Your 2017-18 budget preview
Plus: The bond market suggests Egypt deserves a credit upgrade

President Abdel Fattah El Sisi finished his trip to the GCC after flying to Bahrain yesterday for a series of talks with King Hamad bin Isa Al-Khalifa. El Sisi’s trip to Bahrain followed a two-day official visit to Kuwait, where he met Kuwait’s Emir Sabah Al-Ahmed Al-Sabah and other top officials, according to Ahram Online (here and here).

The House of Representatives is expected to vote today on the 10% hardship raise for state employees not covered under the Civil Service Act after failing to bring the measure to a vote once more yesterday, Al Mal says. MPs are trying to push the government into agreeing to give the raise as a percentage of employees’ base salary rather than in a specific EGP amount based on a set percentage, but cabinet members say the switch would cost the state an additional EGP 18 bn that it just can’t afford.

Goldman Sachs is shaking up its investment banking leadership team after former president Gary Cohn’s departure for Washington to serve in the Trump administration, the Financial Times reports. It’s true inside baseball stuff.

Elsewhere in the salmon-colored paper, Simon Munday looks at how a rapidly growing middle class and low labor costs “make India a logical base” for global automotive production. There are lessons for members of our own House of Representatives here as they ponder the long-awaited automotive directive.

Want to go to law school, but have commitment issues? Don’t want to take the LSATs? No problem. Harvard Law is expanding a pilot program that will accept college juniors without LSATs (you can substitute those GREs you took instead). Anyone accepted will be allowed to “defer admission as long as they finish college and spend at least two years working, studying or pursuing research or fellowships,” the New York Times reports.

Heading for Montreal this morning? You may want to call ahead. Massive flooding has prompted the declaration of a state of emergency, the CBC reports.

An antidote to flooding and all things financial for folks of a certain age: There’s a biography of late night host David Letterman out that “portrays Letterman as more self-loathing than self-critical.” (Uhm, we kind of get that some mornings…) New York Daily News previews the book, which you can also check out on Amazon here.

Furniture expo Le Marché is set to begin on Thursday 11 May and run until 14 May.

Prime Minister Sherif Ismail is reportedly heading to Britain on Wednesday along with a group of ministers for a two-day visit. Look for talks on investment and scrapping the remaining travel warnings on Egypt to feature high on Cairo’s wish list.

The executive regulations to the Industrial Permits Act are expected as early as this week. President Abdel Fattah El Sisi signed off on act yesterday, Al Borsa reports. According to Article 5 of the legislation, the Trade and Industry Minister is required to issue the executive regulations for the law within three months. The law was published in the Official Gazette last week after having passed the House of Representatives last month.

The Central Bank of Egypt’s Monetary Policy Committee will hold a rare Sunday meeting on 21 May to discuss interest rates.

The first expo highlighting Egyptian exports to Africa will be held in Nairobi, Kenya from 15-18 May, Ahram Gate reports.

Monday night was a sinfully boring one for the airwaves, as the nation’s talking heads offered up a mixed bag of (very stale) nuts. Think: Relocating shop owners and the census. Against that backdrop, here’s what stood out:

On Hona Al Asema, Lamees Al Hadidi spoke to her boss, interviewing the influential media owner Mohamed El Amin, chairman of the Future Media Group (FMG). The topic: The failed merger of FMG-owned CBC with rival Al Nahar, which Al Borsa had suggested back in April was on the rocks. El Amin talked about plans to restructure the group ahead of a potential IPO in 2020 or 2020 (watch, runtime 7:05).
Lamees also spoke to Manpower Minister Mohamed Safaan about the new 276-article Labor Act, which he said will force the private sector to obtain a court verdict before dismissing employees who commit serious and costly mistakes. Employers will retain the right to lay-off staff for business reasons, but will be also still be required to compensate them for each year of service (watch, runtime 6:31).
Over on Kol Yom, Amr Adib spoke to Saudi businessman and Shobokshi Development’s Managing Director Hassan Shobokshi about his plans for future investment in Egypt and the need for a QIZ-like type of agreement between Egypt, Saudi, and the UAE to help boost economic ties (watch, runtime 2:36).

On Yahduth fi Misr, Sherif Amer spoke got the lowdown on a proposed overhaul of the much-loathed thanaweya amma system from Education Minister Tarek Shawky. The system, which is still under study but should be unveiled “soon,” will no longer divide students into science and non-science majors and impose instead a standardized SAT-style test.

Finance and planning ministers talk FY2017-18 budget with the House: House of Speaker Ali Abdel Aal referred the Ismail government’s proposed FY2017-18 budget to the House Budget Committee after Finance Minister Amr El Garhy and Planning Minister Hala El Said briefed MPs on the spending bill yesterday, Ahram Gate reports.

So what’s new with the budget? The government had previously announced it was targeting GDP growth of 4.6% and revenues close to EGP 835 bn in FY2017-18 — the latter around 29.6% higher than the current year. Growth in the state’s top line will be driven mostly by higher tax revenues, El Garhy told MPs yesterday, according to Ahram Gate, which are expected to climb to EGP 604 bn from a projected EGP 458 bn in FY2016-17 and contribute around 14.7% of GDP (vs. 13.4% this year). Improvements to fiscal and tax policies should see taxes as a percentage of GDP rise to 18.5% by FY2021-22, the minister added.

The sectors the government sees growing: Four industries are expected to drive the improvement in overall economic performance: construction and real estate, wholesale trade, manufacturing, and agriculture.

What about spending? Total public spending will grow 21.3% to EGP 1.2 tn in FY2017-18 from EGP 994 bn this year, and El Garhy sees the budget deficit narrowing to EGP 370 bn, or around 9% of GDP from an estimated 10% this year and 12.5% in FY2015-16. The government hopes to narrow the gap further to 5-6% in the medium term, according to El Garhy. As we noted previously, the government is optimistic about delivering Egypt’s first primary surplus in a decade, which is estimated at 0.3%.

So what will the government be spending on? The state will continue to take measures to carefully control its spending and efficiently manage its resources, El Garhy said. With petroleum subsidies falling to 33% of the total subsidy bill in FY2017-18 (compared to 64% in FY2011-12) and electricity dropping to 9%, there is room to increase allocations to social welfare and subsidy programs as well as to the provision of basic goods and services (which together will make up around 42.7% of the subsidy bill, up from 26% in FY2011-12).

Food subsidies alone will be up 29.5% in the new budget to EGP 64.2 bn compared to EGP 49.5 bn bn this year, as the number of beneficiaries increases to around 71 mn citizens, while bread subsidy beneficiaries increase to 76.8 mn. Increased spending on social welfare and subsidies is expected to mediate the “temporary” negative impact that economic reform policies have had on consumers. Spending on healthcare and education accounts for the lion’s share of the state’s EGP 51 bn outlay on “social and human development,” Youm7 reports. That splits as 49% earmarked for healthcare, 28% to education, and 23% to scientific research.
Energy subsidies are projected to cost the state EGP 140 bn, with EGP 110 bn of that figure earmarked for petroleum products and EGP 30 bn for electricity. Spending on major national infrastructure development projects is expected to grow to EGP 135.4 bn from EGP 91 bn this year, of which EGP 65 bn will be financed from state coffers. The balance provided through grants, loans, and other forms of financing, the newspaper adds.

Although GDP growth levels had stagnated during FY2015-16 due to a basket of economic challenges, the first phase of the state’s economic and fiscal reform plan is bearing fruit and restoring investors’ faith in the market, El Garhy said. GDP growth is up, reserves are up, FDI is up, and so are exports, Planning Minister Hala El Said.

Things to look forward to: Output from the supergiant Zohr gas field and other recent discoveries are expected to boost Egypt’s natural gas production by 30% once the stations are operational, El Garhy said. That coupled with a 50% increase in the government’s electricity output once the new Siemens power plants come on stream will add to the Egyptian market’s attractiveness and sharpen its competitive edge in the region, especially as the government pursues further reforms to its fiscal and energy policies.

Egypt’s performance on the bond market merits a credit upgrade, Ahmed Namatalla and Ahmed Feteha write for Bloomberg. “The nation’s debt has had an implied rating of B2 or better for almost three months, according to Moody’s Analytics, one level higher than its official grade.” Egypt’s current credit rating at Moody’s Investors Service is B3, six levels below investment grade, similar to its B- score at S&P Global Ratings. The nation is rated one notch higher at Fitch Ratings. Aberdeen Asset Management’s Anthony Simond says, “Egypt has traded very well due to the positive reform momentum, IMF assistance and general bullish view toward emerging markets … If the government can keep its focus and not water down its plans, then an upgrade should be possible within six to 12 months.” The market is probably right and leading the rating agencies, says Stephen Bailey-Smith, investment strategist at Danish outfit Kolding. He says “the nation’s upcoming bond sale “will do well, as the search for yield is still solidly entrenched in market psyche.”

PICO Group subsidiary Cheiron Egypt has acquired 100% of Engie’s West El Burullus (WEB) gas concession in a transaction announced yesterday. WEB is located in shallow offshore Mediterranean waters with recoverable reserves of c.200 bcf gas and 3 mn bbl of condensates. BNP Paribas, financial advisor on the transaction, said in an emailed statement that “WEB is targeting plateau production of 100 mcf/d with first gas in 2020.” The transaction, it said, supports Engie’s “global strategy to exit E&P sector and focus on renewable energies,” while PICO will diversify its “Egyptian E&P asset base into new geological basins with higher gas component. BNP Paribas invited more than 50 bidders to take part in the process, with more than 10 signing confidentiality agreements. The transaction value has not been released. PICO, which controls assets in Egypt, Romania and Mexico, is owned by the Diab family of Cairo.

IPO WATCH- As the 1H2016 IPO window draws to a close before a long, dry summer, Beltone Financial has been mandated to manager the IPOs of Misr Italia Group and Egypt Foods on the EGX, Al Mal reports. Beltone CEO Ahmed Salem says the investment bank is now preparing Misr Italia for listing and searching for an independent financial advisor; the listing will likely take place in 3Q2017. He says “20% or more” of the company’s shares will be listed to finance expansion plans. Salem also says Beltone Financial is looking to restructure Egypt Foods and get it listed before the end of the year.

M&A WATCH- The merger between satellite channels CBC and Al Nahar has been officially terminated due to “differences in vision and management policies … that made achieving the goals of the merger impossible,” CBC announced in a statement carried by Al Borsa. The two networks had announced their intention to merge last May. Al Borsa had reported in April that the transaction was on the rocks.

Siemens has set a new global record for the execution of fast-track power projects byconnecting 4.8GW of generation capacity to the Egyptian grid, Julian Turner writes for Power-technology. Turner interviewed Peter Ullrich, project director of the three combined-cycle power plants at Siemens Power & Gas Division, who told him the project “sets a new industry benchmark in terms of modern power plant construction — the connection of 4.8GW of new capacity to the grid in only 18 months, 400MW more than promised.” He says the three plants in Beni Suef, Burullus and the new administrative capital — two of them built by Orascom Construction and one by Elsewedy Electric — will be the largest combined-cycle gas-fired plants ever built and operated. “In January 2017, 18 months after the signing, we achieved 4.8GW; in short, 10% more generating capacity than originally promised. Never before has the energy system of an entire country been developed so fast,” Ulrich adds.

The higher efficiency of the power plants saves Egypt an estimated USD 1.3 bn in natural gas consumption each year and Ulrich explains that each 1.5% improvement in efficiency reduces each plant’s carbon dioxide emissions by approximately 320,000 tonnes. He says Siemens is also working on Egypt on expanding renewables as a “combination of high-efficiency combined-cycle power plants and renewable sources are best suited to overcome the power shortages in the country.”

MOVES- Egypt-focused Apex International Energy appointed Willis “Trey” Gilmore as vice-president of corporate reservoir engineering in Houston and Raed Saba as deputy general manager and exploration manager in Cairo. Gilmore most recently served as Manager of Reserves at Sheridan Production Company after holding a variety of leadership roles at Apache Corporation. Saba was the Government Relations Manager and Senior Country Advisor for Shell in Egypt.

Electricity subsidy phase-out delayed, new prices to be unveiled this month: The Electricity Ministry will announce the new electricity prices this month, with the increases on track to be implemented in July, Al Borsa reports, citing ministry sources. The Egyptian Electricity Utility and Consumer Protection Regulatory Agency (Egyptera)’s new tariffs will take into account consumers’ income level and spending. The sources also say the ministry has decided to continue subsidizing electricity for another five years, rather than completely eliminate the subsidies by 2019 as was previously planned. Subsidies will be lifted within three years for hospitals, hotels, and other high-consumption establishments. The new pricing formula reportedly features four, rather than seven, residential consumption tiers:

• 0-100 kWh
• 101-200 kWh
• 201-600 kWh
• 601-1000 kWh and above

Price hikes will be implemented across the board, with the increases varying between each tier.

The Finance Ministry has finished drafting amendments to the Income Tax Law and sent them to the House of Representatives’ Economics Committee for discussion before preparing a final draft for the Ismail cabinet, Al Shorouk reports. The ministry had announced in March its plans to create what it called a “more progressive” tax code that would better serve the interests of achieving social justice. The changes include more generous tax rebates and refunds for citizens in the lower-income brackets of EGP 30-45k a year, according to the newspaper. The Finance Ministry is still on the fence about offering rebates to those whose taxes cross the EGP 200k mark and plans to discuss the matter with MPs. Also undecided is whether to push the minimum taxable income to EGP 7,000-7,200 from a current EGP 6,500.

The Central Bank of Egypt is planning to announce new policies during May to improve access to finance for small and medium-sized businesses, Deputy Governor Gamal Negm said on Monday, Al Mal reports. Banks have extended EGP 101 bn in finance to c. 37 SMEs since the central bank launched the initiative last year, Negm also said.

Advertising and media mogul Tarek Nour gave Al Masry Al Youm a wide-ranging interview yesterday. Nour said claims he has partnered with Ikhwan members are simply ”dumb.” Overall, he says, there is a sense that the state wants the media to “calm things down” a bit. Nour said he did not force firebrand journalist Ibrahim Eissa to quit his show on Al Kahera Wal Nas. He also said no one threatened him that his nearly three-decade-old Le Marché furniture exhibition would be cancelled if he didn’t fire Eissa. Instead, Eissa was the one who opted to resign from the channel willingly to focus on personal projects after Ramadan 2016.

Nour says he is not bothered by state-owned media or the ownership of media by entities affiliated with the state. He says TV channels had asked the state to support them financially as they were on the verge of financial collapse. This does not bother him, he says, and cites the examples of MBC and Al Jazeera as successful examples, caveating this with the need for there to be space for dissent and opposition

On the economy, Nour says he hopes the state’s expansion into business sectors like cement and fertilizers is temporary and to support economic growth. Otherwise, despite it being a critical intervention currently, if it is a more long term presence, he sees investors withdrawing from the market because “no one can compete with the state.” Nour also praised Investment and International Cooperation Minister Sahar Nasr and believes the Investment Act is a positive development. He also thinks the national mega projects drive is a positive investment that will yield rewarding results in the future, but was poorly marketed. Nour believes that state television in the form of the “Maspero” complex needs to be restructured, downsized, and moved out to the Media Production City. Nour also endorsed the notion of President Abdel Fattah El Sisi bidding for reelection.

EARNINGS WATCH- Arabian Cement Company reported a 75% y-o-y increase in net income to EGP 59.7 mn in 1Q2017, up from EGP 34.1 mn in the same period of last year, according to an EGX filing.

Today’s Egypt Holiday Photo of the Day is from Saint Catherine’s in Sinai. Declared a UNESCO World Heritage Area, Saint Catherine’s ecosystem is home to many endemic and rare species, including the world’s smallest butterfly — the Sinai baton blue butterfly. The image was shot for CIB’s 2016 Annual Report (microsite and print edition) by Zeina Abaza at Inktank Communications, which has produced the bank’s annual report for the past eight years.

In a pleasantly light overnight for coverage of Egypt in the international press, the Wall Street Journal’s Gerald Gelb takes a long look at how it is that while “opportunity knocks for Trump in the Middle East, answering will be hard.” His thesis is that while there is an “unusual alignment” between Egypt, Saudi Arabia and Israel: “At the moment, all three of those nations actually are strategically in sync with one another—and, simultaneously, on good terms with the new American administration.”

Other coverage worth noting in brief:

• Economists are saying a move that could grant foreigners residency in Egypt in return for foreign currency deposits “will help ease the country’s foreign currency crunch and boost the national economy,” Al-Monitor says.
• The type of rhetoric now flowing between Egypt and Sudan “heightens the risk for brinkmanship and increases the possibility of a border clash going forward,” Jeremy Luedi writes for Global Risk Insights.
• Salon says President Abdel Fattah El Sisi is one of the “top 5 bad hombres loved” by US President Donald Trump.

Egypt needs revolution in education that extends beyond classrooms and targets wrongheaded ideologies and behaviors that have pervaded the government and the populace alike, Nashwa El Houfy writes for El Watan. This revolution, El Houfy says, is necessary to restore a part of the nation’s soft power that is integral to its renaissance and will reshape its path forward.

Rania Al-Mashat, advisor at the IMF, spoke to AUC Today’s Ioanna Moriatis on her rich career as an economist: “Every international and domestic post or recognition along my career path better equips me to competently serve my country. That’s my lifelong goal,” said Al-Mashat. Al-Mashat focuses on global monetary policy and financial stability issues. The well-respected economist worked at the Central Bank of Egypt for 11 years as Sub-Governor and head of the Monetary Policy Department before joining the IMF.

“My career in economics allows me to provide an important service to different governments, including that of Egypt,” said Al-Mashat. “I am able to formulate economic policy frameworks that internalize and balance the interests of all stakeholders." Enterprise attended a courtesy meeting with Al-Mashat in Washington, D.C., where she reiterated the message delivered at the 2017 World Economic Forum (WEF) and featured in a WEF article, “Governments should design policies within frameworks that have clear objectives and instruments aimed at sustainable and equitable economic growth, which should be communicated regularly.” Check out her WEF panel “Investing in Peace” (runtime: 57:16).

How to use your computer (not an app — your actual computer) to grill a real steak: While most of us scurry to the phone to order our lunch (thank you, Elmenus), or at most prepare simple meals at home to pack to work, China’s newest internet superstar Miss Yeah is pushing the envelope with the elaborate dishes she so ingeniously cooks using everyday office supplies and equipment (or anything at hand that she happens to think might work).

“She popped popcorn in a soda can, made a DIY oven with a desk drawer and a light bulb, and grilled beef with an iron,” Siyi Chen writes on QZ. A foodie with no culinary raining bored with conventional cooking shows and clips, Miss Yeah’s creative ways won her a massive following in very little time. When, exactly, she has time to work is beyond us. Watch her take her computer apart and put it back together to grill a steak (runtime 3:21).

The Israeli ambassador to Cairo and his staff have been working from Jerusalem for the past five months for security reasons, according to Yedioth Ahronoth. Work contracts for 30 local embassy employees and rental for the ambassador’s home in Maadi have not been renewed in four months, the newspaper says. An Egyptian Foreign Ministry official says the staff was supposed to return a few weeks ago.

Deputy Foreign Ministers Hamdi Sanad Loza and Hisham El Naqib met yesterday with a US military delegation visiting Egypt to discuss cooperation and regional issues, including combating terrorism and promoting stability in the Middle East and Africa, Al Masry Al Youm reports.

Cabinet granted ACWA Power a government guarantee to for the construction of a USD 2.2 bn, 2.25 GW power plant on right-to-use basis for 25 years, sources tell Al Borsa. Negotiations are ongoing on issues including the plant’s location. Initially planned for Dairut in Beheira, it might be relocated.

ABB is in negotiations with the Housing Ministry to build power transmission and distribution infrastructure at the New Administrative Capital, CEO Naji Jreijiri tells Al Borsa. Separately, ABB is set to inaugurate eight solar power plants with production between 220 KW and 1.5 MW before the end of the year as part of its target of increasing its electricity production to 2 GW by 2022. The company also says it invested USD 50 mn in Egypt over the past five years.

Chinese company State Grid is building a 1,210 KM electricity transmission line for the Electricity Ministry, Minister Mohamed Shaker tells Al Mal. The 500 kV line is expected to be completed within a year.

Contracted cotton exports in the first six months of this season reached 33,000 tonnes, exceeding last season’s total exports of 32,000 tonnes, Alexandria Cotton Exporters Association head Nabil El Santarisi said, Al Borsa reports. Exports are up 22% compared to the first six months of last year’s season thanks in part to government contracts for higher-quality shipments compared to last year, El Santarisi explained. The rest of the season is expected to see further increases in exports, he added. Some reports had suggested the cotton industry is already seeing a revival following the EGP float and because of the global crackdown on “fake” Egyptian cotton.

A number of real estate investors from the UAE are looking to partner with the Housing Ministry to develop projects across the country and have asked officials to provide them with a number of guarantees before they officially venture into the market, unnamed sources tell Al Borsa. The guarantees include a clear cost- and revenue-sharing agreement, the government’s timeline for planned infrastructure works on the projects, as well as a schedule of completion for the projects.

The cruise industry along the Nile is betting that the tourism industry will return to normal in the long term, Josh Lew writes for Travel Pulse. Lew says Oberoi is continuing Nile cruise operations in Egypt, along with players like Viking, Uniworld, and a number of boutique operators including Sanctuary. He says they are banking on the idea that the Nile cruise industry is, if not “too big to fail,” at least “too old to fail.”

Tourism Minister Yehia Rashed is heading to Rome today to meet with Vatican officials and promote the Holy Family Trail, Al Shorouk reports. Rashed’s visit comes as a follow-up to Pope Francis’ visit to Egypt last week and part of the ministry’s strategy to promote religious tourism in Egypt.

State-owned Telecom Egypt will begin working on the infrastructure for its 4G network this summer, CEO Refaat Genedy said, according to Al Mal. The company is reportedly in talks to have Nokia and Huawei provide key technology for the network.

The House of Representatives’ CIT Committee has asked representatives from cab-hailing apps Uber and Careem to testify about how they protect user data, committee chair Tadros Kaldas tells Al Mal. The committee has been pushing for legislation to govern the work of companies like Uber and Careem in the Egyptian market and ensure they comply with state policies and regulations with regards to consumer protection and employee rights. Representatives of both companies were absent from a committee meeting they were expected to attend last week, Kaldas alleges.

Gorica Egypt Group won a USD 30 mn tender to supply the Public Transport Authority with 10 buses for delivery at the beginning of next year, Al Borsa reports.

BCG, McKinsey, and Oliver Wyman are bidding to advise Attijariwafa Bank’s strategy in Egypt for the next five years, Al Mal reports. Bank CEO Mohamed El Kettani says the project will be awarded within the next three months. Separately, the bank is also “planning to complete expansions in East and West Africa this year as it focuses on consolidating its new acquisitions to spur growth.” according to Bloomberg.

The Central Bank of Egypt has now pushed EGP 6 bn into its initiative to promote mortgages for low and middle income, deputy central bank governor Gamal Negm said, according to Al Mal. The CBE is looking to bring total financing extended under the initiative to EGP 10 bn and could raise that ceiling if there is sufficient demand, he said.

Banque Misr dropped spending limits on international use of its credit cards as of yesterday and will raise the cap for debit card spending abroad soon, Vice Chairman Akef El Maghraby said, according to Al Borsa.

Banque Misr agreed to extend a EGP 1.2 bn facility to Damietta furniture city at an exceptional 7% interest rate, bank Chairman Mohamed El Etreby said on Monday, Al Borsa reports. Direct project financing will carry a 5% interest, El Etreby adds. The first phase of the furniture city project in Damietta, which is being developed by the military’s Engineering Authority, is expected to come online in December 2017.

House of Representatives Speaker Ali Abdel Aal referred a draft law on monitoring social media platforms to a joint taskforce of the House committees on CIT and legislation for review, Al Masry Al Youm reports. If passed, the bill would require social media users to register their national IDs and personal information with state-owned Telecom Egypt.

Former Ikhwan supreme guide Mohamed Badie was sentenced to life in prison yesterday in a retrial for "planning violent attacks", according to AFP. “Badie is being prosecuted in more than 35 trials, according to his lawyers. He received three death sentences in other cases but those rulings have also been scrapped.”

Egyptian Football Association president Hani Abo Rida has been elected to the Fifa Council, according to BBC. Abo Rida got 50 votes with four going to his Cameroonian challenger Zelkifli Ngoufonja. “It takes to seven the number of Africans on the Fifa Council,” BBC says.

Cracking down on “insulting state figures and institutions”: The House of Representatives is looking to amend the country’s Penal Code to enforce stricter punishments for anyone convicted of insulting the president and other “state symbols,” according to Al Shorouk. House Defense Committee chair Kamal Amer reportedly submitted a draft proposal to House Speaker Ali Abdelaal on Monday.

In the latest from the war on terror, the Interior Ministry reports having killed in a shootout what the AP refers to as eight members of the Ikhwan before they could carry out terror attacks, while the Egyptian Air Force is said to have destroyed a 15-vehicle convoy laden with weapons as it crossed illegally into Egypt from Libya.