Wednesday, 11 May 2022

PM — Understanding budget season



Good afternoon, wonderful people, and welcome to that time of the week when we can almost smell the weekend.


#1- Denmark’s Cimbria is building a wheat silo complex in Port Said with a capacity of 100k tons in a bid to “secure food storage” in Egypt, according to a company statement. The complex will include eight silos, each holding a capacity of 12.5k tons, and will be used to store imported wheat. Construction of the complex began in February and is expected to be complete within two years.

#2- German fiberboard producer Homann Holzwerkstoffe is acquiring a 27% stake in Egypt Kuwait Holding (EKH)’s subsidiary Global MDF Industries, according to an EKH statement (pdf), without disclosing the transaction amount. The agreement, which takes place over two phases, comes as part of a joint venture between the two companies. The first tranche involved the acquisition of a 16.2% stake today, while the remaining 10.8% will be finalized at the start of production, the statement said.


The EU is working on a USD 205 bn plan to cut off Russian oil in five years time, Bloomberg wrote citing knowledgeable sources. The European Commission will propose upping its clean energy targets, from the current 40% to 45% by 2030 as well as increasing energy-efficiency targets, which would call on member nations to cut their energy consumption by a 13%.

Hello, Europe: In a bid to boost LNG imports from non-Russian suppliers, the EU will be looking to pour more into infrastructure investments to allow for the “sustainable imports of LNG and pipeline gas from the new suppliers and ensure that development is hydrogen-ready.” Egypt has been looking to capitalize on Europe’ emerging thirst for LNG, with Eni signing agreements last month to supply more of our LNG to Italy and Europe. Egypt also began shipping out LNG to Latin America last month.

Hungary is still pushing back on plans to end reliance on Russian fossil fuels, adding that “if Brussels is serious about introducing this embargo, then that’s only possible if shipments via pipelines are excluded,” Bloomberg wrote. The two sides have been working on reaching an agreement with no luck.

This push for the plan came as Ukraine announced that it will stop gas flows through its Sokhranivka gas transit point seeing that it had lost control of the infrastructure in the occupied territories. This move will significantly disturb European gas imports, with the transit point being responsible for the delivery of almost a third of the fuel moved from Russia to Europe through Ukraine. Russian gas transit shipments are set to drop 18% today, on the back of the disturbance. European gas prices jumped 6.8% on the news. The story dominated the foreign press: Bloomberg | Reuters | The New York Times | AP.

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

  • Manufacturers get a break with exemption from L/C requirements for some imports: Production inputs and raw materials will be exempt from a CBE rules handed down in February that has required the vast majority of importers to use letters of credit (L/Cs) to cover imports, the presidency announced yesterday.
  • Rates to rise 200 bps next week? The Central Bank of Egypt will likely raise interest rates for the second time since March when it meets next week as inflation continues to accelerate and rising global rates put pressure on portfolio flows. Six of the seven analysts we surveyed this week expect rates to increase next Thursday, 19 May, with five of them seeing the central bank hiking rates by up to 200 bps.
  • EBRD downgrades regional growth outlook: The European Bank for Reconstruction and Development downgraded its growth forecast for the nations in which the lender operates in its latest Regional Economic Prospects report, forecasting overall growth across its seven regions slowing to 1.1% in 2022 from 6.7% last year — a downwards revision of 0.6 percentage points since its last forecast in March.


The UK and Egypt are bringing 40 countries together in Copenhagen tomorrow to discuss climate ahead of COP27, according to a press release from the British government. In the first jointly led event by the UK and Egypt as COP26 and COP27 Presidencies, the May Ministerial Meeting will include sessions on how to adapt to the impacts of climate change, address loss and damage due to climate change, mobilize climate finance, and reduce emissions to stay under the 1.5°C benchmark. The two-day meeting will kick off tomorrow and wrap up on Friday and mark the first meet up since COP26 in Glasgow.


A huge US “GreenTech business mission” is inbound next week. More than 40 US companies will be in Egypt during 15-17 May to kick the tires on green investment and potential business partnerships in sectors ranging from energy to healthcare, agriculture, aviation, construction and water resource management. The high-level delegation will meet with members of the business community and senior government officials, including Prime Minister Moustafa Madbouly and other members of cabinet. The mission is being organized by AmCham and the US Chamber of Commerce.

The PSA world squash championships get underway in Cairo this Friday, 13 May. The men’s and women’s finals will be played on 22 May. There is USD 550k at stake for each of the men’s and women’s championships, making this the biggest purse on record for a squash tourney. The CIB-sponsored championships will play out at SODIC’s Club S Allegria and at the National Museum of Egyptian Civilization.

The Central Bank of Egypt will meet to review interest rates on Thursday, 19 May.

The last of this season’s earnings releases will drop by 31 May after the Financial Regulatory Authority granted listed companies a two-week deadline extension.

Early-stage foodtech startups have until June to apply to the second edition of the UAE Ministry of Climate Change and Environment and Tamkeen’s global FoodTech Challenge, with an earnings pool of USD 2 mn, according to a statement (pdf). Partners supporting the competition include Aspire, ADQ, Silal and Emirates Foundation.

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

☀️ TOMORROW’S WEATHER- Expect a daytime high of 32°C tomorrow in the capital city and a nighttime low of 18°C, according to our favorite weather app.

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The latest victim of the supply chain disruptions: The PS5. Sony’s sales of its highly popular PlayStation5 console nosedived 22.3% in FY 2021-2022, falling to 11.5 mn units (and coming short of an expected 14.8 mn), the company said in its FY 2021-2022 financial statement (pdf). The weak performance led the company to revise downward its forecasted sales for the upcoming fiscal year to 18 mn from the previously expected 22.6 mn This comes as the ongoing war between Russia and Ukraine piled on further pressure on an already-strained global supply chain, after the console had struggled with supply constraints since its release in late 2020, thanks to component shortages and logistics disruptions. “A downside risk would be if there is a further worsening in the supply chain, including the potential widening of lockdowns in China,” Bloomberg cites CFO Hiroki Totoki as saying.

In case Truth Social doesn’t pan out, Elon Musk wants to un-ban Trump from Twitter: Tesla boss Elon Musk has pledged to reverse Twitter’s permanent ban on former US President Donald Trump once he takes over the social media giant, which he’s in the process of buying for USD 44 bn. Speaking at a Financial Times conference, the tech b’naire said the decision to impose a ban was “morally wrong” and “flat out stupid,” and only amplified Trump’s voice among the right-wing. Twitter, Facebook, and other social media platforms imposed a ban on the former US president soon after a group of his supporters stormed the US Capitol on January 6 last year. Musk, who calls himself a freespeech absolutist, has been publicly critical of Twitter’s moderation strategies.



(all times CLT)

Welcome to Eden is a dystopian-thriller that will keep you on the edge of your seat. The Netflix original series just rocketed up the most-watched lists worldwide — and for good reason. The Spanish show tells the story of young people invited to the most exclusive party in history, set in a secret island and organized by the brand of a new drink. But while they’re there, things take a sinister, cult-esque turn and they discover that their dream vacation will be anything but relaxing. The first season consists of eight episodes, with runtimes ranging between 36-46 minutes long. Word of caution: You may want to clear your schedule before you hit play — the binge-worthy show has had some of us canceling plans left and right.

The highly-anticipated final of Coppa Italia between Inter Milan and Juventus will kick off at 9pm tonight. Besides adding a prestigious trophy cup to their wall, the victors will bring home the largest sum of money in the tournament’s history this year. The two clubs will reportedly collect EUR 3 mn just for securing a spot in the final, while whichever team goes home with the trophy will receive another EUR 4.5 mn.

Premier League: Manchester City will move one step closer to retaining their Premier League crown when they face Wolves tonight at 9:15pm. There are a few other PL games tonight to keep the fantasy football players entertained, including Chelsea v Leeds United at 8:30pm, while Everton will face Watford at 8:45pm.

La Liga is also on tonight, with a handful of games including Atlético Madrid v Elche at 9:30pm, while Sevilla and Mallorca will face off at 8:30pm.

On the home front, Alexandria’s two giants Smouha and Al-Ittihad face off at 6:30pm, Pyramids will face Misr Lel Makassa at 9pm, and El Masry will face Ghazl El Mahalla shortly after we hit send at 4pm.


(all times CLT)

Eman Hussein’s latest paintings will be on display in an exhibition titled Mind the Gap at Ubuntu Art Gallery starting 7pm tonight. Through her artwork, Hussein aims to blur the boundaries between art, architecture and design. She blends together the conceptual categories of time, movement, and change, while exploring issues relating the atomic scale to the cosmic scale. The exhibit will run until 24 May.


Memoirs on challenging the status quo: Best known as the iconic former president of Nintendo of the Americas, Reggie Fils-Aimé’s new memoir, Disrupting the Game: From the Bronx to the Top of Nintendo, is the ultimate game plan for anyone looking to beat the odds and rise to the top. As he shares the challenges he faced throughout his life and career, the son of Haitian immigrants’ journey to becoming a gaming legend doubles as a powerful leadership guide. tReggie offers lessons on mastering the grit and resilience it takes to dominate the business world, how to maintain relentless curiosity, and how to leverage disruptive thinking.



Ezz Steel will pay out dividends to its shareholders on 30 June at a price of EGP 0.80 per share, the company announced (pdf).


The EGX30 rose 0.4% at today’s close on turnover of EGP 855 mn (2% belowthe 90-day average). Foreign investors were net sellers. The index is down 9.2% YTD.

In the green: MM Group (+7.0%), Abu Qir Fertilizers (+6.3%) and Mopco (+4.8%).

In the red: TMG Holding (-2.5%), Eastern Company (-1.8%) and Madinet Nasr Housing (-1.7%).


Enterprise Explains: the state budget process: It’s that time of the year when the government looks to get its budget for the next fiscal year approved. The state budget is more than just the country’s income statement and balance sheet. It’s effectively a policy statement and a manifesto on how the government plans to run the country in the next fiscal year. As such, we felt it was crucial to give you a refresher on how the budget process works — from its initial draft and proposal to its implementation.

Reading the budget: The budget, which tracks spending for the fiscal year (running from 1 July to 30 June of the following year), is split into three classifications: Economic, functional, and administrative. The economic section tracks the state’s full revenues and expenses. The functional classification breaks down the budget into 10 operational sectors of the functions of state. These include general public service, defense and national security, public order and safety, economic affairs, environmental protection, housing and community amenities, health, youth and religious affairs, education, and social protection. Meanwhile, the administrative section covers budgets of individual ministries and agencies.

The big income generators: The biggest percentage of the state’s revenues come from taxes, income generated from government services, economic bodies (such as the Suez Canal), and state enterprises, as well grants from foreign partners. Paling by comparison is revenue from sales of securities (shares in state companies and bonds).

The heaviest sinks: These include civil service wages, subsidies, social benefits, public works and services, and loan payments.

When looking at the state budget, there are a number of key figures that are indicative of the state’s fiscal performance:

  • GDP growth: This looks at the country’s annual change in economic output, measuring how fast the economy is growing;
  • A budget deficit / surplus: This is the change between revenues and expenses. A deficit occurs when the state’s spending exceeds its revenues;
  • Primary surplus / deficit: This is similar to the budget’s overall surplus or deficit, except it does not count our debt service bill;
  • The public debt-to-GDP ratio tells us where the state’s debt stands in comparison to its GDP, which reflects the country’s ability to pay back what it owes;
  • The debt servicing bill: This refers to the annual interest and principal payments on the state’s debt. This has become one the most anticipated figures in the state’s budget to see if it continues being the single largest item in the budget.

Nothing is set in stone: Considering its reliance on FX and imports, Egypt is wildly affected by the global macro climate. And since Egypt’s account balance (how much we export vs how much we import) is a crucial element of the economy, it becomes important to note how much the state projects global prices of oil and food are expected to be in an upcoming fiscal year.

Overview of the timeline: Each year, the state budget goes through the same cycle of formulation, discussion and approval, execution and audit, which spans from September until December of the following year.

Drafting the budget: The Finance Ministry issues its budget circular, taking into account estimated revenues, allocations and expenditures for the year. This process begins around the second quarter of the fiscal year (September-November). The government’s various ministries and entities are then asked to formulate their required budgets and submit them to the Finance Ministry.

Internal discussions and approval: Next, the ministry issues its pre-budget statement, which it then sends to the cabinet for approval. Once that is given the greenlight, an executive budget proposal is submitted to the president.

Then it’s off to the legislative branch of gov’t: The draft budget is then sent to the House of Representatives for discussion and approval during its spring session, with the introduction usually taking place in late April or May. The budget is then looked at more thoroughly by the various committees of the House of Representatives, with each committee looking at the subset of the overall budget in which they’re specialized (e.g. The House Defense Committee will review the Defense Ministry’s budget, while the House Education Committee will look at proposed expenses for the Education and Higher Education ministries). The House may choose to call in ministers for public hearings on the budget. Then the bill goes into a plenary session for a vote of approval.

It is not unlikely that we see delays in this stage of the process, as various House committees could push back on key points of the budget. As with other pieces of legislation, they could push for amendments, which may see the budget (or portions of it) sent back to the government and then reintroduced. If the budget is not signed into law by 30 June (when the current fiscal year ends), a law rolling over the current fiscal year’s budget into next year is then passed. This will continue until the new budget gets approval and we begin working with it.

Getting it done: If it is approved in a House plenary session, it gets signed into law by the president. It is then published by FinMin.

Reporting: Earlier this year, President Abdel Fattah El Sisi signed into law the Unified Budget Act, which requires the government to present an annual medium-term budgetary and fiscal strategy to the House and set spending limits for each ministry. FinMin also publishes a simplified version of the state budget and its pre-budget statement for citizens which is set to be more accessible for the general public. You can check out the citizen’s budget for FY2020-2021 here (pdf).

Closing out the budget: Once the fiscal year, the House has to sign off on closing the budget prior to 30 June and approving the following year’s budget. If after the year is done, the government has gone over budget, the government then has to get sign off from parliament for a budget overdraft before the closing of the budget.

The audit phase: Four months after the fiscal year is done, state agencies and ministries work on their final accounts report, which includes their revenues and spending for the year. The year’s budget is then audited by the Accountability State Authority.

Want a more detailed guide on the budget? FinMin has you covered here (pdf).



  • Events with specific dates or months are right here up top
  • Events happening in a quarter or other range of time with no specific date / month appear at the bottom of the calendar.


10-12 May (Tuesday-Thursday): EBRD Annual Meeting and Business Forum, Marrakesh, Morocco.

12 May (Thursday): Financing sustainable development in Egypt virtual roundtable, Official Monetary and Financial Institutions Forum.

12-13 May (Thursday-Friday): Egypt and UK will organize the May Ministerial Meeting in Denmark to discuss climate ahead of COP27.

13-14 May (Friday-Saturday): Target Misr Expo, Dusit, New Cairo.

13-22 May (Friday-Sunday): PSA World Championships, Cairo.

Mid-May: The trial period to extend the Advance Cargo Information (ACI) system to air freight.

19 May (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

19 May (Thursday): EFG Hermes’ general shareholders’ meeting to discuss, among several things, a capital increase of EGP 973 mn to finance the distribution of bonus shares to the company’s minority shareholders.

25 May (Wednesday): The deadline for private companies to pre-register ahead of bidding for the second phase of the PPP national project to establish and operate 1k language schools.

30-31 May (Monday-Tuesday): Egypt Can with Industry, Cairo, Egypt.

31 May (Tuesday): Last day for EGX-listed companies to file 1Q2022 earnings

31 May (Tuesday): The application deadline for ITIDA’s annual Export IT program.

31 May (Tuesday): Extended deadline for EGX-listed companies to disclose 1Q 2021 earnings.

May: Investment in Logistics Conference, Cairo, Egypt.

May: General Authority for Land and Dry Ports to issue the conditions booklet for the tender to establish and operate the Tenth of Ramadan dry port.


5-7 June (Sunday-Tuesday): Africa Health ExCon, Al Manara International Conference Center, Egypt International Exhibitions Center, and the St. Regis Almasa Hotel, New Administrative Capital.

5 June (Sunday): GB Auto is hosting an extraordinary general assembly meeting (pdf).

9 June (Thursday): European Central Bank monetary policy meeting.

14-15 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15-18 June (Wednesday-Saturday): St. Petersburg International Economic Forum (SPIEF), St. Petersburg.

16 June (Thursday): End of 2021-2022 academic year for public schools.

21-22 June (Tuesday-Wednesday): Aswan Forum for Sustainable Peace and Development, Cairo.

23 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

27 June-3 July (Monday-Sunday): World University Squash Championships, New Giza.

30 June (Thursday): June 30 Revolution Day, national holiday.

30 June (Thursday): Deadline for bids for National Democratic Party HQ redevelopment contract.

June: Egypt will launch a unified ticketing system for all means of transport at the Adly Mansour Interchange Station.

June: Polish President Andrzej Duda will visit Egypt to coordinate ways to ship Ukrainian wheat to Egypt amid the war in Ukraine.


July: A law governing ins. for seasonal contractors will come into effect.

July: Fuel pricing committee meets to decide quarterly fuel prices.

1 July (Friday): FY 2022-2023 begins.

1 July (Friday): Official rollout of e-receipt system begins.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

21 July (Thursday): European Central Bank monetary policy meeting.

26-27 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

30 July (Saturday): Islamic New Year.

Late July – 14 August: 2Q2022 earnings season.


August: Work to extend the capacity of the Egypt-Sudan electricity interconnection to 600 MW to be completed.

18 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.


September: Egypt will display its first naval exhibition with the title Naval Power.

September: Central Bank of Egypt’s Innovation and Financial Technology Center to launch incubator for 25 fintech startups.

8 September (Thursday): European Central Bank monetary policy meeting.

18 September (Sunday): Deadline for brokerage firms, asset managers and financial advisors to register with the Egyptian Securities Federation.

20-21 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

22 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.


October: World Bank and IMF annual meetings in Washington, DC

October: Fuel pricing committee meets to decide quarterly fuel prices.

1 October (Saturday): Use of Nafeza becomes compulsory for air freight.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday, national holiday.

18-20 October(Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

27 October (Thursday): European Central Bank monetary policy meeting.

Late October – 14 November: 3Q2022 earnings season.


November: Cairo Water Week 2022.

1-2 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

3 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

4-6 November: The Autotech auto exhibition kicks off at the Cairo International Exhibition and Convention Center.

7-18 November (Monday-Friday): Egypt will host COP 27 in Sharm El Sheikh.

21 November-18 December (Monday-Sunday): 2022 Fifa World Cup, Qatar.

13-14 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15 December (Thursday): European Central Bank monetary policy meeting.


22 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.


January EGX-listed companies and non-bank lenders will submit ESG reports for the first time.

January: Fuel pricing committee meets to decide quarterly fuel prices.


1H2022: Target date for IDH to close its acquisition of 50% of Islamabad Diagnostic Center.

1H2022: e-Finance’s digital healthcare service platform, eHealth, will launch its services.

1H2022: The government will respond to private companies’ bids to build desalination plants.

1H2022: Egypt’s second corporate green bond issuance expected to be announced.

14 March-30 June: The “Escape to Egypt” exhibition at the Coptic Museum, in celebration of its 112th anniversary.

2Q2022: The Sovereign Fund of Egypt will invest in two companies in the financial inclusion and non-banking financial services sectors.

End of 2Q2022: The Financial Regulatory Authority’s new Ins. Act should be approved.

End of 2Q2022: Door for bidding for the contract to redevelop the site of the former National Democratic Party HQ to close.

End of 1H2022: Emirati industrial company M Glory Holding and the Military Production Ministry will begin the mass production of dual fuel pickup trucks that can run on natural gas.

2H2022: The inauguration of the Grand Egyptian Museum.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H2022: The government will have vaccinated 70% of the population.

3Q2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

End of 2022: e-Aswaaq’s tourism platform will complete the roll out of its ticketing and online booking portal across Egypt.

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish above between the actual holiday and its observance.

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