaves of bread to citizens each month and that a smart card system rolled out in 2014 had virtually ended graft in the system.

Officials, traders and bakers who spoke to Reuters for a March 15 story on the wheat sector said reforms, including the smart card system, had failed and ended up fuelling more corruption.

Challenging the Reuters story, Supply Minister Khaled Hanafi repeated his assertions that the system has saved millions of dollars in bread subsidies, reducing imports, and ended shortages that once prompted long queues outside bakeries across the country.

“We have a system now that counts every single loaf of bread consumed,” he said in an interview.

A Reuters spokeswoman said the news agency stood by its story.

Wheat has become a key issue in recent months because the stability of Egypt’s supply chain has been threatened by an agricultural quarantine official’s zero-tolerance policy on ergot, a common fungus.

The policy caused a mass boycott of state wheat tenders. The quarantine official was removed from his position.

In 2014, President Abdel Fattah al-Sisi’s government rolled out a system of smart cards designed to stop unscrupulous bakeries selling government-subsidised flour on the black market.

Corruption had been close to eliminated, Hanafi said in the interview, because the smart card system is effective and allows the ministry to monitor flows of bread.

The stakes are high for Sisi, who has promised to end graft, including irregularities in the wheat industry. Wheat shortages have sparked riots in the past. When Egyptians revolted against autocrat Hosni Mubarak in 2011 one of their most potent chants was “Bread, freedom and social justice.”

The bread subsidy programme, which feeds tens of millions of poor Egyptians, is central to avoiding unrest.

Under the smart card programme, each family is provided with a plastic card enabling it to buy five small flat loaves of bread per family member a day.

Internal statistics produced by the Ministry of Supply and reviewed by Reuters suggest the problems with the smart card system were considerable.

Hanafi says the system is almost foolproof and that his ministry has kept corruption to a minimum, in contrast to the past, when he says 50 percent of Egypt’s flour supply was stolen.

“We are serving 80 million Egyptians. And we are serving 6 billion loaves of bread per month,” Hanafi said.”Any fraction, any tiny small fraction in absolute figures, could be relatively large. But as a percent it is nothing. It is less than even the normal level of error that exists.”

 

(By Michael Georgy. Editing by Simon Robinson, Veronica Brown and Dale Hudson)

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Africa 2016 Forum on Investment

17 March 2016 Comments (0) Africa, Featured, Politics

africa 2016 forum

On February 20th and 21st, the Africa 2016 Forum took place at Sharm el-Sheikh, Egypt to address possibilities of investment and cooperation between African nations.

In an effort to boost international and regional trade and investment among African nations, Egypt hosted the Africa 2016 Forum in Sharm el-Sheikh over two days (February 20th-21st), the largest to have taken place in the area. Egyptian president, Abdel Fattah al-Sisi is hoping to strengthen ties with the county’s southern neighbors to fortify Egypt’s own economy while supporting those of their African counterparts and further co-operations, investments and business strategies were discussed at length as well as push the balance of trade to induce a more cultivated economy.

There were 5 African leaders who participated on the panel for the conference: Teodoro Obiang, President of Equatorial Guinea, Hailemariam Desalegn, Prime Minister of Ethiopia, Ali Bongo Ondimba, President of the Gabonese Republic, Muhammadu Buhari, President of Nigeria and Omar al-Bashir President of Sudan.

There was an impressive attendance of government leaders, heads of state, business investors and promoters, as well as heads of international organizations. There were 1500 delegates in total covering a variety of key sectors including energy, ICT, financial services, trade, agribusiness, pharmaceuticals and health.

What This Means for Egypt

With such an impressive turnout, Egypt is able to act as a catalyst for the continent. They have upwards of U.S. $8 Billion invested in Africa already and trade has risen by U.S. $5 billion. Al-Sisi is of course, looking for investment opportunities for Egypt but also to protect itself from the growth going on around them.

Ethiopia is constructing a damn on the Nile River which threatens Egypt’s water security- a resource pertinent to their agricultural economy, and one that, up until now, they were permitted unlimited access. The topic was discussed but the finer details remain unforeseen.

Ambassador Hazem Fahmy, head of the Egyptian Agency of Partnership for Development stated, “We have a lot of catching up to do, this is a start.

Investment Opportunities

The conference also aims to connect the other nations; it had provided at platform for further investment opportunities for countries in the region, the rest of Africa and even internationally. President Sisi is aiming heavily for investment in education; he said “Young people are the focus of economic and legislative reforms that will accelerate investment”, and that “Crossing into the future requires taking into account the advancement of technology and paving the way for generations that have the capability to face current challenges”.

There are large projects in both the public and private sector with huge investment opportunity. The conference itself attracted investors which led to negotiations on business plans and investments throughout the conference. For example, Ahmed Heikal, founder and chairman of Qalaa Holdings discussed the possibilities of investment in the East African Rift Valley Railways and U.S. $3.7 billion refinery project in Egypt. In addition, the Tripartite Free Trade Area and the Suez Canal Hub were topics of discussion. No specific figures were released but agreements in the sectors of health, infrastructure and information technology took place.

Increased communication and co-operation

It is no surprise that the consensus of the Africa 2016 Forum was further unified and shard goals when it comes to looking ahead into Africa’s future. It was agreed that there should be vital focus on human capacity and social development. The President of Equatorial Guinea, Teodoro Obiang Nguema pointed out the importance of integration between African countries, saying it is “the key point for our development”.

The policy makers need to work together with leaders and investors so they can see clearly the steps that need to be taken in order to optimize investment opportunity with current markets.

The African economy is growing and is expected to reach 5% in 2017, according to Akinwumi Ayodeji Adesina, President of the African Development Bank. Ethiopia’s growing economy is within the top 5 in the world and who’s Prime Minister stated at the conference “Today in our globalized world no country can achieve development in isolation”.

The result of the conference will hopefully not only break some of the national barriers and restrictions in Africa but also contribute to Africa’s presence within the Global Economy.

For the closing words, Hazem Fahmy, the Secretary General of the Egyptian Agency of Partnership for Development in the Ministry of Foreign Affairs said “One hand alone cannot clap”, showing the importance of the co-operation of African countries.

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Telecom Egypt net profit jumps 111% after tax changes

7 March 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Telecom Egypt reported a 111 percent jump in 2015 net profit after corporate tax changes, the state-owned landline monopoly said in a statement on Monday.

Net profit rose to 2.999 billion Egyptian pounds ($383 million) from 1.419 billion, it said.

The company said it was helped by a fall in the corporate income tax rate to 22.5 percent from 30 percent retroactively as of January 1, 2015, and changes to the taxation of dividends.

“Additionally the increase of income from investment by 35 percent year on year contributed positively to the bottom line,” the company said.

Revenue reached 12.184 billion pounds, up from 12.157 billion the previous year.

($1 = 7.8300 Egyptian pounds)

 

(Reporting by Ehab Farouk; writing by Asma Alsharif; editing by Jason Neely)

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Egypt’s Midor signs $1.2 billion loan agreement

23 February 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt’s state-owned Middle East Oil Refinery Company (Midor) has signed an initial loan agreement with three banks for $1.2 billion, the state news agency said on Tuesday.

The loan represents around 80 percent of the cost of its $1.4 billion Alexandria refinery lab expansion, while the remaining $230 million will be self-financed, Midor Chairman Mohamed Abdel Aziz said.

The agreement was signed by Abdel Aziz with the heads of a banking consortium that includes French banks Credit Agricole and BNP Paribas and Italy’s CDP.

The expansion at Midor aims to increase the company’s refining capacity to 160,000 barrels per day (bpd) from 100,000 bpd.

Egypt has struggled with soaring energy bills caused by high subsidies it provides on fuel for its population of more than 80 million.

 

(Reporting by Asma Alsharif; editing by Jason Neely)

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