AM — Lots of love from South Korea + 40% of adults in Egypt are fully jabbed

Good morning, wonderful people, and welcome to an unusually busy Monday morning on the news front, where the big story of the day is the upcoming visit of South Korean President Moon Jae-in.

Moon is due in town from Wednesday to Friday, the first visit to Egypt by a South Korean president in 16 years. Moon will meet with President Abdel Fattah El Sisi during a regional tour that will also see him swing through the UAE and Saudi Arabia. South Korea is a major player in our economy, with companies working on everything from infrastructure to heavy industry and renewables — to say nothing of giving many of us daily hits of dopamine through Samsung-made handsets. We have more in this morning’s news well, below.

WHAT’S HAPPENING TODAY-

The Senate is holding a second and final day of plenary sessions to finish discussing a bill that would create a new Labor Act regulating the private sector, to which it gave a preliminary thumbs up earlier this month, Al Borsa reports. The Senate will then pass the legislation back to the House of Representatives for final approval. If passed, the bill could change how private sector employees can be dismissed, making it harder for employers to fire staff for illnesses but allowing workers to lose their jobs if convicted of a felony. The bill would also set a minimum annual raise requirement equal to 3% of the employee’s wage amount covered by social ins, according to local media. Public sector employment is governed by a separate law.

NO COMMENT- The Senate has voted down a proposal by an MP that would have seen the draft Labor Act allow fathers to take a week’s paternity leave during the six months after a baby’s birth.

The World Future Energy Summit kicks off today in Abu Dhabi. The three-day summit will bring together leaders in the renewable energy industry as part of the Masdar-hosted Abu Dhabi Sustainability Week.

The World Art Forum is ongoing at Cairo’s National Museum of Egyptian Civilization until Wednesday, 19 January. The inaugural edition of the forum, which kicked off yesterday, will see artists from around the world participating.

THE BIG STORY ABROAD- The US media is awash with stories on the different ways that omicron is hitting the country. Here’s a snapshot:

• The omicron outbreak shows no signs of peaking, leaving the country with “a tough few weeks ahead,” the US surgeon general has said. (Bloomberg)
• Small businesses are feeling the pinch as the variant prolongs supply chain problems, fuels labor shortages, and hits footfall. (Reuters)
• Lobbyists are calling for more covid support: Businesses are calling on lawmakers to provide bns of USD in fresh relief to help them through the omicron wave. (Wall Street Journal)
• Adding to supply chain disruption: New lockdowns in China and unrest among dockworkers on the US West Coast has analysts fearing the worst for supply chains and inflation. (Washington Post | New York Times)

CIRCLE YOUR CALENDAR-

Applications are open until 31 March to join the Femtech Accelerator Program run by Flat6Labs and women’s healthcare firm Organon. The four-month-long virtual accelerator will support female-led digital healthcare start-ups operating in MENA to build products, test market fit and improve business models. You can register at this link.

Consoleya will kick off its Startup Meet-up series tomorrow with a talk from Ayman Ashour, founder and principal at Newton International Management. The talk, titled Exits and Reset Dilemmas, will see Ashour discuss how to plan for your startup’s exit and the connections you’ll need along the way. Our friend Hossam Allam from Cairo Angels will moderate the discussion. The event will take place from 6-9pm — you can register using this link.

National flag carrier EgyptAir will operate a flight from Casablanca to Cairo this Wednesday, 19 January, to bring home Egyptian expats stranded in Morocco following border closures.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: What’s standing in the way of Egyptian researchers reaching their full academic potential? A lack of funding, problems sourcing equipment, and the absence of private sector firms to help plug the gaps, researchers tell us.

Suez Canal revenues are expected to hit USD 7 bn in 2022, up 11.1% from last year, Suez Canal Authority (SCA) boss Osama Rabie said in an interview with Bloomberg Asharq yesterday on the sidelines of Dubai’s Expo 2020 (watch, runtime: 6:25). Canal revenues hit a record USD 6.3 bn in 2021, up 12.2% from the year before, on the back of an all-time high net tonnage transiting the canal amid a 10% increase in the number of passing ships.

Transit volumes are set to beat 2020’s record — despite fee increases — as ship-makers build more vessels, Rabie said. Most ships are set to pay a 6% increase in canal transit fees from February. LNG carriers and cruise ships are exempt from the fee hike, which was announced in November as the authority starts to wind down a range of incentives and reductions introduced in 2020 to counter the global trade slowdown due to covid-19.

The SCA is looking to complete work on widening and deepening the canal by July 2023, Rabie said earlier on Sunday, according to Reuters. The expansion, which was first announced in May last year, will take place right where the 400-meter-long Ever Given container ship ran aground for six days in March 2021, disrupting 10-15% of global shipping and costing us some USD 15 mn each day in foregone revenues.

Green incentives in the works: Ships that use greener forms of fuel could see a 10-20% discount on canal fees, Rabie said, adding that studies on the scheme are ongoing. The authority will announce plans to become a “green canal” by 2030 at the COP27 UN climate conference in Sharm El-Sheikh in November, he added.

And green hydrogen projects could be housed in the SCZone: An announcement is also expected on green hydrogen projects in the Suez Canal Economic Zone (SCZone) ahead of COP27, SCZone head Yehia Zaki said in a separate interview with Bloomberg Asharq in Dubai yesterday (watch, runtime: 3:47).

Hungary could enter the SCZone: The Suez Canal Economic Zone (SCZone) is in talks with Hungary over potential investment in a specialized industrial area in the zone, Zaki said. A Hungarian delegation is set to visit mid-February to continue the talks. The authority is also in early talks with several other countries and companies over industrial areas, he added, without disclosing further details. Russia is already setting up shop in the SCZone, with financing to start on construction of its Russian Industrial Zone (RIZ) next year.

Catering and marine services are also in the works: The SCZone is also currently reviewing bids from companies under plans to launch ship catering and marine services in the next few months as part of its 2020-2050 strategy, Zaki announced, according to another SCA statement.

South Korea will provide a USD 1 bn soft loan to Egypt, the country’s ambassador to Cairo, Hong Jin-wook (Twitter), said at a press conference yesterday, according to Al Mal. Moon did not provide details about what the money will be used for or speak on when it could be disbursed.

The presser comes ahead of South Korean President Moon Jae-in’s visit to Egypt: Moon will be in Cairo from Wednesday until Friday for talks with President Abdel Fattah El Sisi. Talks will be held with the aim of signing a trade agreement between the two countries during the visit, Ahram Gate reported Hong as saying. Cooperation on EVs, water desalination, green hydrogen and renewables are among the other top priorities for discussion, Hong reportedly said.

Also from Hong:

• South Korea eyes Dabaa: Moon will reportedly discuss South Korean participation in the construction of the Dabaa nuclear plant with El Sisi this week. Korea Hydro & Nuclear Power could work on the construction of the Rosatom-built Dabaa nuclear plant after reaching an early agreement earlier this month with the Russian state company. Korean media reported in October that Seoul had offered to provide “technical support” for the project, without providing details.
• Hyundai wants to expand its footprint in the SCZone: Manufacturing giant Hyundai Rotem is reportedly in talks with an undisclosed Egyptian company to establish a “production plant” in the Suez Canal Economic Zone, he said, without providing further information. Hyundai already has projects lined up in the SCZone having agreed to work with the National Egyptian Railway Industries Company to produce railcars. Hyundai Rotem could also develop a Luxor-Aswan railway line, having already agreed to upgrade the 118 km Naga Hammadi-Luxor line last year.

Korean auto firm set to sign agreement on locally assembled EV microbuses this week: State-owned Engineering Automotive Manufacturing Company (EAMCO) is set to sign a cooperation agreement with South Korean auto parts maker Myoung Shin to locally produce electric microbuses “by the end of the week,” Hapi Journal quotes Public Enterprise Minister Hisham Tawfik as saying in its print edition. The signing is set to coincide with South Korean President Moon Jae-in’s visit to Cairo from Wednesday to Friday, Tawfik is reported as saying.

Myoung Shin will work with local firm BrightSkies on the EV microbuses, Tawfik is quoted as saying. The Korean firm will produce the bus’ chassis, while BrightSkies will cooperate with EAMCO to supply the control systems, power units and engines under an agreement signed in November. The ministry at the time said that the 80% locally sourced microbuses were set to be prototyped within a year.

Our search for a new EV partner is also on track: The government is still in “advanced” talks with two Chinese companies to partner with El Nasr Automotive to locally produce electric cars, Tawfik added. Negotiations with Chinese auto firm Dongfeng to locally assemble its E70 cars collapsed in November. The minister said earlier this month that El Nasr had narrowed down its list of possible partners to two from seven.

Details are being finalized on component prices — the point on which El Nasr and Dongfeng failed to find agreement — as well as the EVs’ target selling price, factoring in production and marketing costs. The partnership will be announced as soon as one of the Chinese companies agrees to all the government’s terms in writing, Tawfik said, without disclosing an expected timeline. If both companies sign off on the conditions, the government would pick the best firm, Tawfik said. Earlier this month, he said final contracts could be signed by March.

Egypt plans to see its first locally assembled EV in 2023, President Abdel Fattah El Sisi said in an address to the World Youth Forum last week. The government will invest at least EGP 450 mn to roll out the infrastructure required to make EVs viable on Egyptian roads, led by industry leader Infinity, which will set up 6k electric vehicle charging points across 3k stations nationwide.

EGP 30 bn has been earmarked to develop state-owned oil companies in the FY2022-2023 budget, Oil Minister Tarek El Molla said, according to a ministry statement, adding that the figure is the highest ever allocated. To our knowledge, the ministry has not disclosed total spending on state-owned oil companies in previous years.

Could some of that go to greening the industry? Bringing the industry in line with environmental standards is of the utmost importance, El Molla said. We’re expecting some big announcements on green hydrogen and carbon capture projects ahead of COP27 in November: The government is soon to enlist a foreign consultancy to put together a 12-month strategy to develop the green hydrogen industry, while the Oil Ministry and Eni will announce joint initiatives on carbon capture at the global climate summit in Sharm El Sheikh.

The budget comes on the heels of major exploration + production agreements: At the start of the year, seven international energy companies were awarded eight of the 24 oil and gas exploration blocks included in the government’s latest bid round held. Meanwhile, Eni last month committed to invest a minimum USD 1 bn on exploration and extraction in the Gulf of Suez and Nile Delta regions, while the Oil Ministry also inked a new USD 3.5 bn, 20-year production agreement with Apache-Sinopec JV.

Next steps for the state budget: The Finance Ministry plans to begin public consultations on the FY2022-2023 budget and the government’s strategic targets this month, ahead of shipping the draft bill to the House of Representatives for discussion and approval.

Afreximbank sets up pan-African payment system to spur intra-continental trade: African economies could save more than USD 5 bn per year in transaction costs thanks to a new platform from the African Export-Import Bank (Afreximbank), Ghanaian President Nana Akufo-Addo said at the platform’s launch, according to an Afreximbank statement. The Pan-African Payment and Settlement System (PAPSS) platform is meant to boost trade by facilitating cross-border payments in the African Union’s Continental Free Trade Area (AfCFTA).

What does PAPSS do? Under the new system, Afreximbank will provide settlement guarantees and overdraft facilities to settlement agents. The goal is to cut the cost and speed of cross-border payments, lower liquidity requirements for commercial banks on the payments front, and strengthen oversight by central banks.

Next steps: President Akufo-Addo called on all central banks in Africa to sign up to the scheme.

IN OTHER AFREXIMBANK NEWS- African nations to get EUR 150 mn for vaccine, sustainable projects: The French Development Agency (AFD) and African Export-Import Bank (Afreximbank) have signed a EUR 150 mn framework of intent to support the African Vaccine Acquisition Trust (AVAT) with purchase backing and payment plans for state vaccine purchases, according to a statement.

VACCINE UPDATE- Almost 40% of Egyptians aged over 18 are now fully vaccinated, interim health minister Khaled Abdel Ghaffar said in a presser yesterday, according to Youm7. Some 23.6 mn people have now received two shots of a covid-19 vaccine, while another 12.8 mn have received their first dose.

The Madbouly government has done a very solid job managing the rollout of vaccines — with plenty of help from our friends in the international community, who have been generous with donations of jabs. Remember that a year ago today, we still had no clarity on when Egypt’s vaccination program would launch, with then-Health Minister Hala Zayed having said in mid-January that Egypt was still hoping to start the vaccine rollout in March.

Some 500k booster shots have so far been handed to priority individuals, Prime Minister Moustafa Madbouly said yesterday. The government began rolling out its booster programme in December, contacting senior citizens, people with chronic medical conditions, medical staff, and people who were vaccinated more than six months ago. The Health Ministry is aiming to administer 23 mn booster shots by 1H2022.

Around 206k vaccines have been given to older children aged 12-15 and 1.4 mn doses to teenagers aged 15-17, the prime minister said, without specifying how many have been fully vaccinated.

We received 3 mn Pfizer jabs from the US yesterday as part of the World Health Organization’s Gavi / Covax program, announced Health Minister Khaled Abdel Ghaffar.

Our shipment comes as the Gavi / Covax program has delivered 1 bn covid-19 vaccines to 144 countries, marking a “key milestone in the largest and most rapid global vaccine rollout in history," said Seth Berkley, CEO of Gavi. Covax began delivering jabs in February 2021 to 144 countries including Egypt, which signed an agreement to receive 40 mn vaccine doses through the initiative in 2021.

The Health Ministry reported 1,197 new covid-19 infections yesterday, up from 1,101 the day before. Egypt has now disclosed a total of 400,076 confirmed cases of covid-19. The ministry also reported 25 new deaths, bringing the country’s total death toll to 22,148.

The Egyptian Drug Authority (EDA) has approved AstraZeneca’s Evusheld — a preventative covid-19 antibody cocktail — for emergency use, Youm7 reported. This comes a month after Egypt’s Authority for Unified Procurement signed an agreement with AstraZeneca to procure its med, which can be used to prevent infection in individuals with weak immune systems for whom vaccines are not sufficient. Health Ministry spokesperson Hossam Abdel Ghaffar had recently said our first shipment of pills is expected this month. We’re also expecting a shipment of Pfizer’s covid pill, Paxlovid, sometime this month, after we signed an agreement with the pharma giant to provide pills that could treat some 20k people.

Madbouly talks GERD, the military economy + Egyptian-US relations in rare BBC interview: In a wide-ranging interview, Prime Minister Moustafa Madbouly sat down with BBC Arabic’s Nouran Sallam to discuss the ongoing dispute with Ethiopia over the Grand Ethiopian Renaissance Dam (GERD), the military’s role in the economy, and his government’s relationship with the Biden administration (watch, runtime: 24:28).

On GERD: Egypt is not against development anywhere in the Nile basin, but will not accept actions taken by Ethiopia that could restrict our nation’s access to the Nile’s water, the prime minister said. He reiterated the government’s position that Egypt, Ethiopia and Sudan need to reach a binding agreement over how the hydropower dam will be filled and operated before Addis Ababa fills its reservoir. Ethiopia announced over the weekend that it will begin clearing forests adjacent to the dam next month in preparation for the third filling, which it intends to complete this summer.

On the private sector + the military economy: Madbouly denied that the army is crowding out the private sector, saying instead that the Egyptian economy is dependent on private companies for growth. He brought up the government’s plans to list several military-owned firms on the EGX. The Sovereign Fund of Egypt said last month that it is close to finishing the restructure of bottled water brand Safi and Wataniya Petroleum, which are both owned by the army’s National Service Projects Organization.

(President Abdel Fattah El Sisi sounded a similar note yesterday in remarks at the state-owned Kima complex. State-owned Ahram Online quotes El Sisi as having said “The private sector is welcome to contribute in new projects and factories. I repeat [my invitation] for the fourth time. We need the private sector. We have been proven incompetent in management [of state-owned companies] in the last 40 years.”)

On Egyptian-US relations: The PM said there has been no chill in relations between Cairo and Washington since the Biden administration came into office last year. The strategic partnership remains intact and both countries are committed to strengthening the relationship, he said.

It’s a light morning in the foreign press: The New York Times notes the recent performance ban placed on 19 mahraganat singers by the Musicians’ Syndicate, framing it as a “battle” between “Egypt’s cultural establishment” and a “renegade musical genre.” Meanwhile, Xinhua covers a beauty contest for Egyptian Arabian horses in Sharqia over the weekend.

Egypt’s pharma exports rose 30% y-o-y in 2021 to USD 685 mn in 2021, local media reported citing figures from the Export Council for Medical Industries. Cosmetics exports were up 39% y-o-y to record USD 311 mn in 2021, while medical and veterinary meds exports increased by around 30% to USD 277 mn. December alone saw a 44% y-o-y increase in total pharma exports, recording USD 83 mn.

Edita Food Industries is expanding its Freska brand with the launch of Freska Choco Sticks, according to a statement (pdf). The new product will retail at EGP 3 per pack, with each pack containing two sticks. The product launch comes as part of the company’s revenue diversification strategy and its plan to expand its 15% market share in the wafer segment, which is its fastest-growing line of business.

Other things we’re keeping an eye on this morning:

• Egyptian citrus exports to the Netherlands are facing tighter restrictions after Dutch authorities published new rules banning the import of fruits with necks exceeding 2mm. Egypt has appealed to the European Commission and the Dutch government in a bid to reverse the decision.
• Axa Egypt has signed a five-year bancassurance agreement with the Arab African International Bank that will see Axa offer ins. services to the bank’s customers.
• The Customs Authority has issued new instructions (pdf) for importers to register the return of goods that had originally been exported through the Advance Cargo Information system.

• Spanish flag carrier Iberia has begun operating direct charter flights between Madrid and Luxor, which will run until the end of the winter season.
• Kima is in talks for a USD 250 mn loan to establish an environmentally-friendly factory as an alternative to one of its obsolete factories in Aswan.

US moves to assuage Lebanon’s concern over pipeline sanctions: The US ambassador to Lebanon has told the country it should not fear punitive measures from the US for receiving natural gas from a pipeline running through Syria, according to a Lebanese Cabinet statement. Lebanon will be importing gas from Egypt via the pipeline through Jordan and Syria, but on Sunday denied reports that it would also receive shipped Israeli gas imports. The upgrade of the Arab Gas Pipeline to begin to export natural gas to Lebanon amidst their electricity crisis is expected to be ready early this year.

On the airwaves: Lebanese Energy Minister Walid Fayyad denied reports in Israeli media that Beirut had agreed to purchase gas from Israel, stressing that it is Egypt that will be the provider. Speaking to Hadeeth Al Kahera last night, the minister said he expects contracts to be signed with the Egyptian government within the next two months (watch, runtime: 3:17).

Also worth knowing this morning:

• Police forces clashed with protestors in Tunisia demonstrating against President Kais Saied’s decision to suspend the country’s parliament and grant himself wider powers. (Reuters)
• Afghanistan’s currency crisis is leaving mns under threat of starvation. The currency has plummeted by about a quarter since the Taliban took power last year. (Financial Times)