Why we’re smiling this morning #1: The VAT exec regs are done. The guys at the Finance Ministry have finished the executive regulations for the value-added tax. It’s no secret that we’re fans of Amr El Garhy and his team — nor were we shy in saying we wished the regulations were out earlier. The finalization of the regulations is very good news indeed. What’s more, it seems the Tax Authority may allow companies to recognize some of the cost they incurred sourcing FX on the parallel market. We have more on this in Speed Round, below. Separately, we’re also hearing rumblings from government that the notion of raising tax rates and / or moving to a so-called “progressive tax system” is a creature of the House of Representatives, not of the ministry, and is not being led by cabinet.
Why we’re smiling this morning #2: IFC pledges USD 2 bn over three years, will “bring other investors here,” declares Egypt a “priority country.” International Finance Corporation chief Philippe Le Houérou ended his three-day visit to Egypt with a pledge that the institution would invest USD 2 bn in Egypt over three years — and finalized investments of at least USD 32 mn while here, including a USD 10 mn commitment to Algebra Ventures and USD 20 mn in equity financing for Hassan Allam Holding. Le Houérou “described Egypt as a priority country” to which the IFC has committed USD 1.5 bn since 2011 to support private-sector businesses, according to an emailed statement (pdf). “Egypt has tremendous long-term potential, given its large workforce, strategic location, and well-established manufacturing sector,” the IFC chief said. “The country’s recently announced economic reforms will help it capitalize on that promise-by breathing new life into the private sector, which can drive innovation and employment, and create lasting opportunities for all Egyptians.” The IFC’s Egypt landing page is here if you want more.
Flat6 lands IFC commitment: Our friends at Flat6 Labs have landed the IFC and the Social Fund for Development (SFD) as the lead investors in their EGP 75 mn Egypt-focused venture capital seed fund, Flat6 CEO Ramez El-Serafy said in a statement (pdf). IFC have committed USD 2 mn, the announcement said. Flat6’s Egypt fund will invest in up to 20 startups a year with an average seed investment of EGP 350k. “We’re very excited to have received the support of IFC, through its Startup Catalyst program, and the SFD, through its first investment in an accelerator program,” El-Serafy.
Why we’re smiling this morning #3: Momentum. We’re reading the House of Representatives giving preliminary approval to the bill that will deregulate the natural gas industry as a sign the House is willing to play ball on the most critical, business-friendly components of the Ismail government’s agenda. More in Speed Round.
Crédit Suisse names Egypt one of its 10 “focus” frontier markets. The investment bank has made Egypt one of its “Crédit Suisse Frontier Markets 10” (going by the ungainly moniker “CS FM10”) alongside Argentina, Bangladesh, Iran, Kenya, Morocco, Nigeria, Pakistan, Romania and Vietnam, the Wall Street Journal reports. These are the most promising of the 30 frontier markets CS covers, according to a report the bank issued last week. “This group of developing nations situated across four continents includes collectively represent between three-quarters and four-fifths of the total economic, demographic and equity investment opportunity set.” The full Crédit Suisse report is available for download here (pdf).
Not enough pdfs for you? Control Risks’ annual political and security risk infographic is out and available for download. No surprises here.
Random fact of the morning: Of 350k migrants who have arrived in Europe so far this year, 170k came from routes that pass through or leave from Egypt or Libya. The balance arrived from Turkey or the Eastern Med, according to Deutsche Well.