Merry Christmas, Enterprise readers and happy boxing day. We hope all those celebrating the day had a wonderful time with family and friends. We’d like to start off first by thanking all our friends who have wished us well over our extended, end of year break. They really made our day.
As we are still in need of recovery after an exciting year, we’ll be running shorter issues for the next few days. We’ll be off for New Years and return to our regularly scheduled programming next week.
We’ve been good this year: As the countdown to the new year begins, we have a lot to be thankful for this year. Not least of which was our economy finally looking like it’s turned a corner after a six years of turmoil. GDP for 1Q2017-18 reached 5.2%, up from 3.4% in FY2016-17, while the overall budget deficit declined to 2% of GDP. Annual inflation dropped below the 30% mark in November for the first time this year to 26%. Zohr has officially launched production and tourism has weathered the instability of a Russian travel ban.
So Santa better come through next year: Going into 2018, we have a lot to be excited about. Zohr’s launch of production means that we are set to reverse the energy environment and begin exporting gas. With inflation now under steady control and a continued projected decline, we anticipate interest rates will come down again. And to top it all off, flights from Russia are expected to come back in February.
We had some interesting IPOs this year, including the highly successful Ibnsina Pharma IPO, and thrilling M&As, such as the sale of the National Company for Maize Products to Cairo Three A. The pipeline next year looks good, especially considering that it is the first year of te state IPO program. We have more in the Speed Round.
Throw in elections and the first year of a new national health insurance program, and we have a lot to look forward to.
On to the news: Egypt will receive USD 2 bn in the third tranche of the IMF’s USD 12 bn loan this week. The fourth USD 2 bn tranche is set to arrive in June or July, Vice Minister of Finance Ahmed Kouchouk announced on Saturday, according to Reuters. He also said an IMF mission would visit Egypt in May for a new review, upon which the tranche’s disbursal is likely contingent. The third tranche of USD 2 bn, which is set to be received this week, will be used for budgetary support, a source at the central bank told Al Shorouk. Once the fourth USD 2 bn portion is disbursed, total amount of funding Egypt will have received from the IMF will be USD 8 bn.
Threat to US aid to Egypt? US President Donald Trump has threatened to withhold “bns” in US aid to countries that voted in favor of a UN General Assembly resolution rejecting his recognition of Jerusalem as the capital of Israel, The Guardian reports. “The warning appeared aimed largely at UN members in Africa, Asia and Latin America who are regarded as more vulnerable to US pressure… Egypt, which drafted Monday’s UN security council resolution which the US vetoed, is particularly vulnerable, receiving USD 1.2 bn in US aid last year.” 128 countries voted in favor of the UNGA resolution, 9 against, with 35 abstentions. The UN News Centre says “by an overwhelming majority, Member States in the United Nations General Assembly on Thursday ‘demanded’ that all countries comply with Security Council resolutions regarding the status of Jerusalem.” Worth noting that “resolutions in the Assembly are non-binding and do not carry the force of international law as do measures agreed in the Security Council.” The US Mission to the UN insisted the US embassy will be moved to Jerusalem, with Ambassador Nikki Haley saying “no vote in the United Nations will make any difference on that. But this vote will make a difference on how Americans look at theUN, and on how we look at countries who disrespect us in the UN.”