MPs look set to call for constitutional amendments today

Plus: Day 1 of our 2019 Enterprise CEO Poll

** Our 2019 Enterprise CEO Poll kicks off this morning. We’ll have 12 top executives speaking over the course of this week in industries ranging from financial services to health, education, construction, energy and law. We are running the interviews all week long in the place of our industry news section, which will return next week.

Egypt has been doing well in 2018 relative to its regional peers, but much more needs to be done. CEOs are looking at the macro challenges in particular, paying considerable attention to inflation, interest rates and foreign direct investment. With many seeing further subsidy cuts this year and inflation remaining a challenge, many are not as optimistic for interest rate cuts this year. Nonetheless, the CEOs see a number of sectors growing, particularly food and consumer goods, while expressing optimism for the tourism sector. And yes, all are giving raises to their teams this year.

The format: Each CEO answered roughly the same set of questions, tailored only for their industry. The Q&A interviews have been condensed and edited for clarity and are presented in “as told to” format — that’s journalism speak for “in their own words.”

Today’s participants are:

• Osama Bishai, chief executive officer, Orascom Construction
• Hend El Sherbini, chief executive officer, Integrated Diagnostics Holdings

The 2019 Enterprise CEO Poll begins after Egypt in the News, below.

Politics is going to drive the conversation on Egypt this week as a group of MPs associated with the largest, pro-administration bloc in the House looks set to introduce legislation that could amend the constitution. Up for discussion: Extending presidential terms to six years and bringing back the old upper house of parliament. We have chapter and verse in this morning’s Speed Round, below.

Next tranche of IMF loan coming soon? The IMF’s executive board will meet tomorrow to decide on the fifth USD 2 bn tranche of Egypt’s USD 12 bn extended fund facility.

The new EGX30 Capped Index debuts this morning alongside the rebalanced EGX30. Again, we have more in this morning’s Speed Round, including the list of who is off the index and who is on.

Stocks are starting February on a high note: After plunging more than 13% last year amid the Emerging Markets Zombie Apocalypse, the EGX30 gained nearly 8.4% last month.

Also this morning:

• German Economy Minister Peter Altmaier is in town and looks likely to meet with President Abdel Fattah El Sisi. A heads-up from the wires suggests Altmaier will sign unspecified “economic and energy policy agreements.”
• Al Tayeb, Pope Francis to meet in Abu Dhabi: Al Azhar Grand Imam Ahmed Al Tayeb is in Abu Dhabi today for an interfaith summit with Pope Francis, reports Al Masry Al Youm.

Goldman Sachs is withholding mns due to be paid to former CEO Lloyd Blankfein as the 1MDB scandal bites. The investment bank is holding off on paying three top executives pending investigations in Malaysia into Goldman’s alleged involvement in corruption related to the state investment fund, the Financial Times reports. Reuters also had the story.

The US Fed’s move to leave interest rates on hold is the beginning of a policy U-turn that should direct our focus to market concerns, Michael Mackenzie writes for the Financial Times. It is “hardly a shock” that the Fed changed its direction from signaling more rate hikes to “listening to markets” as the world economy slows and the US economy shows signs of weakness, Mackenzie says, noting that “detecting signs of trouble before they hurt the broader economy is exactly what central banks should do.”

The potential for a new constitutional debate dominated the airwaves last night. We have the full story on the proposed amendments in Speed Round, below, including links to snippets from the talkshows.

The government will until its draft FY2019-20 state budget in the House by the end of March, Finance Minister Mohamed Maait said on Hona Al Asema (watch, runtime: 02:48).

Maait stressed that the government will not impose new taxes (watch, runtime: 03:37).

The OECD’s decision to raise Egypt’s rating on the country risk index is the fruit of Investment Minister Sahar Nasr’s efforts to highlight the country’s progress on its economic reform program, General Authority for Freezones and Investment head Mohsen Adel said on Hona Al Asema (watch, runtime: 06:19).

A group of MPs is expected to introduce legislation today that could see President Abdel Fattah El Sisi serve another two years in office. The lengthening of presidential terms to six years from four is part of a package of amendments to the constitution that could be unveiled on the floor of the House as early as this morning, Rep. Mahmoud Badr said yesterday, according to Al Shorouk. Members of the pro-government Support Egypt Coalition and other MPs are looking to introduce amendments that would:

• Have presidents serve six-year terms, up from four years at present;
• Create positions for one or more vice presidents;
• Bring back the Shura Council, historically the upper house of parliament;
• Introduce a 25% quota for women in parliament.

Reuters also has the story, ensuring the debate will drive the conversation on Egypt in the international press this week.

So, how will this work? The introduction of legislation must be approved in principle by a majority of MPs in a general assembly session, after which the House Legislative and Constitutional Committee will formally draft the proposed amendments, constitutional expert Salah Fawzy said, according to Al Shorouk. The amendments will then be put up for discussion and a vote in the general assembly, where they must be approved by at least two-thirds of the House. Once parliament signs off, the president would be required to call a referendum.

Will the House agree to debate the amendments? Yes, argues Ahram Online, where parliamentary affairs reporter Gamal Essam El-Din notes that one-fifth of the House’s 596 MPs will need to give a thumbs up to the motion for it to move forward. The House general assembly was due to take this week off, but Speaker Ali Abdel-Aal said last week that a session would be held today and that all MPs should attend because “we are expected to discuss important things.”

The potential debate of constitutional changes dominated the airwaves last night. The constitution as it currently stands needs “dramatic changes,” Rep. Mohamed Abu Hamed told El Hekaya’s Amr Adib. The House of Representatives will initially discuss 17 articles to amend, with the possibility of further expanding the scope of amendments, he said (watch, runtime: 05:52). Rep. Mahmoud Badr gave Adib a full rundown of the proposed amendments and the process necessary for their inclusion in the constitution (watch, runtime: 06:40). Masaa DMC’s Eman El Hosary also took note (watch, runtime: 01:45).

The stock exchange will launch a new index today: The EGX30 Capped puts a 15% limit the weight accorded any one security, according to an EGX statement (pdf). Capped indices are calculated in much the same way as regular ones, but prevent high freefloat capitalization stocks from causing disproportionate swings in the index. The measure will replace the narrower EGX20 Capped. The bourse issued a short guidebook on Thursday outlining its methodology (pdf).

The composition of the EGX30 is a bit different this morning after the exchange swapped eight companies in its regular rebalancing. The full rundown on the rebalancing is here (pdf).

IN: GB Auto, Oriental Weavers, Sarwa Capital, Kima, CIRA, Arabia Investments (Istithmaraat), Orascom Development Egypt, Arab Company for Asset Management.

OUT: Porto Holdings, Egypt Aluminum, Ibnsina, Edita, Orascom Construction, QNB Alahli, Sidi Kerir Petrochemicals, Abu Qir Fertilizers

EXCLUSIVE- Egypt could issue a sukuk worth USD 1-1.5 bn in FY2019-20: The government could issue a sovereign sukuk (a form of Islamic bonds) in FY2019-20 for the first time, a senior government official tells Enterprise. The maiden issuance could be worth USD 1-1.5 bn and would be a test of investor appetite for the debt instrument. The government is widely optimistic about the market for sukuks and expects to rely on the bonds as a form of borrowing down the line.

FinMin kicking off Asia eurobond roadshow this month: Separately, the Finance Ministry could begin as early as mid-February a roadshow in Asia for Egypt’s upcoming international issuances, our source says. The ministry is planning to sell between USD 3-7 bn in USD- and EUR-denominated bonds, in addition to green bonds and Egypt’s first JPY-denominated bonds. The ministry expects to kick bring the Yen-denominated bond issuance to the market first, but the choice of which issuance to begin with will depend on the outcome of the roadshow and input from the investment banks the ministry has hired to advise on the issuances.

Background: The Finance Ministry had presented an initial draft of next fiscal year’s state budget to President Abdel Fattah El Sisi last month in which it set a revised debt target for the country. The ministry has also drafted a comprehensive debt control strategy that will aim to reduce Egypt’s public debt to 72-75% of GDP by 2021-22 from 98% today, a government source had told us. The strategy, which is currently pending sign-off from Cabinet, plans to diversify Egypt’s sources of borrowing through the introduction of new instruments, including sukuk.

Egypt wants to be included in JPMorgan’s emerging-market bond indexes as part of a strategy to cut borrowing costs and boost inflows in the debt market, Finance Minister Mohamed Maait told Bloomberg on Thursday. The business information service also says the government is looking to finalize by June an agreement with Euroclear that would “make it easier for foreigners, who currently have to go through a local bank, to invest in EGP-denominated debt.” (Plenty of background here, for those so inclined.) Egypt now offers the second-highest in emerging markets, behind only Argentina.

Egypt ETFs among best performers in emerging markets: Egyptian shares and exchange-traded funds (ETFs) are performing fairly better than their emerging markets peers, ETF Trends reported. The VanEck Vectors Egypt Index ETF (EGPT) is up 13.9% year-to-date, compared to the 8.7% gain in the MSCI Emerging Markets Index. The move in Egyptian stocks is fueled by speculation that the central bank will cut interest rates at its MPC meeting on Valentine’s Day.

OECD raises Egypt’s rating as investment-friendly destination: The Organization for Economic Co-operation and Development raised Egypt’s rating on the country risk index to five from six to become an investment-friendly destination, according to an Investment Ministry statement. The upgrade, which we were promised last month, will help attract investment, the ministry said.

Egypt’s M2 money supply grew by 13.3% y-o-y in December, slowing slightly from 14% the previous month, CBE data shows. The country’s money supply stood at EGP 3.63 tn at the end of the December 2018, up from EGP 3.2 tn a year earlier. The figures show that the downward trend experienced over the past few months continued into the final month of 2018. Money supply growth slowed to 15.4% in October and 14.04% in November. M2 is one of several ways of measuring the quantity of money in the economy, and uses liquid assets such as cash, savings deposits and money market securities as a basis for its calculations.

EFG Hermes topped the EGX’s brokerage league table for January with a market share of 18.5%, according to figures released by the EGX (pdf). CI Capital came in second with a 13.1% market share, followed by HC Securities (5.6%), Beltone Financial (4.6%) and Pharos Holding (4.1%).

M&A WATCH- Saudi’s Olayan acquires 5 mn Qalaa Holdings shares for EGP 19 mn: Olayan Saudi Investment Company (OSIC) has bought 5 mn Qalaa Holdings shares at 3.82 per share, EFG Hermes said in an EGX disclosure (pdf). OSIC now owns 5.17% of Qalaa, up from 3.71% previously. EFG acted as advisor in the EGP 19 mn transaction. Qalaa shares closed at EGP 3.60 on Thursday, according to market data from Reuters.

MOVES- Telecom Egypt has appointed Adel Hamed (bio) as its new CEO and managing director, replacing Ahmed El Beheiry effective immediately, the company said in a statement on Thursday. Hamed has been with the state-owned telecom company since 1999, and was appointed as the general manager for international and wholesale business operations in 2008 before becoming chief international wholesale officer in 2017.

INVESTMENT WATCH- Sanofi plans to increase investments in Egypt by 50%: French pharma giant Sanofi is planning to increase its investments in Egypt by 50% this year, Head of Africa Jon Fairest told Extra News (watch, runtime 4:02). The announcement came amid a flurry of agreements and announcements that accompanied French President Emmanuel Macron’s visit to Egypt last week.

Lebanon is hoping to once again import natural gas from Egypt under the terms of a 2009 gas supply contract, Lebanese Energy Minister Cesar Abi Khalil said at a meeting on Thursday with Oil Minister Tarek El Molla, according to a ministry statement. Khalil did not provide a time frame for the potential move. France’s Total is due to begin drilling for natural gas in Lebanon’s offshore concessions later this year as part of the Lebanon’s plans to become a natural gas producer itself in the near future.

The Zohr field produced 12.2 bcm of natural gas in 2018, Russian energy giant Rosneft said on Thursday. The company, which holds a 30% stake in the Shorouk concession, reported that production in 2H2018 totaled 9.1 bcm, an almost three-fold increase from the 3.1 bcm produced in 1H2018. Field operator Eni expects output to continue its rapid rise in 2019, reaching 2.7 bcf/d by July as it adds new wells to production and brings the sixth gas processing facility online.

Zohr is key to Eni’s Middle East ambitions: As output continues to rise, Zohr is “key” to Eni’s broadening ambitions in the Middle East, Reuters says. In the nine months since it sold a 10% stake to Mubadala, the Italian company has inked multiple nine-figure upstream agreements with Gulf countries. “Zohr was used as a way in,” Mediobanca oil analyst Alessandro Pozzi told Reuters. “Since then the group has ramped up operations lightning fast in an area that has some of the world’s biggest resources.”

El Sisi ratifies agreement with Moscow to build the RIZ: President Abdel Fattah El Sisi has ratified a 50-year agreement with Russia to establish the USD 7 bn Russian Industrial Zone, according to a copy of the decree published in the  Official Gazette. Signed in Moscow in May last year, the agreement grants Russian companies rights to develop a 5.25 mn sqm stretch of land in the Suez Canal Economic Zone, giving them a jumping off point to export to the rest of the region.

JUSTICE WATCH- 26 state officials face corruption charges for their alleged involvement in the “seizure” of public funds worth an estimated EGP 67 mn, reports Ahram Online. Separately, the Public Prosecutor’s Office ordered the detention of three state officials for 15 days pending investigations into charges of graft worth EGP 500 mn, according to Ahram Gate.

JUSTICE WATCH- Cop accused of murdering Copts faces death penalty: A criminal court has transferred the case file of a policeman charged with murdering a Coptic man and his son to the Grand Mufti to approve a death sentence, Reuters Arabic service reports.

National waste management program kicks off in April: The EUR 250 mn first phase of the government’s national municipal waste management program is scheduled to kick off in April, Amwal Al Ghad reports. The program aims to set the standards for and raise awareness on the safe disposal of waste.

Egypt-Sudan electricity linkage trials delayed to March: Trial operations on the first 100 MW phase of the USD 60-70 Egypt-Sudan power interconnection project have been delayed to March due to delays from India’s Larsen & Toubro in completing construction, Electricity Ministry sources said. Trial operations were scheduled to begin this month.

Egypt will assume the presidency of the African Union on 10 February, according to an Ittihadiya statement.

King Tutankhamun’s tomb has just undergone the most extensive restoration since its famed discovery in Luxor’s Valley of the Kings nearly a century ago. The Los Angeles-based Getty Conservation Institute, which completed the work, spent close to 10 years to see the process to completion amid delays caused by the January revolution (watch a video report by Reuters, runtime: 01:17). King Tut’s belongings — jewelry chests, weapons, disassembled chariots, and his gold coffin and death mask — have been relocated to the Grand Egyptian Museum, and are no longer on site. But the tomb is still home to the Pharaoh’s coffin, sarcophagus, and mummy and decorated frescoes covering the walls and ceiling — all of which were restored to their pre-damage conditions.

Topping coverage of Egypt this morning is the unveiling of an ancient Ptolemaic era burial site in Minya housing 50 mummies, as reported by Reuters and The Telegraph, among others. The story is picking up steam in the foreign press as the BBC looks at the role women explorers played in Britain’s fascination with Egyptian mummies a century ago, and the inspiration those collections are giving up-and-coming women archaeologists.

Supreme Constitutional Court abolishes government’s power to disband NGOs: The Supreme Constitutional Court issued a ruling on Saturday deeming a law that allowed the Social Solidarity Ministry to dissolve NGOs as unconstitutional, Anadolu News Agency reported. The decision, which is final and cannot be appealed, also ruled that the administrative authority can only intervene in NGOs’ affairs after receiving a court ruling. The government is currently in the process of reviewing the contentious NGOs Act, which has widely been criticized for choking civil society.

Egypt’s engagement with Africa ahead of assuming the African Union presidency later this month is once again at the forefront of the country’s three main state-owned dailies (Al Ahram | Al Gomhuria | Al Akhbar).

Osama Bishai has been around the block. He joined Orascom Construction (OC), where he serves today as CEO, in 1985 and became managing director of the group’s construction line of business in 1998. He has led growth over the years in the company’s cement, infrastructure and industrial businesses and led the development of OC’s investments in the fertilizer industry in Egypt, Algeria and the United States. Today, he’s spearheading the Group’s expansion into more international projects, particularly in the United States, while creating a long-term concessions portfolio both at home and abroad. OC is a leading global engineering and construction contractor with operations spanning the Middle East, the United States and the Pacific Rim. The company’s shares are listed on Nasdaq Dubai and the Egyptian Exchange.

For Egypt, 2018 was a good year as far as volume of work and output. Egypt still has the challenges of timely payments, inflation and associated concerns in that regard, but the big picture is fine. We would have hoped to see more foreign investors coming into the country. We haven’t seen a lot of those. We had hoped to see certain investor-related decisions taken — we have not seen that either. We hope that next year the mindset will be to focus on bringing foreign investors to the country, not only through the stock market or financial instruments — we want to see direct investors that are coming in and investing and creating jobs.

Egypt remains the region’s top construction market. As for the wider Middle East, nowhere else in the region had the same construction activity as Egypt, so we didn’t see a very active Middle East market last year. But we still see opportunities in the region, particularly in the Gulf, Iraq, and Algeria.

Construction companies plan at least a year ahead. We see enough work in the pipeline — not only in Egypt, but in the region, and in the US, where we also have operations, so we’re quite comfortable. That’s not to say we aren’t a little anxious about what may or what may not happen.

I think funding will become one of the biggest challenges of 2019. There are projects we would decide not to pursue — or contracts we wouldn’t sign — if there was a question mark on the funding. As for resources, we’re always working to attract and maintain the best people. If we talk about the macro picture, 2019 has a lot of challenges. Egypt gets a share of what happens as a result of the international mood; we’re not isolated from the global economy, so investment in general could be slightly slower as a result of current market conditions. We want foreign investors and the industrial world to look at Egypt as a market with potential. We have 100 mn consumers and we have a lot to do in terms of infrastructure and developing the country’s output in general, so there’s still so much to do.

Then there is inflation. All the new contracts that we signed over the past 12-18 months have provisions to account for inflation, whether as escalation formulas or direct compensation for particular increases in fuel, for example, or we make our own assumptions to give us breathing room.

If we’re able to innovatively work on creating funding tools, we’ll be able to create opportunities for ourselves. This is something we’ve done before on several occasions, and it’s something we can do again and again across the region. We have a very a strong team that makes us able to put together packages to fund certain projects, but obviously these projects have to be bankable.

With a large youth population that is constantly growing, infrastructure is an endless exercise in Egypt. There is a continuous need for infrastructure — not only in terms of electricity and roads, but also water, sewage, and pipelines. These things are important for investors to see that they’re putting their money somewhere that is well-served in terms of utilities and infrastructure. It’s also quite important to improve the quality of life for the population.

As a company, we have a lot of tools when it comes to employee compensation. We try to match or compensate for the impact of inflation on an annual basis. We’re operating to produce value for shareholders, so the profitability of the company also reflects directly on people’s compensation, whether that’s bonuses, salary adjustments, or retention tools. And our compensation policy definitely takes into consideration each employee’s performance. So yes, we are giving raises for 2018 performance. We have to.

Interest rates are the biggest challenge we face. We don’t see investors looking at aggressive expansion because interest rates are quite high. It also affects business because sometimes there are clients who don’t pay their dues immediately, meaning we have to borrow until we get paid, which creates a burden on the project’s results. So obviously, we would like to see a change in rates.

I’m not an expert to speculate when rates will come down, particularly because there are factors like the strengthening USD and higher US interest rates that the CBE has to take into account.

As a construction group, our investments are targeted. At the end of 2017, we invested in a wind farm and are waiting to see if we can finish the necessary studies and government paperwork. If we do that this year, that will probably be one of our investments in 2019. We’ll continue to invest in concessions, which have certain criteria and returns, as well as in infrastructure, obviously. We’ll look at those markets — not just in Egypt, but also in the region and in Africa — if we have something that will give us the required returns. But when it comes to investment in terms of expansion as a contractor — buying equipment and otherwise getting additional resources — we do that everyday.

The consumer industry is always performing. The Egyptian consumer will outperform in 2019. Inflation may have affected consumption of big ticket items, but not food. At the end of the day, people have to spend money to eat, so consumption is good. Contractors and construction firms should be making reasonable returns as well with all of the ongoing construction projects in the country.

Healthcare and pharma will also probably continue to perform well. Health ins. coverage is increasing as far as numbers go, so we hope to see more hospitals being built. As for pharma, it’s an area of potential growth because, with a population of 100 mn people, a lot of SKUs are being imported now that could be manufactured locally.

Tourism has the potential to do well, but that depends on the mindset and direction of investors. We’re not yet seeing major investments in the tourism sector — there are hotels being expanded and renovated, but I’m not aware of any major new hotels being built other than those owned by the government. It’s important for Egypt to have growth in the number of available hotel rooms, whether high-, middle- or low-end for tourists. Tourism should be a sector with considerable potential for growth, considering how affordable Egypt is. The mindset there needs to change; investors and banks should be encouraged to focus their resources in this area.

How we see Egypt versus other economies in which we invest is a hard question. Egypt is quite unique, actually. You can look at somewhat similar countries like Mexico or Turkey, but really, they’re completely different. Mexico has a more liberal economy, and Turkey’s GDP per capita and industrial output are much higher than those of Egypt.

If I were to start a new business today, it would be in renewable energy. Waste management — whether getting rid of it or recovering something from it — is also very important in a country of Egypt’s size. The problem with waste is that it’s an expensive exercise. Recovering waste or creating energy from waste — you need technology and it’s expensive. That’s why you’ll see÷ waste management taking off in developed countries where government incentives make it more affordable.

The biggest question I get from investors? They’re worried about whether or not the government is supporting the private sector. Quite honestly, we hear a lot of positive words from the government, but there are few associated actions. Foreigners in particular also talk to us about the repatriation of funds, which today is no longer a problem, but it was an issue two years ago. Another question is the availability of qualified manpower.

Does Egypt have qualified manpower? We say that Egypt has ‘trainable’ manpower — people who learn fast and, if they’re well-compensated, they deliver. But finding high-quality qualified laborers, like technicians and engineers, that’s not easy.

But I would say the right question to ask is whether the environment welcomes private investors. Every day, we hear something new that tells us the answer is “no” — like a new lawsuit being filed, or a report that the government wants to seize the assets of tax evaders. There needs to be more caution with these statements because the media takes the punch line and that’s what reaches the rest of the world. Officials have to be more orchestrated and synchronized — if there’s a certain action that will be taken, statements have to be measured. That applies to companies, too — as a publicly traded entity, I need to be careful with what I say and make sure that I don’t overshoot or undershoot, but nobody does that.

What question will we be asking at the end of this year? Unfortunately, we’ll probably be asking the same questions again that we are now. FDI will still be an issue, inflation will still be there, and I’m not sure if interest rates will move. Egypt’s foreign debt levels will be a new topic this year, but for the most part we will be looking at the same lineup of issues.

What have you not asked me? The only thing I would say is that the media should help the government understand that we’re not alone in this part of the world. We’re competing, seriously, against other countries, not only in Africa, but outside the region, in countries in Latin America. The foreign investors we’re trying to attract can decide to invest today in Morocco or Egypt or Mexico or Turkey. Nobody should assume that people will think of Egypt as the place to invest. We should really start thinking how can we be more competitive? How can we be more appealing to investors? How can we create value to people working in this country? This is I think the most important thing that you should relay to your readers in the government or other stakeholders. I

Dr. Hend El Sherbini has been the CEO of Integrated Diagnostics Holdings (IDH) since 2012, when the company was formed following the merger of Al Mokhtabar and Al Borg Laboratories. Today, IDH is a leading consumer healthcare company in Africa and the industry leader in Egypt. El Sherbini, who had led Al Mokhtabar since 2004, took the company public on the London Stock Exchange in 2015 and now runs a group that spans from Egypt to Sudan, Jordan and Nigeria. This has not gone unnoticed by the global press, where she makes the rounds as one of the most powerful Egyptian and Arab women in business.

For my company, 2018 was the year of greenfield. For my industry, it was the year of awareness. With the launch of the 100 Mn Healthy Lives campaign nationwide, the government is focusing on healthcare, on preventing and treating Hepatitis C and other noncommunicable diseases like high blood pressure and diabetes and so on. I think this was a great initiative from the government and it really helped raise awareness about health.

For IDH and for healthcare, I think 2019 is going to be a year of consolidation. Healthcare is really expensive — the provision of quality services is really expensive, and to do that in a cost-effective way, you have to consolidate. Consolidation is the name of the game.

I think that the biggest challenge we’re going to have is going to be high inflation. But we’re used to that: It was already present in 2018. I think it’s going to still be there in 2019 as well. As for interest rates? I wouldn’t be surprised if they raised them again, but really I think they’ll be left where they are, which is obviously very high. For IDH, that’s not a problem given our business model. But for other investors and other people who are looking to get their financing from banks, that’s an issue. We haven’t taken on a lot of bank debt, so interest rates haven’t really been a problem for us.

We’re continuing to invest in healthcare. For us, in our core business, we’ve started to venture into radiology as a new, adjacent vertical, so we’re going to continue to invest more in radiology.

The biggest opportunity for IDH in 2019 is the increased awareness of health and healthcare, whether driven by government campaigns or simply more awareness. A rising tide floats all boats, in that respect: It’s good for IDH and the industry as a whole.

There is going to be significant growth in Egypt this year after the sharp economic reforms taken in 2017 and 2018. So I expect there’s going to be growth in the economy.

We raised salaries by an average of 15% based on individual performance, but it varies from person to person — that’s just for salaries. We also give bonuses based on annual profit, which is 10% of the overall profit of the company.

We’re doing greenfield expansion more than we’re doing M&A. In 2018, we did a mixed M&A-slash-greenfield, but we don’t have any M&A activity planned so far for this year. In 2018, we started working in Nigeria. It was the acquisition of a very small player, and we’re revamping the whole operation and opening new branches and so on. I call it greenfield because they didn’t really have market presence or market share to consider it an M&A. We also started our radiology activities in in Egypt this past October with the launch of a full-fledged radiology lab, and putting that under one group also counts as greenfield.

I like healthcare to outperform in 2019, but really, it is about the consumer. FMCG in general will outperform.

Underperform? I’m not an economist, but I think real estate is not going to see that much growth this year.

How does Egypt compare to other countries in which we invest? We have operations in Nigeria, Egypt, Jordan, and Sudan. If you compare Egypt to these economies, Egypt is much more stable, the growth rate is definitely higher in Egypt. In general, the environment here is more favorable for investment compared to these countries.

If I were to start a new business today, it would definitely be at the intersection of finance and tech. I think fintech is a great area in which to invest these days.

The most common question I’m asked by investors is, “What keeps you up at night?” For me, it’s nothing — unless I’ve been watching a horror movie late at night.

What question will we be asking at the end of 2019? For IDH, I think the question will be “What next? What’s the next step?” For healthcare, I see the main issue in healthcare is actually the lack of quality. We have a serious quality problem in Egypt, and we have to admit that. In terms of healthcare services — and I think this is going to be, and really should be — an area of major focus, because this is the essence of our industry.

The question you didn’t ask me: I was expecting you to ask me what my passion is, or what drives me to get up every day. My drive and passion are to be able to make a difference for the people we serve. That’s what factors into my decision for what’s next for my business. There’s also the question of how we can work together. I think that we need to work together to increase awareness and help the economy, because if you don’t have a healthy population then the economy really suffers. There isn’t enough awareness of preventive healthcare and how to stay healthy and productive and happy. And it goes hand in hand with the quality in healthcare.