AM — CBE responds to inflation with biggest rate hike since July 2017

Good morning, friends, and welcome to an absolutely packed Sunday issue. There are a number of new worries on our radar, but we’re not hitting the “Alaaaarm” button just yet in a re-enactment of Das Boot. To help you put things in context:

UH, SHOULD WE WORRY? #1- The past 24 hours has seen monkeypox push covid-19 off the front pages after the World Health Organization (WHO) announced what it called the “highly unusual” spread of the virus to countries in which it is rarely (if ever) found. The health body says 92 cases have so far been found in 12 countries, including the US, Canada and nine European countries. Some 50 other suspected cases of the rare viral infection, which can spread from animals to humans and between people, are being investigated, and “more cases are likely to be reported,” it said.

Egypt is (so far) in the clear: Egypt has not reported any infections of the disease, which is most common in remote areas in Central and West Africa, the Health Ministry said yesterday.

How worried should you be? You shouldn’t be quaking in your boots just yet, but you should be keeping an eye on it. Good news: There’s a vaccine. The smallpox vaccine is c. 85% effective against monkeypox. The bad news: Smallpox died out in the 1970s thanks to a concerted global vaccination drive, so anybody younger than about 50 has never been jabbed. The fatality rate is probably about 1% in poor populations in West Africa. Ed Yong won the Pulitzer for his work on covid-19 — go read his So, have you heard about monkeypox for a very balanced dive into what we do and don’t know.

UH, SHOULD WE WORRY? #2- US stocks are teetering on the edge of a bear market: The S&P 500 narrowly avoided entering a bear market thanks to last-minute gains during another volatile trading session on Friday. The index was down more than 2% in the afternoon, putting it down more than 20% from its all-time high in January, before a rally led it to close marginally in the green.

The Dow Jones is now on its longest losing streak since 1932 after ending last week lower for the eighth consecutive week. The S&P and the Nasdaq have now racked up seven straight weeks of losses — their longest run since 2001. Increasing concerns about an oncoming recession amid surging inflation and the biggest global tightening cycle in decades have wiped out USD 12 tn in value from US stocks since a recent peak in March as investors flee risk assets. (Bloomberg | WSJ)

A new phase? The sharp sell-off in retail shares and the bond rally on Wednesday has Mohamed El Erian worried that investors are becoming more pessimistic about earnings and economic growth. “Should these worries prove valid — and I suspect they will, given my expectations of a stagflationary baseline — stock prices remain vulnerable,” he writes for Bloomberg.

There is also a growing risk of a market malfunction, an event that would spillover into other areas of the financial markets and the real economy, El Erian writes. “While the hope is that this week’s market action is a continuation of a sell-off that is coming to its end, there is a real risk that it may be more than that — a new phase that threatens both more price losses and a higher possibility of market-functioning stress.”

When will it end? Morgan Stanley’s bearish analyst Michael Hartnett noted that, of the 19 US bear markets in the past 140 years, the S&P fell by an average of 37.3% over 9.5 months. This would put the index at 3,000 by the end of October if repeated. “3,600 is the new bull case,” he wrote in a note, which would put it down another 7.7% from its current level.

UH, SHOULD WE WORRY? #3- Remember how we told you folks were starting to freak out on Planet Startup USA? Well, the alarm bells are ringing rather loudly now after Y Combinator sent out a note to founders suggesting they get into nuclear-winter survival mode.

WHAT’S HAPPENING TODAY-

Davos 2022 starts today: The World Economic Forum (WEF) will kick off its first in-person annual meeting in more than two years today, bringing the world’s captains of industry, policy and media back to the alpine village in Switzerland. Expect plenty of talk about Ukraine (sans the you-know-whos), climate, food security, and the growing uncertainty over the global economy. “History at a turning point” indeed.

On Day #1: The first day of the event will see attendees chew over the global food crisis, the impact on the global economy of sanctions on Russia, and climate tech, as well as the future of globalization, national digital currencies and the effects of social media on societies. It will also see a special address from Ukrainian President Volodymyr Zelensky.

WEF runs through Thursday and you can check out the day-by-day agenda here, if you’re so inclined.

IN THE HOUSE TODAY- MPs will discuss today a committee report on proposed amendments to the Anti-Money Laundering Law. The changes would create an anti-money laundering unit at the central bank, handing it greater powers to prevent money laundering and terrorist financing. A new bill to organize Hajj trips will also be discussed by the House today.

We have two all-Egyptian finals tonight at the CIB-sponsored PSA squash championships: World #1 Nouran Gohar faces world #2 Nour El Sherbini for the women’s championship title while the men’s final match will see second seed Ali Farag play world #3 Mohamed El Shorbagy. The finals get underway this evening. The PSA has a good scene-setter here.

What’s at stake: The championship, which has been taking place at SODIC’s Club S Allegria and at the National Museum of Egyptian Civilization, has a record USD 550k in total player compensation for each of the women’s and men’s titles.

We don’t have long to wait before Egypt’s next squash tournament kicks off: The CIB-sponsored El Gouna International Squash Open 2022 starts this Friday and runs through to 3 June.

WATCH THIS SPACE- Changes at the Industrial Development Authority (IDA) designed to make life easier for investors are on the Trade and Industry Ministry’s to-do list, Minister Nevine Gamea said last week. The authority will work to simplify its procedures, aiming to attract more foreign investment into the industrial sector by making it easier for investors to acquire land and obtain licenses, among other things.

FROM THE DUMPSTER FIRE THAT IS OUR SOCIAL MEDIA-

• “I’ll be watching you”: We got a lot of enjoyment this morning from alternative search engine DuckDuckGo’s latest ad campaign. The ad takes a swipe at Google over privacy concerns, as a distinctly creepy dude in a Google shirt leans over people’s shoulders as they browse the web to the tune of The Police’s “Every Breath You Take.”
• The Freudian slip to end all Freudian slips, courtesy of Dubya.
• The “Solar Hedgehog”: Europe’s Solar Orbiter spacecraft just released its closest-ever image of the sun.

COVID WATCH-

Egypt saw an average of five new covid infections per day last week, the same reported cases a week earlier, according to Health Ministry data released yesterday. Egypt also saw daily average fatalities fall to two, down from three the week before. Almost 34.9 mn people are now fully vaccinated, and 3.1 mn have received their booster shots, according to the ministry.

OBITUARY-

Veteran actor Samir Sabry passed away at the age of 85 over the weekend following a battle with illness, the Actor’s Syndicate announced on Friday. Sabry starred in over 150 films and TV series and was best known for his roles in films including A Girl Among Girls (Bint Min el Banat) and Have Pity on Your Parents (Wa Belwaleden Ehsana). His last appearance was in the 2020 TV series Valentino.

CIRCLE YOUR CALENDAR-

Registration for this year’s Hajj through tourism companies closes tomorrow (Monday, 23 May) after the Tourism Ministry pushed the deadline from last Friday.

The Islamic Development Bank will hold its 2022 annual meetings in Sharm El Sheikh from 1-4 June under the slogan “post-pandemic recovery: resilience and sustainability,” according to a statement from the Planning Ministry. Several Egyptian ministries and representatives from the bank’s 57 member countries and other financial institutions are set to attend the meetings.

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

*** It’s What’s Next day: We have our weekly deep-dive into what makes and shapes pre-listed companies and startups in Egypt, the UAE and KSA, touching on investment trends, future sector insights and growth journeys.

In today’s issue: Do you feel your business needs an AI function? How would you get that started? In another of our virtual podcast roundtables, we sat down with the companies building AI systems in Egypt to get a bird’s eye view on what’s happening in the sector: Who’s adopting it, how they’re going about it, and what challenges they’re facing.

The Central Bank of Egypt (CBE) raised interest rates for the second time since March as it looks to rein-in inflation and attract foreign investors back to the local bond market. The central bank hiked rates by 200 basis points, bringing its deposit rate to 11.25% and the lending rate to 12.25%, the Monetary Policy Committee announced in a statement (pdf) after its regularly scheduled meeting on Thursday. The main operation and disc. rates also rose 200 bps to 11.75%. This is the CBE’s most aggressive hike since 2017, when it moved to curb inflation following the EGP float.

This was expected: All but one of the seven analysts we surveyed before the meeting expected the central bank to raise rates, with five of them predicting the hike to come in at up to 200 bps. Eighteen analysts polled by Reuters expected similar hikes, while Bloomberg’s poll also predicted a rise, though only one respondent called a 200 bps jump.

Rates are now 300 bps higher than where they were two months ago: The central bank raised rates by 100 bps and devalued the EGP by around 16% in an extraordinary meeting in March in response to growing pressure on the balance of payments caused by the war in Ukraine and global monetary tightening.

Inflation loomed large at the MPC meeting: Inflation hit its highest level since May 2019 last month as the recent surge in global commodity prices and the EGP devaluation caused price growth to accelerate faster than expected. “The MPC decided that raising policy rates is necessary to contain inflationary pressures which is consistent with achieving price stability over the medium term,” the CBE said. The central bank is currently targeting a 7% (± 2%) rate of inflation by 4Q 2022. Inflation came in at 13.1% in April.

The CBE doesn’t expect inflation to return to its target before 2023: “The elevated annual headline inflation rate will be temporarily tolerated relative to the CBE’s pre-announced target” before declining in 2023, the central bank said. Arqaam Capital’s Noaman Khalid told us that he had expected the CBE to amend its inflation target to 10%, but instead it has made it clear that the end of year inflation target will be missed, which is in line with Arqaam’s expectations of double-digit inflation at the end of the year.

Higher rates might not have an immediate impact: “Egypt is a cash-based economy, where movement in interest rates have proven weak in containing inflationary pressure,” Alia Mamdouh, head of macro at Beltone Financial, wrote in a note Thursday. “We reiterate our view that being a supply-driven inflation, EGP stability is key to support easing inflation rates.”

The CBE expects the economy to grow at a slower rate than expected “partially due to the unfavorable spillovers of international developments emanating from the Russo-Ukrainian war,” it said. The government last week cut its 2022-2023 growth forecast to 4.5% from 5.5%.

The EGP carry trade isn’t what it used to be: Almost USD 20 bn has exited Egypt since the start of the year as rising interest rates around the world, soaring inflation and the commodity price shock trigger a global risk-off in emerging-market assets. Egypt — which was once one of the most attractive carry trades in the world — has seen its real rates fall into negative territory on rising inflation. “We believe the CBE’s rationale for the aggressive hike in policy rates is mainly to maintain an upward yield curve to attract higher portfolio inflows,” Mamdouh wrote.

Will the hike be enough to rekindle inflows? “We expect the hike to partially filter through higher treasury yields to provide a more attractive real yield in comparison with emerging-market peers,” CI Capital’s Sara Saada wrote in a note. However, BNP Paribas MENA economist Mohamed Abdelmeguid said before the MPC meeting that policymakers would need to raise rates by another 300-400 bps before foreign investors return to EGP-denominated debt. And EFG Hermes’ Mohamed Abu Basha previously told Bloomberg that the current global environment makes it unlikely that foreign investors will return in large numbers.

Could this be the last rate hike we see from the CBE for a while? The jury’s out. “Inflation should remain range bound at around 13% for May. Unless we see sharp fluctuations in the currency, the [inflation] readings should remain at these levels, requiring no more rate hikes,” Naeem Brokerage’s Allen Sandeep told Enterprise, cautioning that the situation could change when new austerity measures come into effect in the fiscal year starting in July.

Some expect further hikes before the end of the year: We could be looking at another 100-200 bps hike towards 3Q 2022 or the final quarter of the year, Khalid told us. Capital Economics’ James Swanston is penciling in a 250 bps hike before the end of the year, Zawya writes, citing a note.

FinMin expects minimal damage to tourism revenues from Ukraine war: Egypt’s tourism revenues will more than double in FY 2021-2022 from a year earlier, according to figures announced by Finance Minister Mohamed Maait last week. The Finance Ministry is projecting revenues to reach USD 10-12 bn in the current fiscal year, up from USD 4.9 bn a year earlier, Maait said during a meeting with US investment banks in London at the weekend, according to a statement by the ministry.

No Ukrainian + Russian tourists, no problem? The forecast suggests that the ministry doesn’t expect the loss of Russian and Ukrainian tourists to make a huge impact on revenues, despite the countries accounting for more than 30% of all arrivals prior to the war. The sector brought in USD 5.8 bn during the first half of the current fiscal year. The government is yet to release figures for 3Q 2021-2022, so it’s not clear how the conflict has impacted revenues or how successful the government’s attempts at luring tourists from other markets have been. We expect breaking into new markets to take time.

Remittances from Egyptian expats will also rise this year: The government expects remittances to rise to USD 32.5 bn by the end of the fiscal year, Maait said. This would be a 3.5% increase from the USD 31.4 bn worth of inflows from which Egypt benefitted last year.

Egypt was one of the biggest recipients of remittances in 2021: Some USD 31.5 bn was sent to Egypt in calendar year 2021, making us the fifth-largest recipient of remittances in the world. The World Bank expects receipts to rise 8% this calendar year, which would put the figure at around USD 34.8 bn, according to our calculations.

Gov’t outlines climate strategy: The Madbouly government launched its new national climate strategy at a press conference on Thursday (watch, runtime: 12:27) as it gears up to host the COP27 climate summit in Sharm El Sheikh in November. The strategy feeds into the state’s Vision 2030 sustainable development plan and aims to reduce harmful emissions and prepare the country to withstand the impact of a warming climate, Prime Minister Moustafa Madbouly said in his speech at the strategy’s launch, according to a cabinet statement.

The strategy at a glance: While the details of the strategy have not yet been released, the government laid out its five key goals in broad strokes at Thursday’s launch — and in a document (pdf) released earlier by the Environment Ministry. They are:

• Achieving sustainable growth while reducing emissions;
• Building resilience and adaptability to climate change;
• Improving governance and assigning roles to various bodies to help mitigate the impacts of climate change across sectors;
• Improving financial infrastructure to pay for climate projects;
• Strengthening scientific research and technology transfer, and spreading awareness about climate change.

Why we need this: Despite producing no more than 0.6% of the world’s total emissions, we are among the most vulnerable to the impacts of climate change on our coasts, water resources, health, population, and infrastructure, Madbouly said.

Long-term spending targets: The government wants to spend USD 211 bn on mitigation and USD 113 bn on adaptation by 2050. The money will be deployed in key sectors including energy, transport, agriculture, and water.

Where will the money come from? Environment Minister Yasmine Fouad suggested at the presser it will be a combination of private investment, funding through the state budget, and contributions from developed economies. The government didn’t break down where the money will be spent or a roadmap for how it plans to pay for it all.

Other aims: The strategy will also focus on upping new and renewable energy projects, maximizing energy efficiency, and adopting methods for sustainable production and consumption, Fouad said, adding that the government will also look to earmark funding for women-led climate change projects.

The strategy lines up neatly with our COP priorities: The government has repeatedly pointed to mitigation, adaptation, and securing finance from developed nations and private-sector players to help developing countries (especially in Africa) combat climate change as being the key focus for this year’s summit.

But we’ve seen no hard targets yet: The government did not unveil any new national targets to reduce greenhouse emissions at Thursday’s launch. Egypt will in the coming weeks announce its revised nationally determined contribution (NDC) where it will commit to new emissions targets. The last NDC we submitted was in 2017 and it did not include binding targets for specific emissions reductions.

We already have a renewables target: The government has set an ambitious goal of seeing 42% of the country’s electricity generated from renewable sources by 2035, up from around 10% currently.

IN OTHER GREEN ECONOMY NEWS-

SCZone to sign green fuel agreements on the sidelines of COP27: The Suez Canal Economic Zone (SCZone) will sign final agreements at COP27 on the USD 10 bn of Ain Sokhna green fuel projects it has lined up with international companies, SCZone chairman Yehia Zaki said, according to a statement.

MEANWHILE- The European Investment Bank (EIB) could invest in desalination projects in Egypt, official news agency MENA quoted EIB consultant Walid Salim as saying. No further details were provided.

Ukraine has offered to send Egypt wheat cargoes through Poland via rail, state news agency MENA quoted Supply Minister Ali El Moselhy as saying on Thursday. Some 300k tons of wheat booked for February and March delivery for Egypt are currently stranded in Ukrainian ports due to Russia’s blockade of shipments from the country. One cargo is still stuck in port while four others are yet to be loaded.

We’re expecting a visit from Polish President Andrzej Duda next month to coordinate wheat shipments from Ukraine: The Polish president is expected to coordinate ways to ship Ukrainian wheat to Egypt amid the war, including potentially through Polish seaports, Duda said earlier this month. Both Poland and Lithuania have reportedly been in talks with Ukraine about exporting its summer grain harvest through their ports. The same offer could also be made for exports of sunflower oil, Duda said at the time.

GASC isn’t letting contractors off the hook: State grain buyer GASC has granted an extension to secure the Ukrainian shipments, which were purchased before Russia invaded Ukraine and blockaded its ports. However, GASC is not planning to release traders from fulfilling the shipments due to force majeure (unforeseeable circumstances) — and may require that traders source the four unloaded cargoes from other countries if they can’t be moved out of Ukraine.

Will we put our wheat concerns to Russia? Foreign Minister Sameh Shoukry agreed with his Ukrainian counterpart Dmytro Kuleba to “coordinate efforts to make Russia unblock Ukraine’s food exports,” Keleba wrote in a tweet after the two top diplomats shared a phone call last week. He also thanked Egypt for turning away a Russian ship that was loaded with allegedly stolen Ukrainian wheat after it failed to present the proper paperwork.

REMEMBER- Both Ukraine and Russia are good friends of Egypt, and both are key suppliers of wheat, together accounting for more than 80% of our imports of the grain before the war. We’ve continued to import wheat from Russia since the outbreak of the war, importing some 479k tons of Russian wheat in March — 24% more than in the same month last year.

The 61.5k-ton wheat shipment from India reportedly set sail from the country last week, according to the Hindustan Times, citing an unnamed Indian government official. It is unclear whether this is the same 55k-ton shipment — our first from the country — that had already passed the inspection of Egyptian officials. This comes a week after India banned wheat exports to all except “vulnerable countries” that have permission from New Delhi.

At least a dozen countries have applied for an exemption to India’s wheat ban, the Indian news outlet said. Egypt is already in talks with the country over securing its own exemption. Supply Minister Ali El Moselhy said last week that an agreement to buy 500k tons of Indian wheat will not be impacted by the ban, but clarified later that the purchase has been agreed but not signed.

ON THE NOT-SO-GOOD NEWS FRONT- Processed cooking oil prices officially rose 20% over prices set during Ramadan as of 15 May, following a meeting the Supply Ministry held with cooking oil companies, state-run MENA agency wrote. The selling prices for pure corn and sunflower oil also rose 30-35%. El Moselhy said the price hike came in a bid to help oil producers and ensure none of them need to cut down production or cut back on staff amid the rise of global prices on the back of the war.

The edible oils market has been reeling from the war in Ukraine, which prior to Russia’s invasion was the world’s top exporter of seed oils and the global number one producer of sunflower oil. The rise of sunflower oil prices on the back of the war hit Egypt particularly hard, as it imports more than half of its sunflower oil from Ukraine in 2020, according to the most recent data.

EBank gets USD 25 mn from EBRD for on-lending to SMEs + women-led businesses: The Export Development Bank of Egypt (EBank) is receiving USD 25 mn financing package from the European Bank for Reconstruction and Development (EBRD) for on-lending to SMEs, the European lender said Thursday. The package includes an “uncommitted multi-currency trade and facilitation program limit of up to USD 10 mn,” which will be geared towards trade finance, including pre-export and post-import financing and funding to distribute imported goods. EBank is also receiving two senior unsecured loans worth a combined total of up to USD 15 mn, including USD 5 mn as part of the EBRD’s Women in Business Program, for the bank to on-lend to women-led SMEs in the country. The remaining USD 10 mn loan is earmarked for on-lending to SMEs with “limited access to finance.”

The final contracts for plans to ship natural gas to Lebanon via the Arab Gas Pipeline are expected to be signed “soon,” according to a Lebanese cabinet statement. The Lebanese government is set to coordinate with Egypt’s Oil Ministry this week over final terms for the gas imports, he added. Technical agreements on the plan have been finalized and the two sides are currently awaiting a financing agreement with the World Bank, and further assurance from the US that the move will not run afoul of sanctions against Syria, Oil Minister Tarek El Molla said last week (watch, runtime: 11:49).

Background: Egypt last year agreed to export natural gas to Lebanon by reviving the dormant Arab Gas Pipeline running through Jordan and Syria, to help relieve the country’s dire fuel shortage.

Orascom Construction’s (OC) net income slid 45% in 1Q 2022 due to deepening losses at Besix, according to its earnings release (pdf). The construction giant reported a USD 13.1 mn profit in the January-March quarter, down from USD 23.9 mn last year, as Belgium-based construction group’s losses widened to USD 11.0 mn from USD 1.4 mn in 1Q 2021.

Excluding Besix: Orascom reported a USD 24.1 mn profit for the quarter, down almost 5% y-o-y, reflecting a “positive contribution from all of our operating businesses,” CEO Osama Bishai said. Revenues for the period grew 20% y-o-y to USD 979.7 mn.

OC’s consolidated backlog rose more than 2% to USD 5.5 bn, with new awards dropping 7% y-o-y to USD 617.5 mn. Egypt accounted for two-thirds of the company’s backlog, followed by the US (25%) and Saudi Arabia (2%). Besix’s standalone backlog rose almost 8% y-o-y to a record USD 5.0 bn, “an encouraging level that should provide a path to sustained profitability,” said OC CEO Osama Bishai. Pro forma backlog including OC’s share in Besix rose 2% y-o-y to record USD 8.3 bn.

Orascom is proposing to pay out USD 27 mn dividends in 3Q 2022, equal to USD 0.2313 per share.

What they said: “This backlog is in-line with the level achieved a year earlier despite the devaluation of the EGP. Such resilience is supported by our high-profile infrastructure projects in Egypt that are denominated in foreign currency alongside our projects in other markets in the Middle East, Africa, and the United States,” Bishai said.

Madinet Nasr Housing and Development’s (MNHD) consolidated net income rose 4% y-o-y in 1Q 2022 to EGP 120.2 mn, according to the company’s earnings release (pdf). The developer’s revenues jumped 82% y-o-y to EGP 818.4 mn during the quarter.

MNHD’s gross contracted sales more than doubled to EGP 1.56 bn during the quarter with its mixed-use development Sarai accounting for more than half of the quarter’s contracted sales value. The company sold a total of 553 residential units during the January-March period, up 86% y-o-y, with Sarai comprising 56% of units sold. Deliveries rose 81% y-o-y to 361 units, including 176 units in Taj City, 174 in Sarai, and 11 at its subsidized housing project Nasr Gardens.

Looking ahead: The company is looking to double down on the commercial property market as a “major plank” of its strategy to “give less focus to sales of raw land parcels and … leverage its reach and knowhow in real estate development,” CEO Abdallah Sallam said. MNHD is also looking into setting up a “full-fledged commercial leasing business” and expand its work in co-developments of (and joint ventures in) non-residential projects.

MNHD’s earnings go deep on strategy and offer new detail on the company’s operational and financial performance.

GB Auto’s net income slid 23% y-o-y in 1Q 2022 to EGP 229.4 mn, the company said in its latest earnings release (pdf), blaming an EGP 211 mn foreign exchange loss following the EGP devaluation in March. Revenues rose 15% y-o-y during the quarter to EGP 7.8 bn.

In detail: Revenues from the auto and auto-related segment grew 12% y-o-y in 1Q to EGP 6.1 bn. GB Capital reported revenues of nearly EGP 2.0 bn, up 15% y-o-y.

Looking ahead: “While the current state of the global business environment is uncertain

and poses some operational challenges, we are confident that our strategies and business fundamentals will carry us forward through the challenging times,” CEO Nader Ghabbour said. The company will continue monitoring the impact of macroeconomic developments including the EGP devaluation and global inflationary pressures on consumer purchasing power, he added.

Presidential spokesperson Bassam Rady has been appointed Egypt’s ambassador to Italy, state-owned breaking news site Ahram Gate reports. Rady will replace Alaa Roshdi, who passed away in January. Ittihadiya has not yet named a spokesperson to take Rady’s place.

Assem Mohamed Hanafi Mahmoud was appointed ambassador to China, according to Ahram Gate. He will succeed the current ambassador to Beijjing, Mohamed El Badry.

Sherif Mahmoud Issa is our new ambassador to the UAE. Issa has formerly served as our envoy to South Africa and Botswana. He succeeds Sherif Al Bedewi.

Leading the airwaves last night: The inauguration of a 1.5-mn-feddan agricultural project dubbed “Egypt’s Future” dominated the airwaves at home, with the project getting the most focus by Ala Mas’ouleety (watch, runtime: 11:44), Kelma Akhira (watch, runtime: 1:30) and others. The project, which aims to boost local production, would see the cultivation of wheat, corn and other crops. President Abdel Fattah El Sisi inaugurated the project.

The project will allow for partnerships between the government and the private sector, Agriculture Ministry spokesman Mohamed El Kersh told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 3:12). “It’s necessary that there are partnerships with the private sector. The New Delta agricultural project is one seeing joint work by the private and public sector,” he said.

Also on the airwaves last night:

• The removal of Egypt’s Gama’a Al Islamiyya and four other extremist groups off the US’s list of foreign terrorist organizations. (El Hekaya | watch, runtime: 6:28)
• Rare monkeypox outbreaks in 12 countries and the World Health Organization’s recent meeting to discuss the recent spread of the viral infection. (Masaa DMC | watch, runtime: 5:32)

Enterprise is heading to the other side of the continent for a little visit: A couple of hours after we hit “send” on this morning’s issue, one of us will be leaving on a jet plane to Lagos, Nigeria, with our friend Aly Shalakany, CEO of the Cairo Angels Syndicate Fund (CASF) to explore one of Africa’s biggest startup hubs. We’ll be joined by Nawah Scientific CEO and founder Omar Shoukry (check out his morning routine here) and Adham Azzam, COO and co-founder of fintech player Lnddo.

Why are we heading to Nigeria? To meet interesting startups, angel investors and VCs in the capital of Africa’s largest consumer market (there are roughly two Nigerians for every one of us). Big thanks to Nigerian entrepreneur support organization TVC Labs, our guides to Nigeria, and in particular to collaborator-in-chief Tomi Davies (LinkedIn), who was kind enough to help plan the trip and set up the meetings with the country’s top entrepreneurs and professionals.

What makes Nigeria so interesting? Nigerian startups raised a total of USD 1.8 bn last year, topping all African countries (including Egypt, which came third with USD 652 mn), according to a report by investment platform Partech. Nigeria’s number is equivalent to 34% of all African equity funding for startups.

Snapshot of Nigeria: The official currency is the NGN. EGP 1 is almost NGN 23. The country of 206 mn people boasts a GDP of over USD 432 bn, according to the World Bank’s 2021 figures. We’re expected to be welcomed by hot, rainy weather (the kind that confuses someone with Egyptian-German roots — we’ve packed the whole closet) and are sure we’ll feel right at home, based on what we’ve read about the city’s traffic.

What we’re looking forward to: Meetings with Nigerian fintech and logistics startups, as well as local angel investors, VCs, and a pan-Africa fund. And we’re definitely excited to dive into the country’s bustle, tastes, smells, and sounds along the way, so stay tuned for daily updates the rest of this week. Then, in June, we’ll have a series of stories on what’s happening in Nigeria that local startups need to know about.

Leading the conversation on Egypt in the international press: Continuing coverage of imprisoned activist Alaa Abdel Fattah, who is asking for a judge to investigate the complaints he and his family have filed over his detention, to be allowed British consular visits, and to communicate with UK lawyers as a witness to “crimes against humanity” during his time in prison, his aunt, the novelist Ahdaf Souief, said in a tweet after visiting him. Abdel Fattah gained UK citizenship in mid-April and remains on a hunger strike after being transferred from Tora Prison to better conditions at Wadi Natroun correctional facility. The story is making headlines in the Washington Post and the Financial Times.