Monday, 8 February 2021

We’re going to have to get used to the idea that covid is here to stay

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, friends, and welcome to a pleasantly brisk news morning to kick off what’s shaping up to be a gorgeous, sunny day.

THE BIG NEWS here at home? No single story from the world of business, public policy or foreign affairs is dominating the headlines, though you can expect the Israeli-Palestinian peace process to take over the news agenda later in the day as an Arab League summit gets underway. We have more below.

THE BIG NEWS AROUND THE WORLD is the growing acceptance that covid-19 is here to stay — that we are, after all, going to have to learn to “coexist” with it. That’s going to mean vaccinations for everyone; annual boosters; ongoing measures in the workplace, in restaurants and on planes; and a host of new ways of doing business. We have chapter and verse in the news well, below.

The case for (global market, and maybe economic) optimism this morning: “Asian shares hovered near record highs [this morning] while oil edged closer to USD 60 a barrel on hopes a USD 1.9 tn covid-19 aid package will be passed by US lawmakers as soon as this month just as coronavirus vaccines are being rolled out globally.” (Reuters)

*** We published the very first edition of EnterprisePM yesterday. It’s our quick catchup at 3:30pm CLT on the day’s news — and your guide to where to spend your time and money tonight. Yesterday’s headlines saw Speed Medical announce plans to acquire Six of October’s New Al Safwa Specialized Hospital in a EGP 185 mn transaction, and Tamweel Holdings unveil a EGP 500 mn securitized bond issuance planned for 2Q2021.

The 55th Super Bowl Sunday wrapped up on the other side of the Atlantic just a few minutes before we hit “send” on your morning read. The Tampa Bay Buccaneers bested defending champions the Kansas City Chiefs 31-9. If you’re a fan, you know where to get the post-game analysis. If you’re not a fan (but are a … gentleman of a certain age) you’ll still enjoy reading the epic Through genetics, luck or ‘prehab,’ Tom Brady endures at 43.

And for our readers in AgencyLand: CNBC and the WSJ’s CMO Today each have Youtube links to the ads that have played out on the air so far in what remains Madison Avenue’s biggest day of the year.

It’s the end of an era: Reagan administration secretary of state George Shultz, “a pillar of the Republican foreign-policy establishment whose diplomacy helped seal the end of the Cold War,” has died at age 100. The best obits so far: New York Times | Wall Street Journal | Financial Times.

Insead is back at the top of the Financial Times’ 2021 Global MBA ranking, dethroning Stanford, which — along with Harvard and Wharton — suspended its participation in data gathering due to the pandemic. London Business School, the University of Chicago: Booth, Iese Business School, and Yale School of Management round out the top five.

WHAT’S HAPPENING TODAY-

Egypt is heading up an emergency Arab League ministerial-level meeting today to discuss the Israel-Palestine peace process. The gathering comes after Foreign Minister Sameh Shoukry held high-level talks with French, German, EU and Jordanian officials in recent weeks, suggesting that there may be renewed political will to push the two sides back to the negotiating table. The International Criminal Court also ruled a few days ago that it can take legal action against Israel on Palestine’s behalf for war crimes committed against Palestinians since Israel’s establishment.

AUC is hosting a webinar headlined the Rise of Citizen Capitalism with guest speakers Michael O’Leary (Linkedin), MD at Engine No. 1, and Two Sigma partner Warren Valdmanis. It airs tonight at 7pm CLT and you can register for it here.

Former US president Donald Trump’s second impeachment trial begins in the Senate tomorrow, after House impeachment managers delivered last month the charges to the Senate. Trump is the first president in US history to be impeached twice.

CIRCLE YOUR CALENDAR-

PSA- Tomorrow is the last day for students in Egypt looking to get into private universities to upload their educational certificates on the Higher Education Ministry’s electronic university admissions site as part of the ministry’s new system.

Public schools began their mid-year break on Saturday and will be on holiday until Saturday, 20 February. Enjoy the slightly smoother commute for the next several days, folks.

The International Conference on Global Business, Economics, Finance and Social Sciences gets underway tomorrow at Ramses Hilton Cairo.

Egypt is hosting an arm of the World Conference on Science Engineering and Technology, which runs from Wednesday-Thursday at Luxor’s Hotel Pavillon Winter.

Inflation figures for January will be released on Wednesday, 10 February.


CORRECTION- We incorrectly stated yesterday that Sarwa Life Ins. and Misr Capital had launched a fixed income fund. The companies have set up a money market fund. The story has since been amended on our website.

enterprise

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: Demand for private education is soaring in Egypt, with an estimated 2.1 mn new seats likely to be needed in K-12 private sector schools in Egypt by 2030 — almost 1 mn of which will be in Cairo, a Colliers International report tells us. We look at the tremendous horizons this opens for investors, and what’s needed to capitalize on it.

enterprise

Somabay brings you the ultimate water-sports experience featuring kiting, diving, surfing, snorkeling and catamaran rides. The deep blue water, perfect weather and the thrill of adventure will take you on an exciting ride. Have fun, get your adrenaline going and live life to the fullest.

CAPITAL MARKETS

Beltone, Sarwa will soon have a new corporate parent

Trading of Orascom Investment Holding (OIH) shares on the EGX will be suspended this coming Thursday, 11 February, to allow the company to spin out assets including investment bank Beltone and non-bank financial services player Sarwa Capital into a new entity, Orascom Financial Holding. OIH confirmed the move in a regulatory filing yesterday (pdf). OIH’s global depositary receipts on the London Stock Exchange will stop trading at the same time.

EGX-listed Orascom Financial will give investors access to some of Egypt’s highest-profile financial services companies, including Sarwa and Beltone, as well as future ventures in the industry, insiders tell us.

OIH will continue to own its Pyramids plateau venture as well as legacy assets including a mobile network in North Korea. OIH will retain investments in some nine subsidiaries and sister companies when all is said and done. OIH first announced the split last July. OIH will remain listed on the EGX with an authorized capital of EGP 2.5 bn, according to a separate filing (pdf).

The demerger is expected to be complete by the end of the month, Onsi Naguib Sawiris — who is set to play a leading role in OFH — told us yesterday.

What’s next? Once the horizontal demerger is complete, OIH will lower its capital and resume trading — after receiving regulatory approval — while the spun-off OFH will see its shares traded separately.

COVID WATCH

We’re going to have to learn to live with covid

We’re going to have to get used to living with covid for many, many years to come — but that doesn’t necessarily mean a lifetime of lockdown measures, the Wall Street Journal writes this morning in one of the smartest pieces about the pandemic that we’ve read in ages.

The bottom line: “The pathogen will circulate for years, or even decades, leaving society to coexist with Covid-19 much as it does with other endemic diseases like flu, measles, and HIV.”

We need to get to the acceptance stage sooner rather than later, suggests a former director of the US Centers for Disease Control: “Going through the five phases of grief, we need to come to the acceptance phase that our lives are not going to be the same. I don’t think the world has really absorbed the fact that these are long-term changes.

It’s not all doom and gloom: Vaccines and masking are key to being able to go about our daily lives in a more normal way. Look at Israel: The vaccine has proven “so effective at preventing severe disease and slashing hospitalizations and deaths [that] hospitalizations have already fallen 30% in Israel after it vaccinated a third of its population. Deaths there are expected to plummet in weeks ahead.”

You can expect to have to take an annual booster and maybe even an annual jab on top of that: A “booster in the autumn,” followed by annual vaccination could help fight new strains of the virus in the years ahead, UK’s vaccine minister Nadhim Zahawi told the BBC.

Why? We’ve already found that the Oxford / AstraZeneca jab is ineffective against the South African strain of covid, sending researchers back to the drawing board for a new shot, BBC reports.

Meanwhile: Dubai has got it right: It’s pledging to vaccinate all eligible adults against covid-19 this year, Amer Sharif, head of the emirate’s covid-19 command and control center, told Bloomberg TV. Also in the UAE: Abu Dhabi reimposed yesterday sweeping restrictions amid a resurgence of the virus. Gatherings have been banned, cinemas shut, and strict new capacity limits have been introduced on public transportation and non-essential services.

HERE AT HOME: The Health Ministry reported 534 new covid-19 infections yesterday, up from 509 the day before. The ministry also reported 47 new deaths, bringing the country’s total death toll to 9,651. Egypt has now disclosed a total of 169,640 confirmed cases of covid-19.

TOURISM

Tourism could face a three-year slog back to normality

Egypt’s tourism sector could be three years away from mounting a full recovery, according to Elhamy El Zayat, former chairman of the Egyptian Tourism Federation, who told the local press that we’re unlikely to see pre-pandemic levels of tourism before 2024. Lingering concerns over the pandemic will mean that people remain sceptical of international travel for another few years, despite the acceleration of the global vaccine rollout, he said.

Let’s hope he’s wrong: The country’s tourism sector experienced one of its worst years in living memory last year, as disruptions to international travel and worries about the pandemic caused revenues to nosedive more than 75% to just USD 4 bn. Some 3.6 mn tourists visited Egypt, down from 13 mn the year before, sending hotel occupancy in four of Egypt’s biggest tourist destinations down 60% — and seeing the country to lose out on some USD 14 bn in foreign currency revenue in the process.

AUTOMOTIVE

What will it take to get electric cars on the road?

Infinity Solar subsidiary Infinity-E will install 300 electric car charging docks across Egypt by 2023 as part of an ongoing plan to invest EGP 300 mn in EV infrastructure, CEO Shams El Din Abdel Ghaffar said, according to Masrawy. Infinity now has a total of 150 charging points in operation at 40 charging locations on major roads in or near Cairo, Hurghada, Alexandria and Ain Sokhna. The government has recently been pushing for a transition to EVs with incentives including set charging prices and subsidies of up to 50k per vehicle, while also moving along with plans to set up 3k charging stations within three years. Last month, state-owned El Nasr Automotive signed two contracts with China’s Dongfeng to locally assemble the vehicles here.

OTHER AUTOMOTIVE NEWS-

Suzuki’s local agent Modern Motors and BYD local assembler Al Amal Group are rolling out natural gas-powered vehicles for the government’s natgas transition plan, both companies’ chairmans said, according to Hapi Journal (here and here). Modern Motors will supply a seven-seater natgas Suzuki microbus, and is in talks to also provide a natgas model of passenger cars. Al Amal, meanwhile, will locally assemble natgas models of its BYD F3 and Lada Granta passenger cars, and King Long microbuses.

The government’s natural gas transition plan kicked into gear earlier this year. The Central Bank of Egypt launched a multi-bn EGP program then to support the plan, which aims to take some 250k old cars off the road and outfit with dual-fuel engines by the end of 2023 as a first phase, as well as build a network of natural gas filling stations.

LEGISLATION WATCH

Having fun? There’s gonna be a tax for that. Plus: Shippers get a break.

That tax on fun is back on the menu: Amendments to the tax code that would raise taxes on cinemas, nightclubs, theaters, and wedding venues are on the Finance Ministry’s to-do list in the coming period, Minister Mohamed Maait told the House Planning and Budgeting Committee on Sunday, Al Masry Al Youm reports. The amendments were less than popular with the business community when first proposed back in 2018.

Other bills on the House Budget committee’s agenda: Amendments to the Stamp Tax Act, as well as amendments to the Real Estate Tax Act, which could include exemptions for factories and businesses. Maait did not specify whether there are new changes in the works on the Stamp Tax Act after recent amendments that lower the tax on EGX transactions and the withholding tax on dividends were signed into law last year.

OTHER LEGISLATION NEWS-

The new Customs Act will no longer require shippers to submit waybills before leaving Egypt under new guidelines issued by the Customs Authority yesterday. Cargo ships, planes, and other vehicles will instead have the option of handing over the documentation 48 hours after leaving the country. The guidelines apply to vessels with or without cargo, and shippers who fail to submit waybills within the 48-hour period may be fined, El Shahat Ghatwary, who heads central administration at the Customs Authority, told Enterprise.

The guidelines will become part of the recently-ratified act and will be worked into the law’s executive regulations, which are currently under consultations with the shipping community, Ghatwary said. The changes were made after exporters, shipping agencies, and customs brokers all pushed back against various aspects of the law, leading to minor concessions from the Finance Ministry.

About the law: Ratified in October, the law aims to expedite clearance by introducing rules that simplify the passage of “transit goods” between ports in Egypt or to ports abroad and creating green channels for trusted companies, among other stipulations. It’s part of a larger drive to streamline customs procedures which also includes the soon-to-be launched National Single Window for Foreign Trade Facilitation (Nafeza) that creates pre-registration protocols at seaports.

REGULATION WATCH

Digitalize all the things…

Want a building permit? You’ll need to hook your property up to fiber. Fiber optic connectivity will be one of the public utilities required for new construction permits as of April — and will be treated like all other required utilities, CIT Minister Amr Talaat said in his policy address to the House of Representatives yesterday, according to Al Mal. The minister did not explicitly say whether this requirement will be included in the new building code, and the Unified Building Code (pdf) passed last year only lists drinking water and sanitation infrastructure, electricity, and a road network as the “basic public utilities” required for a building. However, the new building code is expected to be expansive and should see the light in the near future, suggesting that CIT infrastructure requirements could be included in the new regulations.

The inclusion would also make sense as the Sisi administration pushes ahead with its digitization strategy, which includes work from the CIT Ministry to upgrade and develop Egypt’s network infrastructure, Talaat told Enterprise back in 2018. Vodafone Egypt and state-owned Telecom Egypt have previously announced plans to invest in fiber optic infrastructure.

enterprise

STARTUP WATCH

Sakneen raises USD 1.1 mn in seed funding round

Egyptian real estate marketplace Sakneen has raised USD 1.1 mn in an oversubscribed seed funding round led by Algebra Ventures, with “major participation” from Sarwa Capital and Foundation Ventures, according to a statement (pdf). The round also saw participation from US-based real estate private equity firm Hem+Spire, Saudi-based Nakhla VC, as well as angel investors with pedigrees that include Google and BlackRock. Sakneen provides a search engine with “detailed search abilities like allowing users to search by down payment, monthly payment, and unique data points like NPV and travel times,” CEO and co-founder Ramy Khorshed said.

Where the investment is going: Sakneen plans to use the funding primarily on its products and technology, and to retain the talent the company has on board, Khorshed told Enterprise. The company is currently “actively working on several new features” it plans to roll out within the next few weeks, and is looking to launch “completely new products” in the near future, CTO and co-founder Hussein El Kheshen said.

CURRENT AFFAIRS

Juhayna shares tumble on news of CEO’s arrest

Shares of dairy foods giant Juhayna plunged as much as 17% in trading yesterday before regaining some ground to close the day down 10.6% on news of CEO Seif Thabet’s arrest on Saturday as part of what Reuters says is an investigation into the alleged financing of terror groups. Seif’s father Safwan Thabet was arrested late last year as part of a probe into what security officials described as “financial irregularities.” The company confirmed Seif’s detention in an EGX disclosure (pdf) Sunday, saying it had no further information to disclose.

MOVES

Hossam Abousati has been appointed CEO of the General Authority for Healthcare Accreditation and Regulation, Al Masry Al Youm reports. Abousati had previously served as a political communications assistant to the health minister.

ENTERPRISE+: LAST NIGHT’S TALK SHOWS

Informal housing and development dominated the airwaves again last night as the talking heads delved into President Abdel Fattah El Sisi’s visit to the Ezbet El Haggana area along with a number of ministers. Masaa DMC’s Eman El Hosary (watch, runtime: 15:43) and Ala Mas’ouleety’s Ahmed Moussa covered the tour (watch, runtime: 4:55).

Plans to renovate with minimal displacement: The government’s plan to develop Ezbet El Haggana as part of its development strategy for informal settlements will see repairs to its electricity and sewage networks complete within the coming month, Kelma Akhira’s Lamees El Hadidi noted (watch, runtime: 2:51). The development plan also entails expanding the roads in the area, but authorities will aim to minimize the number of buildings that will be removed in the process, head of the Informal Housing Fund Khaled Seddik told El Hosary (watch, runtime: 5:50). Seddik had a similar chat with Al Hayah Al Youm's Lobna Assal (watch, runtime: 11:13).

The second biggest talking point of the night: The imminent launch of Egycomex and other internal trade developments. Ibrahim Ashmawy, head of the Internal Trade Development Authority and chairman of the new Egyptian Commodities Exchange (Egycomex) explained the benefits of the exchange in regulating and digitizing commodities trading in a sit-down with Al Hayah Al Youm’s Assal. With its financial and administrative regulations now complete, the exchange will launch on a pilot basis in mid-April, with wheat as the first tradable commodity, Ashmawy confirmed (watch, runtime: 10:52).

The government’s plans to establish logistics zones in different governorates are meant to help reduce the prices of goods, Ashmawy said in a separate interview with Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 5:43). Ashmawy also touched on the planned EGP 20 bn Gold City, which will depend on the private sector for financing and partnership (watch, runtime: 4:29).

EGYPT IN THE NEWS

Just like the domestic press, the foreign press is taking a breather this morning. The only story of note out there is the Associated Press picking up on President Abdel Fattah El Sisi giving his blessings to Libya’s newly appointed interim government in his phone-in to El Hekaya on Saturday night.

ALSO ON OUR RADAR

Edita has added an EGP 106 mn assembly line for its wafer products, the EGX-listed snackfood maker said in a regulatory filing (pdf). The new line can produce up to 6.4k tonnes of product a year, and will be used to produce Freska Block, Edita’s latest addition to its wafer segment.

Other things we’re keeping an eye on this morning:

  • Credit Agricole Egypt has launched (pdf) an eco-friendly range of bank cards made of bioplastic.
  • Governorate-level strategies to develop SMEs and encourage informal businesses to go legit are on the radar of the House SMEs Committee.
  • The General Authority for Freezones and Investment will develop bilateral investment and trade with Kazakhstan under an MoU signed with state company Kazakh Invest.

PLANET FINANCE

Powered by
Pharos Holding - https://pharoslive.com/

Another Wall Street vet just called a bubble: Peter Kraus has warned that the US market may be due a correction, telling Bloomberg TV that stocks could lose 10-15% of their value. The expected rising inflation over the US stimulus package estimated at USD 5 tn could also turn real rates positive and affect overvalued stocks.

Uber’s Middle East subsidiary Careem has dropped commission for GCC restaurants and introduced a subscription fee-based model, in a step to relieve the adverse impact of covid-19 on Gulf eateries, it announced on Twitter. Careem’s new structure would return at least 5% more value on small food delivery orders, ascending to over 17% on big batches, awarding merchants a “much larger share of the pie.” Mudassir Sheikha, the company’s CEO and co-founder, told the Financial Times. The news comes on the very same day Mohamed Alabbar’s Dubai-based e-commerce platform Noon uncovered its reduced commission offer for restaurants, reflecting the traditional model’s “unsustainability” in the wake of the pandemic disruption.

Oil jumps to near 1-year high: Oil markets are rebounding at a faster-than-expected rate following the historic crash last year, Bloomberg reports. Last week, Brent-crude futures rallied to a one-year high approaching USD 60 / bbl, driven by increased Chinese consumption, the global vaccine rollout, and OPEC+ production curbs. But observers say the market may be getting ahead of itself, betting on OPEC+’s ability to deliver muted supply and the rest of the world’s ability to boost demand, both of which may not last.

None

EGX30

11,603

– (YTD: +7.0%)

Down

USD (CBE)

Buy 15.61

Sell 15.71

Down

USD at CIB

Buy 15.60

Sell 15.70

None

Interest rates CBE

8.25% deposit

9.25% lending

Up

Tadawul

8,688

+0.8% (YTD: -)

Up

ADX

5,672

+0.1% (YTD: +12.4%)

Down

DFM

2,667

-0.2% (YTD: +7.0%)

Up

S&P 500

3,887

+0.4% (YTD: +3.5%)

Down

FTSE 100

6,489

-0.2% (YTD: +0.5%)

Up

Brent crude

USD 59.89

+0.9%

Up

Natural gas (Nymex)

USD 2.91

+1.8%

Up

Gold

USD 1,861.50

+0.2%

Down

BTC

USD 38,782.83

-2.1%

The EGX30 was flat yesterday on turnover of EGP 1.75 bn (19.5% above the 90-day average). Foreign investors were net sellers. The index is up 7.0% YTD.

In the green: Orascom Investment (+7.5%), Pioneers Holding (+6.1%) and GB Auto (+4.1%).

In the red: Sidi Kerir Petrochemicals (-1.3%), Abu Qir Fertilizers (-1.1%) and Heliopolis Housing (-1.0%).

Korea’s Kospi is the lone Asian market in the red this morning and futures suggest Wall Street and European markets will open in the green later today.

AROUND THE WORLD

A HANDFUL OF REGIONAL DIPLOMACY STORIES:

Egypt resumes “infrastructure diplomacy” with Iraq: The “oil-for-reconstruction” mechanism agreed by Egypt and Iraq last year was the subject of talks between International Cooperation Minister Rania Al Mashat and a delegation of Iraqi officials last week, the ministry said in a statement, which offered no further details. The two sides signed 15 MoUs in November which could see Egyptian companies awarded infrastructure projects in Iraq in return for Iraqi oil.

The talks came as Egypt’s new ambassador to Iraq, Walid Ismail, presented his credentials to the Iraqi Foreign Ministry on Saturday. Ismail was appointed the new ambassador in July.

Foreign Minister Sameh Shoukry reiterated Egypt’s support for a diplomatic solution to the Yemeni crisis in a meeting with newly appointed Yemeni Foreign Minister Ahmed Awad BinMubarak yesterday, according to a cabinet statement.

Making headlines internationally: Tens of thousands of protesters have taken to the streets of Myanmar after last Monday’s military takeover, calling for the release of elected leader Aung San Suu Kyi. Some 1k people joined a protest in Naypyidaw and 60k in Yangon, while more protests were reported in other areas of the country. The story is everywhere in the global press from Reuters and the Associated Press to the Financial Times.

blackboard

How is private sector education positioned to grow in Egypt, and what could spur it? Part 1. Egypt’s private sector education represents a major window for investment, with target demographics underserved and demand rapidly growing, recent reports indicate. Two reports in particular capture a snapshot of the market: The Colliers International Egypt K-12 Education Sector Market Overview 2020 (pdf) and the World Bank’s Country Private Sector Diagnostic 2020 report (pdf). Today, we’re looking at the Colliers report, which outlines how soaring demand for private K-12 education is opening up new potential investments. Private-sector friendly moves that reduce bureaucracy will keep spurring investment in this key area, it says. This big-picture analysis ties in with trends and developments we’ve seen first-hand in recent years.

The private sector K-12 market share is still small: Private school students currently account for 10.6% of Egypt’s total student population — which stood at an estimated 23.3 mn in 2019-20, up from 19.3 mn in 2014-15. Almost 50% of Egypt’s total number of private schools are international, according to the Colliers report.

But demand is growing: Egypt’s private sector K-12 student growth has almost doubled in the last five years, at a CAGR rate of 6.3%, compared to 3.6% in the public sector. Some 2.1 mn new seats will be needed in private sector schools in Egypt by 2030, with almost 1 mn of these in Cairo, Colliers estimates. This makes sense when you consider that students in overcrowded public schools currently often have to make use of private tutoring services to supplement their learning. While the size of the private tutoring industry is difficult to quantify, sources including private sector education outfit CIRA estimate that annual payments for primary and secondary students reached some USD 2.2 bn in 2016-17.

So is investor interest: Private school growth clocked in a CAGR of 4.4% between 2014-15 and 2018-19 — over double the public school growth rate. This shows significant investor interest in the sector, the Colliers report shows.

And Greater Cairo looks set to remain a hotspot: 54% of Egypt’s total private student population is enrolled in Greater Cairo. Enrollment is taking place in private schools at a CAGR of 5.6%, compared to 3.5% for public schools. But within Greater Cairo itself, the private sector only makes up 29% of enrollment — meaning there’s huge potential for private sector education growth in rapidly-developing areas like the New Capital. Most private schools in the east (New Cairo and the New Capital) are currently operating at full capacity, indicating market openings.

A key reason for this is higher income levels in Cairo — which are projected to grow: Income levels tend to be higher in Greater Cairo, meaning families can afford to pay annual tuition fees ranging from USD 2.5k-30k, with USD 8k-12k being the “sweet spot”. The number of households within these higher income brackets are projected to grow significantly by 2030: families that can afford to pay fees of USD 2.5k will grow to 110k from 80k; those that can pay USD 6.5k will grow to 40k from 30k; those that can pay USD 15k will grow to 21k from 16k; and those that can pay USD 30k will grow to 16k from 10k.

This is creating additional demand for international schools in particular: Income growth and the desire for prestigious, high quality education mean there’s a significant demand for regional and international branded schools, the report tells us. Currently, almost 35% of the top private schools offer more than one curriculum, with the most popular being the British, followed by the American Diploma, International Baccalaureate, and Canadian.

And we’re already seeing evidence of this: International K-12 education franchising is poised to grow, we reported recently. Malvern College Egypt was set up in 2016 as a franchise of Malvern International. Regent British School in New Mansoura opened its doors in October 2020. Kent College West Cairo is due to open in 3Q2022. Saxony International School Egypt is set to open in 2021-2022 as a franchise of German holding company Saxony International School, in partnership with CIRA and education management company Eduhive. And a flurry of school construction in new development hubs like Ain Sokhna and El Alamein is expected over the next few years.

Egypt’s appeal for international investors spans demographics, economics and culture: Egypt appealed to Malvern because it’s relatively economically advanced within MENA, its demographics are favorable to the education business, and education is culturally very important to Egyptians, Director of International Schools Allan Walker told Enterprise.

The sector offers lucrative ventures for investors — but challenges remain, including red tape and attracting and retaining qualified staff, the report says.

Still, at least one of these challenges has since been overcome: The decision to remove the 20% cap on foreign ownership — which was issued after the report was published — is cited in the report as a deterrent to investment, which notes that the government had outlined a mechanism providing private sector K-12 schools with an avenue for exemption. The 20% foreign ownership limits had raised serious concerns that investors would be deterred and education expansion plans slowed. The new decision allows schools to be fully owned by individuals, funds, or companies with foreign or dual nationalities, provided they’re registered and based in Egypt. The reversal of the cap suggests that at least one major challenge has now been overcome.

And it was welcomed by operators: Reversing the foreign ownership cap is a sign that the government is serious about attracting qualified investors to the industry — and that merit will take precedence over nationality when it comes to operating a school here, CIRA CEO Mohamed El Kalla told Enterprise. GEMS Egypt CEO Ahmed Wahby said the move would drive investment into the sector while also helping current operators improve their services and meet demand.

Next week: The World Bank’s Country Private Sector Diagnostic 2020 report gives an overview of how a productive private sector could spur economic growth in Egypt. The private higher education sector is a vital part of this, but regulatory amendments are needed to accelerate the process, the report says. We look at this in detail next week.

Your top education stories for the week:

  • It’s officially mid-year break for public schools. Students are scheduled to return to their classrooms on 21 February.
  • The specifics of the Education Ministry’s plans for the rest of the academic year, after the break wraps up for public and national schools, will be announced next Sunday.
  • Students looking to apply to private universities have until today to upload their certificates to the Higher Education Ministry’s new centralized platform.
  • Volkswagen will set up an applied technology school for car maintenance, with classes set to begin next fall, under the terms of an MoU with the Education Ministry.

CALENDAR

February: France’s finance minister, Bruno Le Maire, is set to visit Egypt.

6-8 February (Saturday- Monday) Students will be able to upload their educational certificates on the Higher Education Ministry’s electronic university admissions site.

6-20 February (Saturday-Saturday): Mid-year school break (public schools — enjoy the break from bumper-to-bumper traffic).

7-28 February (Sunday-Sunday): The Finance Ministry will receive applications from companies wishing to take part in the second phase of its program for the immediate payout of export subsidy arrears to exporters, minus a 15% fee.

8 February (Monday): Egypt leads an emergency Arab League minister-level meeting on the Israel-Palestine peace process.

8 February (Monday): AUC will hold a webinar titled ‘The Rise of Citizen Capitalism’ featuring Michael O'Leary, the managing director of Engine No. 1, and Warren Valdmanis, a partner at Two Sigma.

9 February (Tuesday): International Conference on Global Business, Economics, Finance and Social Sciences, Ramses Hilton, Cairo, Egypt.

10-11 February (Wednesday-Thursday): Egypt will host an arm of the World Conference on Science Engineering and Technology, Hotel Pavillon Winter, Luxor, Egypt.

12 February (Friday): Deadline to reach a settlement with the Tax Authority on overdue income, value-added, or real estate taxes without all the late fees. Late taxpayers are still eligible for a 50% exemption on interest fees and late penalties until 12 February under a bill passed last year, Tax Authority boss Reda Abdel Kader said.

12-15 February (Friday-Monday): Students will be able to apply for placement at private universities on the Higher Education Ministry’s electronic university admissions site

20 February (Saturday): Final results of applications for private university places will be announced on the Higher Education Ministry’s electronic university admissions site

22-24 February (Monday-Wednesday): Second Arab Land Conference on land management, efficient land use, among other topics.

22 February- 5 March (Monday-Friday) Egypt will host the World Shooting Championship in 6 October’s Shooting Club, with 31 countries set to participate

26 February (Thursday): The Afro Future Summit will take place virtually.

28 February (Sunday) Deadline for businesses, sole traders, and those generating income from sources other than their day job to file wage tax returns through the electronic filing system.

March: Potential visit to Cairo by Russian President Vladimir Putin.

1-5 March (Sunday-Friday): Aswan Forum for Peace and Development will take place virtually.

4-6 March (Thursday-Saturday): Cairo Fashion & Tex trade show, Cairo International Convention Centre, Cairo, Egypt

8 March (Monday): The IDC Future of Work Egypt conference will be held virtually featuring experts from Egypt and Jordan.

9-11 March (Tuesday-Thursday): EduGate 2021 – Enter The Future conference, Kempinski Royal Maxim Hotel, Cairo, Egypt.

18 March (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

1-3 April (Thursday-Saturday): HVAC-R Egypt Expo.

8-10 April (Thursday-Saturday): The TriFactory’s Endurance Festival at Somabay.

13 April (Monday): First day of Ramadan (TBC).

25 April (Sunday): Sinai Liberation Day.

29 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC),

29 April (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

1 May (Saturday): Labor Day (national holiday).

2 May (Sunday): Easter Sunday.

3 May (Monday): Sham El Nessim.

13-15 May (Thursday-Saturday): Eid El Fitr (TBC).

25-28 May (Tuesday-Friday): The World Economic Forum annual meeting, Singapore.

31 May-2 June (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt,

1 June (Tuesday): The IMF will conduct a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

17 June (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

24 June (Thursday): End of the 2020-2021 academic year (public schools).

26-29 June (Saturday-Tuesday): The Big 5 Construct Egypt, Cairo International Convention Center, Cairo, Egypt.

30 June (Wednesday): 30 June Revolution Day.

1 July: (Thursday): National holiday in observance of 30 June Revolution.

30 June- 15 July: National Book Fair.

1 July (Thursday): Large taxpayers that have not yet signed on on to the e-invoicing platform will suffer a host of penalties, including removal from large taxpayer classification, losing access to government services and business, and losing subsidies.

19 July (Monday): Arafat Day (national holiday).

20-23 July (Tuesday-Friday): Eid Al Adha (national holiday)

23 July (Friday): Revolution Day (national holiday).

5 August (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

9 August (Monday): Islamic New Year.

12 August (Thursday): National holiday in observance of the Islamic New Year.

16 September (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

30 September-2 October (Thursday-Saturday): Egypt Projects 2021 expo, Egypt International Exhibition Center, Cairo, Egypt.

1 October (Friday): Expo 2020 Dubai opens.

6 October (Wednesday): Armed Forces Day.

7 October (Thursday): National holiday in observance of Armed Forces Day.

18 October (Monday): Prophet’s Birthday.

21 October (Thursday): National holiday in observance of the Prophet’s Birthday.

28 October (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

13-17 December: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.

16 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

27 June – 3 July 2022 (Monday-Sunday): World University Squash Championships, New Giza.

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 below between the actual holiday and its observance.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt; and Abu Auf (tax ID: 584-628-846), the leading health foodmaker in Egypt and the region.