Electricity prices just got a lot more expensive.

The EGX hit a 13-month high yesterday as it edged up 0.6 percent, good for a year-to-date gain of 18.1%. With our position as one of the world’s worst-performing markets at not-exactly-distant memory, it’s a pleasant milestone to note — even though it will all come tumbling down if we fail to secure a bailout package from the IMF…

Speaking of which: The Ismail government announced a sharp increase in electricity prices yesterday (more on that below), showing movement on the reform agenda as word emerged that negotiators have apparently proposed an 18-month reform program to the IMF. Citing a senior government official in a piece geared for domestic consumption, Al-Masry Al-Youm noted that Egypt’s reform agenda, which is being reviewed by the IMF and other finance institutions, is set in stone and will not change — regardless of the political consequences. The source goes on to note that we’re not alone: devaluation has been implemented successfully in other places. The official continues to spout the government line that no organization has pressured it to accept key elements of the program. The story is making international headlines after being picked up by other domestic press outlets and rising to the attention of the Associated Press, which perhaps bangs the drum a bit too hard in claiming there’s daylight between the two sides.

The news came as the administration prepare to open talks with the World Bank on the second tranche of its USD 3 bn in budget support, government sources tell Al Borsa. The newspaper’s sources expect the first tranche of the loan, which was signed back in December, to be received soon after the House of Representatives ratified the agreement. Finance Minister Amr El Garhy said last month that he expects the first tranche to arrive during the second quarter of the FY2016-17 fiscal year (October-December), though he noted that the funding hinges in part on the House passing the value-added tax legislation.

“Balance of payment pressures are still quite pronounced in Egypt,” senior economist at Dubai-based Emirates NBD Jean-Paul Pigat told Bloomberg. “There’s significant pressure on the [EGP] to be devalued, and now it’s just a matter of getting the timing of the move right,” he added. Pigat expects the devaluation shortly after receiving part of the IMF financing, in addition to support from other lenders, giving the CBE enough funds to defend the EGP.

The CBE’s crackdown on the parallel market continued on Monday, as it shut down five FX bureaus, bringing the total number of exchanges permanently shuttered and suspended to 47, Al Masry Al Youm reports. The crackdown now sees the EGP trading in the EGP 12.45-12.60 band on the parallel market, the newspaper reports.

It’s official: Your electricity bill is going to go up: Electricity Minister Mohamed Shaker announced the new tariff list for electricity at a press conference yesterday, Al Mal reported. Shaker said the cost of producing 1 kWh has increased to EGP 0.63 from EGP 0.47 this year, he added, which would have pushed the cost of subsidising electricity to EGP 40 bn if consumer prices were not increased in step. EGP 30 bn were allocated for power subsidies in the FY16-17 state budget, the minister noted. New electricity prices come into effect this month for all tiers, he said.

The new prices per kWh across the seven residential consumption tiers are:

• 0- 50 kWh: EGP 0.11 (from EGP 0.075)
• 51-100 kWh: EGP 0.19 (from EGP 0.145)
• 0-200 kWh: EGP 0.21 (from EGP 0.16)
• 201-350 kWh: EGP 0.42 (from EGP 0.29)
• 351-650 kWh: EGP 0.55 (from EGP 0.39)
• 651-1,000 kWh: EGP 0.95 (from EGP 0.68)
• Above 1,000 kWh: EGP 0.95 (from EGP 0.78)

Electricity prices for commercial consumption also increased:

• 0-100 kWh: EGP 0.35 (from EGP 0.34)
• 101-600 kWh: EGP 0.69 (from EGP 0.58)
• Above 600 kWh: EGP 0.96 (from EGP 0.86)

At the same press conference yesterday, Shaker also confirmed that the companies managing Siemens-built power plants are among those that could be up for IPO in the recently announced privatization program. The tariff hike is getting international coverage from Reuters.

Is the head of the House committee investigating this season’s wheat harvest overdoing it a little? “Fraud in the domestic wheat harvest will not be less that EGP 4 bn,” said Magdy Malak, head of the House of Representatives committee investigating allegations that wheat when missing during the harvest — or that state officials faked the final count. In an extensive interview with Al Borsa, Malak said that as much as 2-2.25 mn tonnes of wheat is “missing” from the 4.8 mn tonnes reportedly collected. Malak said the committee has so far identified EGP 560 mn in discrepancies between official tallies and stores on hand at 10 sites it has visited (out of an estimated 135 silos). Grandstanding by committee members including Malak has increased since the investigation began and has taken on a new tone since the Prosecutor General’s Office issued arrests warrants in connection with the scandal on Sunday.

Malak attacked the state-owned General Company for Silos and Storage (GCSS) for relying on the private sector. Some 3 mn tonnes of the 4.8 mn tonne harvest were stored in privately-owned silos, while 80% of government silos remain empty. “We will push for the punishment of the body that failed to properly utilize the 93 facilities built by Blumberg Grain,” said Malak, in a not so veiled reference to the GCSS. Malak tempered his tone but also criticized the Planning Ministry and what he said was its failure to act on allegations that the smart card system had been hacked, blaming it for depending on “unreliable companies.”

Visa is offering to help with the supply and bread smart card system, a senior company executive told Supply Minister Khaled Hanafy yesterday. Tarek El Husseiny, Visa’s GM for North-West & Central Africa, is said to have offered to work with other smart card companies already contracted by the Planning Ministry to develop a secure and complete electronic financial system for the distribution of supplies and bread subsidies, according to a ministry readout on the meeting carried by AMAY.

Is the House actively trying to shoot us in the collective foot? The House Planning and Budget Committee is looking expand the exemptions list of the value-added tax (VAT) legislation, according to the committee’s chair Hussein Eissa. “We want to add eight new goods including domestic weaving and textiles, cooking oil, and [get this] cleaning goods,” Eissa tells Al Borsa. His comments come as the committee begins reviewing the complaints about the VAT legislation logged during last week’s hearings, ahead of deliberating and compiling a report on the VAT next week. During those hearing, Finance Minister Amr El Garhy had told the House that the IMF complained about the size of the exemptions list for the proposed value-added tax (VAT), adding that around 99% of basic goods were already exempt.

Another soapbox preacher in the House on the IMF: Meanwhile, Tarek Radwan, the Deputy Chair of the House Foreign Affairs Committee is lashing out at the Ismail cabinet for entering talks with the IMF. He accuses the government of not being transparent about the talks (obviously not a reader of Enterprise) adding that the loan would prove catastrophic for the poor in Egypt, Al Mal reports.

On a rather more constructive note: The House Planning and Budget Committee is also apparently drafting a comprehensive law taxing tobacco and its paraphernalia, the proceeds of which will got to the national health insurance fund, Eissa said, according to Al Masry Al Youm. The Tax Authority collects EGP 1.6 bn taxes on cigarette sales every year, of which EGP 35 mn go to health insurance for school students.

Meanwhile, the House Industry Committee adopted 13 recommendations to the government to help industry, which is reeling from the FX crunch, Ahram Gate reports. These include granting export subsidies based on the entire cost of the value chain and not the just the end product and extending the grace period to pay customs on raw materials to two years. In a separate interview the committee’s chair and Federation of Egyptian Industries head Mohamed El Sewedy called on the government to raise export subsidies to EGP 10 bn per year from EGP 6 bn. We had noted yesterday that these subsidies were in fact EGP 4 bn in this year’s budget, excluding any special or conditional earmark.

The House CIT Committee held hearings with Uber and Careem as it looks into what might be an acceptable framework for ride-hailing apps. The hearings found that Uber allegedly does not pay taxes in Egypt, according to media coverage, but rather is taxed in the Netherlands, where one of its international headquarters is based. As the Netherlands and Egypt have a dual-taxation agreement, Uber is (essentially) not obligated to pay taxes here. The same cannot be said for its drivers, whose names and records are submitted to the Tax Authority, obliging them to file tax returns. We had noted back in March, that the Tax Authority had plan to force Careem and Uber to comply with withholding tax provisions in a bid to ensure that private cars used for commercial purposes are accurately tallied and taxed. As for licensing, representatives of both Uber and Careem called for special permits be provided to their drivers to stave off allegations of illegitimacy and harassment, Al Borsa reports. Sounds a lot more like a 20th century livery industry than today’s “sharing economy” if you ask us.

The Housing Ministry will issue seven mega-projects valued at EGP 200 bn “soon” under the PPP framework, Deputy Housing Minister Khaled Abbas told Al Mal. The projects are set to be implemented over 10 years and are the second phase of public-private partnership projects launched at EEDC in 2015, he added. We had previously reported that NUCA was prioritizing bids from companies that can show USD-denominated revenue streams. The phase-two land plots are in Six October, Sheikh Zayed, New Aswan, and New Assiut and include plots zoned for housing, tourism and retail.

The NTRA has refused to negotiate with mobile network operators (MNOs) on its requirement that they pay a portion of their 4G license fees in USD. The regulator is also not interested in widening the spectrum for sale as part of the as-yet undisclosed ticket price, sources tell Al Mal. The spectrum on offer is inefficient for 4G services and could ultimately even worsen 2G and 3G service provision by creating additional traffic on existing networks, a source at one of the MNOs alleges. MNOs are demanding a schedule for when additional frequencies will be made available, but that may be up to the Defense Ministry, which has to sign-off on the release of any additional spectrum.

Vodafone Egypt and Orange Egypt have also reportedly refused to acquire international gateway licenses, which they feel is too expensive as they are priced at EGP 1.8 bn each, Al Borsa reports.

Meanwhile, Telecom Egypt (TE) is requesting 99.9% uptime guarantees from MNOs from whom it will rent infrastructure, demanding financial penalties in the case of three consecutive months of poor performance, Al Borsa reported. MNOs are countering by pressuring TE on interconnection and other fees.

El Sisi following up on the file: President Abdel Fattah El Sisi said at a meeting yesterday that he backs ICT minister Yasser Al Qady’s 4G policy, Al Masry Al Youm reported, picking up an Ittihadiya statement.

Forbes Middle East announced the list of 20 Most Promising Egyptian Startups, and it’s really nice to see so many Enterprise readers among them. Ranked first was Instabug, the software glitch detection tool founded by Omar Gabr and Moataz Soliman which received USD 1.7 mn in seed funding from Palo Alto, California based VC Accel Partners and angel investors. Instabug plan to open an office in San Francisco by the end of the year. Second on the list is Yaoota, a price comparison tool developed by Sherif ElRakabawy and Mohamed Ewis in 2014. Yaoota received a USD 2.7 mn investment from an Abu Dhabi-based investment firm in 2015, and now operates in the UAE with plans to expand into Saudi Arabia. In third was Wuzzuf, the recruitment platform founded by Ameer Sherif in 2011. Wuzzuf raised USD 1.7 mn in a series A round from European and Silicon Valley venture capitalists.

Egypt has yet to reap the benefit of China’s “One Belt, One Road” policies: An analysis by a data unit of the Financial Times puts Egypt at the bottom of a list — just ahead of “others” — of targets for Chinese outward direct investment (ODI). Funds flowing to Egypt totalled USD 2.25 bn between September 2013 and June 2016, putting it in the same league as South Africa, Myanmar, Morocco and Thailand. Indonesia (USD 33.5 bn), the US (USD 20.5 bn) and India (USD 15.8 bn) topped the list. Just a quick note here: ODI isn’t a politically correct term for FDI. It a nitpick, really, but the World Bank has thoughts on the differences between FDI and ODI here.

A quiet day on the international front: As a measure of how slow a news day it has been for Egypt in the international press, pickup of the Egypt vs. Germany women’s beach volleyball match pitting conservatively attired Egyptians against bikini-clad Germans heavily outnumbers pickup of the AP’s story on Egypt proposing an 18-month reform program to the IMF. There’s never been a bikini photo the Daily Mail didn’t love, so it naturally has the most extensive coverage with its ever-classy “The cover-ups versus the cover-nots: Egyptian and German beach volleyball players highlight the massive cultural divide between Western and Islamic women’s teams.”

Please don’t get us started on the headline. Please.

Elsewhere: You knew it was coming: The Foreign Ministry’s retort to The Economist’s “The Ruining of Egypt” is at last out. Read it here on the MFA blog: “The Ruining of The Economist.”

Bloomberg took note of the CBE statement (pdf) we reported on yesterday showing foreign currency reserves have fallen to USD 15.5 bn, largely on debt servicing, pointing out this represents the lowest level in 16 months, as illustrated in their chart. That’s the lowest in 16 months, not 16 years, Al Mal.

And, finally, Live Science investigation found that over USD 143 mn worth of Egyptian artifacts have been illegally smuggled to the United States since 2011, leaving in their wake pillaged historical sites, murdered antiquities guards, and mummies left to rot in the sun. Worse yet, children were used for looting and were forced to work under harsh conditions. "Children have been used primarily to reach small burial shafts and tunnels. Unfortunately, many children have lost their lives in the process," wrote Monica Hanna, an Egyptologist working with Egypt’s Heritage Taskforce.

The economics-focused columnist who goes by the pseudonym Newton penned a piece for Al Masry Al Youm to say that economic development begins with putting the right policies in place rather than focusing on implementing large projects. Not all projects can be assessed using traditional feasibility studies, he says, with an indirect nod to the Suez Canal development projects; for some, the indirect non-monetary benefits outweigh most financial costs. However, for Newton, the negotiations with the IMF are key, as they will set the economic policies for the whole country and this is a chance to liberate Egyptians from “poverty” and “despair.”

Meanwhile, AUC economics professor and author of “Whatever Happened to the Egyptians?” Galal Amin offers a hard-to-follow analogy for Al Ahram, comparing Egypt and the IMF to person who won’t stop drinking and smoking, and the latter to a physician who offers medicine he knows won’t fix the problem — and wants to sell your kidney.

Makram Mohamed Ahmed, a columnist widely seen as close to the Sisi administration, writes for Al Ahram to underscore that Tiran and Sanafir islands are not Egyptian. Ahmed cites geographical maps that he claims prove Saudi Arabia’s historic sovereignty over the two specs in the Red Sea.

Egypt is a logical choice as a regional gas export hub: Writing for the Financial Times, 29-year BP veteran and Kings College London visiting professor Nick Butler argues that Egypt is a more politically stable and reliable partner than Turkey for those looking to forge a regional gas trading hub. (Read Does Egypt’s gas hold the answer to the new ‘Eastern Question’?, paywall)

The image that the Daily Mail can’t get enough of: An image which many of our readers have likely already seen or heard about, Egypt v Germany, Women’s Beach Volleyball, Rio Olympics. Players pictured: Doaa Elghobashy and Kira Walkenhorst. (View image)

The infamous Glengarry Glen Ross sales pep talk scene — a motivational speech, of sorts. Alec Baldwin, Kevin Spacey, 1992. “What’s your name?” “[Redacted]. That’s my name.” (Watch, running time: 7:08) (Don’t play this one if the kiddies are within earshot.)

A delegation of up to 100 English companies led by UK trade envoy to Egypt Jeffrey Donaldson are set to visit Egypt next month, sources within the British Egyptian Business Association (BEBA) told Al Borsa. Egypt is also set to send its own delegation to the UK in October, sources added. Egypt and the UK are expected to sign a trade agreement to replace the previous Egyptian-European agreement, secretary general of the Egyptian British Chamber of Commerce Taher El Sherif said.

Lucio Barani, leader of Italy’s Liberal Popular Alliance-Autonomies bloc, is heading a delegation visiting Cairo to discuss Egyptian-Italian relations. He said at a press conference on Sunday (Arabic, 28:46) that he will call on Italian authorities to lift Egypt travel warnings and resume the sale of F-16 parts to Cairo. He added that an press conference will be held in Rome on Wednesday to discuss outcomes of the delegation’s visit. “Egypt and Italy should not continue paying the price for a terrorist act,” the Egyptian European Council’s Mohamed Abou El Enein said, referring to the murder of Cambridge PhD student Guilo Regeni in Cairo earlier this year.

Readers may recall Lucio Barani was previously suspended from the Italian senate last year after being accused of making obscene gestures at a female Senator. “The alleged gestures enraged other senators, plunging the chambers in chaos.” Barani denied making the gestures. The Liberal Popular Alliance-Autonomies bloc, a pro-government alliance, controls 8 out of 630 seats in the lower Chamber of Deputies and 18 out of 315 seats in the Italian Senate.

Members of the House of Representatives rejected a resolution by the Irish parliament calling on Egyptian authorities to release Irish-Egyptian dual national Ibrahim Halawa from prison in a statement on Sunday, Ahram Online reported. Halawa was detained in the “El Fath Mosque clashes” in 2013.

Twenty Thailand-based companies have been unable to register their products at the General Organization for Export & import Control (GOEIC), the Thai Embassy told Al Borsa. GOEIC has not responded in over four months, said deputy commercial attaché at the Thai Embassy Sherif Yehia. The delays could be part of the Trade and Industry Ministry strategy to curb imports with domestic alternatives, Yehia speculated. GOEIC Chairman Alaa Abdel Karim said the authority has received no applications from Thai companies.

The Foreign Ministry is investigating the kidnapping of 27 Egyptians in Libya, Foreign Ministry Spokesperson told Al Ahram. The ministry has been in contact with all affiliated parties since news reports emerged on the kidnapping.

Cyprus’ Foreign Minister of Foreign Ioannis Kasoulides is in Cairo and will hold a joint press conference with foreign minister Sameh Shoukry tomorrow, Al Mal reports.

The Oil Ministry has managed to revise petroleum-product supply agreements, including LNG, to allow for payments to be extended to 90 days from the originally contracted 30 days. Extending the payment period as much as possible in order to be able to collect the required amounts.

General Electric expressed a willingness to increase its investments in Egypt in transportation projects, wind power plants, clean coal electricity generation. The news came from a meeting between GE CEO for MENA and Turkey Nabil Habayeb and Prime Minister Sherif Ismail on Monday. Members of the cabinet economic group also attended. Ismail urged General Electric to source more components in Egypt, Ahram Gate reported.

Metal packaging manufacturer Ball Corporation is studying investing USD 60 mn into building a third production line in Egypt, Trade and Industry Minister Tarek Kabil told Al Mal. The company currently invests EGP 840 mn in producing 1.1 bn aluminum cans per year, 35% of which are exported, the minister said. Kabil called for the company to increase the portion of its inputs sourced locally to over the current 15% by cooperating with the Egypt Aluminum Company. In an attempt to entice the company to expand operations in Egypt, Kabil noted that the FX shortage should be over soon.

The Health Ministry is extending to October the deadline for pharma companies to make 1,400 treatments priced under EGP 30 available in the market, Al Borsa reports. The original deadline was August. The health ministry had set a 90 day deadline to get products on store shelves after Cabinet approved a 20% price hike on SKUs priced under EGP 30. Failure to make the deadline would see the price hike rolled back. The decision has largely failed to have the desired effect, with sources saying Prime Minister Sherif Ismail is considering scrapping the plan altogether. This comes at a time when pharma companies have threatened that supplies of treatments over EGP 30 will be curtailed if the government does not allow price hikes.

The Egypt-Japan University of Science and Technology (E-JUST) is investing EGP 5 bn over four phases until 2021, University President Ahmed El Gohary told Al Mal. The EGP 1 bn first phase involves seven buildings over an area of 200 feddans, including buildings for the faculties of engineering, economics, and Japanese studies, as well as a library, student services building, and administration. The first phase is expected to be completed in July 2018, with its official launch in September of the same year.

Rofayda Health Park is looking to build an EGP 250 mn pediatric hospital next to its headquarters in Sheikh Zayed, managing director Amira Idris told Al Borsa. The new hospital will include 20 beds over an area of 2,500 sqm, she added.

The first group of Polish tourists since the Russian Metrojet crash last fall will land at Sharm El Sheikh Airport on Tuesday night, said Islam Nabil, head of the Tourism Development Authority in Sharm El Sheikh, Al Shorouk reports. He added that regular weekly flights to the resort area should resume “until the end of the tourism season.” Poland’s Foreign Ministry advises (Polish) against travel to all of Egypt with the exception for the Red Sea resorts and Sharm and it is unclear if and when they had instituted a ban on travel to these resorts since the Metrojet crash.

Passenger car sales plummeted by 26% during 1H16 to 70,800 vehicles, down from 95,000 cars sold during 1H15 as the FX crisis weighed on the sector. However, Hyundai and Nissan maintained their positions as first and second in the market, with Hyundai’s market share rising to 28.3% and Nissan’s to 14.4% compared to the 23.9% and 10.4%, respectively, during 1H15. Chevrolet’s market share declined slightly to 10.2% from 10.8% y-o-y. Bus sales fell by 29.7% during the same period to 11.8k vehicles, down from c16.7k vehicles in 1H15. Fortunately, that includes microbuses.

CI Capital Asset Management is looking to grow AUM 11% by year’s end. The firm, which currently has EGP 9 bn under management, is in the running to manage a new real estate investment fund that will be launched by two unnamed private banks, managing director Amr Abol-Enein told Al Borsa.

The Federation of Egyptian Industries (FEI) has announced the election of the first board of its Real Estate Development Division, Al Borsa reports. The FEI formed the chamber following a 2015 ministerial decree aiming to foster the sector’s activity.

The Egyptian Financial Supervisory Authority has issued the third edition of corporate governance guidelines in cooperation with the Egyptian Institute of Directors, EFSA said in a statement (Arabic). The guidelines are the first update since 2005 and represent the general framework for best international practices in private and public companies, said EFSA chief Sherif Samy. Samy said the guidelines will be worked into both new legislation and any regulatory changes or decisions.

Giza Criminal Court has lifted a travel ban on Mubarak-era Prime Minister Ahmed Nazif and his family, Al Masry Al Youm reports, adding that his assets have been unfrozen. Nazif was acquitted on corruption charges in May.

Zamalek beat Al Ahly 3-1 to clench the Egypt Cup in Alexandria. The rivals will face each other in the Egypt Super Cup which is expected to take place in the UAE this October, according to Ahram Online.

Ever wonder what it would be like to watch an Olympic match — if the games were hosted in Egypt? Brazilians are the Egyptians of South America: “‘Brazilians are like this,’ Kumahara said afterward. ‘They are always happy, always making fun of everything. This is normal for them.’” Brazilian fans are cheering — and jeering — loudly this Olympics, prompting many shushings from referees. Read: “Sports Etiquette? Ha! Brazilian Fans Just Want to Have Fun.” And, apparently, jeer and make fun of people. Sound a bit like us?