Wednesday, 3 March 2021

EnterpriseAM — Don’t let your guard down yet

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, friends, and happy Wednesday — or as we like to call it here at Enterprise, almost-Thursday.

THE BIG NEWS HERE AT HOME is divided into two themes: Diplomacy and legislation. A renewed push from Egypt and Sudan to bring in mediators to help resolve the impasse over the Grand Ethiopian Renaissance Dam is driving the news cycle in the press and on the airwaves. Sudanese Foreign Minister Mariam Al-Mahdi sat down with President Abdel Fattah El Sisi and Foreign Minister Sameh Shoukry in Cairo yesterday to discuss the dam. We have chapter and verse in Last Night’s Talk Shows, below.

Sudanese Prime Minister Abdalla Hamdok is also coming to town within the next few days, Al-Mahdi said yesterday, and El Sisi is expected to pay Khartoum a visit on Saturday. Separately, Egypt’s army Chief of Staff Mohamed Farid held talks with his Sudanese counterpart Mohamed Othman Al Hussein in Khartoum, according to the Sudanese News Agency.

You can also expect some chatter today about the situation in Palestine, as Shoukry is scheduled to meet with his Palestinian and Jordanian counterparts to discuss ways to revive peace talks with Israel.

Meanwhile, on the legislation front: The House of Representatives is soldiering through a stacked pipeline of laws — the details on which we have in Legislation Watch, below. The House general assembly is now in recess until Sunday, 14 March. Committee-level meetings will continue during the recess.

THE BIG STORY INTERNATIONALLY: The US will have enough vaccines in stock to cover its entire adult population by the end of May, President Joe Biden said at a presser yesterday in another acceleration of his timeline for the vaccination program. The emergency approval of Johnson & Johnson’s jab was key in bringing forward the administration’s goal to have enough doses for 300 mn Americans, which was previously expected by August, Biden said. Having the stock doesn’t necessarily mean having administered all the vaccines by then, the president noted.

*** CATCH UP QUICK — The top stories from yesterday’s EnterprisePM:

  • How would a post-covid commodities boom impact Egypt? Expect higher inflation, for one.
  • Foreign holdings of EGP debt are officially above the pre-covid mark.
  • Prime Speed Medical is reducing its target stake in New Al Safwa Specialized Hospital to 4.4% from 10%.

WHAT’S HAPPENING TODAY-

It’s PMI day: February’s purchasing managers’ index figures for Egypt are out this morning at 6:15am CLT — just a few minutes after we hit “send” on your morning briefing. Business activity in the non-oil private sector contracted in December and January as fears of the covid second wave weighed on sentiment and hit demand.

PSA- Grab an umbrella as you head out the door this morning: It looks like we may be in for some light to medium rainfall. Our favorite weather app suggests there’s a 30% chance of rain in the capital, and a 70% chance along the Mediterranean coast.

Planning to buy a Volvo around the end of the decade? Expect an EV to be your only option: Volvo is planning (pdf) to go all-in on electric vehicles, with plans to phase out the production of all cars with internal combustion engines — including hybrids — from its global offering before 2031. The automaker sees non-EVs having “no long-term future,” Henrik Green, Volvo’s chief technology officer, said in a separate statement (pdf). The move makes Volvo the latest to hop on the all-electric bandwagon, with Ford, Jaguar, and Bentley all recently rolling out plans for an all-electric future in the next 10-15 years.

CIRCLE YOUR CALENDAR-

It’s the third day of the EFG Hermes Virtual Investor Conference: The conference is headlined as “Frontier Emerging Markets Regaining Momentum” and brings together executives from 197 companies and more than 700 investors from 253 global institutions to exchange insights on the current state of frontier and emerging markets. The event runs until next Tuesday, 9 March.

It’s also Day 3 of the Aswan Forum for Peace and Development, which runs until Friday.

Key data points in the coming days and weeks:

  • Foreign reserves figures should be out at the end of the week.
  • Inflation data will drop on Wednesday, 10 March.
  • The Central Bank of Egypt will discuss interest rates on Thursday, 18 March.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

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*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, urban development and as well as social infrastructure such as health and education.

In today’s issue: Egypt’s construction growth slowed in 2020, but last year’s expectations for a sector rebound are proving solid. Data — including a 1Q2021 Fitch report — indicates sector growth of 10% y-o-y in 2021, with Egypt having the strongest outlook for the MENA region and well outperforming regional peers.

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COVID WATCH

Vaccine rollout speeds up globally, but we’re not out of the woods yet

The Health Ministry reported 581 new covid-19 infections yesterday, down from 586 the day before. Egypt has now disclosed a total of 183,591 confirmed cases of covid-19. The ministry also reported 42 new deaths, bringing the country’s total death toll to 10,778.

Among those testing positive: Health Minister Adviser Aysam Salah, who confirmed yesterday he has contracted the virus.

“Africa? Never heard of it,” say covid researchers: Only 4% of the scientific research conducted on covid-19 is applicable to Africa, despite the continent being home to 17% of the global population, the International Business Times reports. Analysis shows that, of the 2,196 peer-reviewed studies published in leading medical journals, just 96 address African countries, with almost two thirds of these focusing on Egypt, Nigeria and South Africa.

Safety concerns abound as the Chinese covid vaccine sweeps the globe, including Egypt, where some are still apprehensive about the Sinopharm vaccine available here, according to the Associated Press. One nurse who received the jab was uneasy about the lack of publicly available data from the trials, while another official says that vaccines manufactured in the West “are reserved for rich countries.” China has sent us 300k doses of the Sinopharm vaccine as a gift, and is set to send another batch of 300k jabs in the near future.

Speaking of which: Masaa DMC’s Ramy Radwan addressed widespread concerns about the safety of covid-19 vaccines, particularly for the elderly, saying that the probability of a vaccine causing adverse reactions or death is extremely low and significantly lower than the probability of getting seriously ill from contracting the virus (watch, runtime: 4:09).

A total of 237 mn doses of the Oxford/AstraZeneca jab will be delivered to some 142 countries by the end of May through the World Health Organization’s (WHO) Gavi/Covax initiative, WHO Director-General Tedros Adhanom Ghebreyesus said in a virtual briefing yesterday. The exact timeline for delivery, made by AstraZeneca and India’s Serum Institute, will be split into separate two-month schedules (February-March and April-May), depending on many factors including national regulatory requirements, availability of supply and fulfillment of other criteria, the statement said. Egypt should be receiving a total of 40 mn doses of the jab this year as part of our agreement with Gavi, Health Minister Hala Zayed has said.

Shipments are ramping up elsewhere in Africa: Nigeria received 3.94 mn doses of the Oxford-AstraZeneca vaccine yesterday, becoming the third country to receive a shipment from Covax that aims to deliver around 90 mn jabs to Africa in 1Q2021, the Associated Press reports. This was also the largest shipment sent out by Covax so far, after Ghana received a 600k-dose delivery and Ivory Coast got a 504k-dose shipment last week.

Don’t let the vaccines lull you into a false sense of confidence, the World Health Organization warned yesterday, pointing to the “premature” lifting of lockdowns in several countries as more variants of the virus continue to circulate. The number of deaths around the world has crossed the 2.5 mn mark, with nearly 115 mn cases recorded globally, according to Johns Hopkins data.

INVESTMENT WATCH

Mac Optic has EGP 300 mn worth of education investments planned

Greek industrial investor Mac Optic will invest EGP 300 mn to establish five new international schools and one technical institute in Egypt, CEO Ahmed Radwan told Al Mal without specifying a timeline. The schools will be located in Cairo, Alexandria, Mansoura, Port Said, and Minya while the technical institute will be based in Cairo and will specialize in engineering and economics, he said. The facilities will all be managed by French non-profit Mission Laïque Française (MLF), which will offer students accredited courses similar to those provided by the French education system.

Mac is investing in the six establishments through a special investment vehicle it set up under its new Egypt-focused investment arm, Mac Holding. The company last year established Mac Holding with USD 100 mn in capital to invest in education, financial services, media, and healthcare ventures in Egypt.

Mac who? Mac Optic Investment, established in 1995, started out as a supplier of military equipment but has since expanded to several other industries including cement, food commodities, medical supplies, and refining. The company is active in nine countries in the Middle East and Europe, as well as the US.

M&A WATCH

Bank Audi Egypt = FAB in 2Q2021

Bank Audi will be fully integrated into First Abu Dhabi Bank (FAB) during 2Q2021 after receiving the approval of the Central Bank of Egypt and other regulatory bodies for the transaction, Masrawy reports, citing unnamed sources close to the matter.

Background: FAB signed in January a final agreement to acquire 100% of Bank Audi’s operations in Egypt. The acquisition will increase the Emirati lender assets to EGP 120 bn (c. USD 8.1 bn) post-acquisition, making it one of the largest banks in Egypt in terms of assets. FAB’s branch count will more than triple to 70, adding Bank Audi’s 53 branches to its existing 17. Audi’s total assets were valued at EGP 83 bn (USD 5.3 bn) at the end of 3Q2020.

LEGISLATION WATCH

House signs off on suspending Real Estate Registry Act

It’s official: Amendments to the Real Estate Registry Act will be suspended until 30 June 2023 after the House of Representatives’ general assembly signed off yesterday on the suspension, according to a newsreel from the House (watch, runtime: 10:57). The House Legislative Committee had approved the decision earlier in the day.The votes came one day after President Abdel Fattah El Sisi issued the decree ordering the suspension to allow time for public consultations on the legislation.

Background: The law — approved by parliament in August — was scheduled to go into effect this coming Saturday, 6 March. The law mandated new procedures for property owners to register their properties, and stipulated that properties must be registered at the Real Estate Registry before getting access to basic utilities. Properties that already have access to utility infrastructure would not be affected, however. The Madbouly Cabinet is now working on a draft bill for the interim two-year period setting the fees and procedures for real estate registry until the reworked Real Estate Registry Act is prepared.

OTHER LEGISLATION NEWS-

The Water Resources Act earned preliminary approval from the House general assembly ahead of a final vote on the bill (watch, runtime: 0:22). The act, which has been languishing in parliament for years, is expected to unite disparate laws on water into a single bill, and will introduce stricter penalties for water waste, while addressing pollution, dwindling resources, and climate change issues. The legislation received a nod from a sub-level committee — formed to resolve some of its contentious articles — in 2019, after being in the works since at least 2017, when it received Cabinet approval.

Want a refresher? Take a deep dive into the legislation — which is one of three water-related bills that are meant to address some of the structural issues with how water resources are organized in Egypt — with this issue of our weekly infrastructure vertical, Hardhat. And if you want more perspective on why these bills are pressing, go back to our inaugural issue of Hardhat, wherein we looked at the government’s USD 50 bn water-saving plan.

THE HOUSE ALSO SIGNED OFF ON: A law regulating blood donation and the manufacturing and collection of plasma earned a final stamp of approval from the House general assembly yesterday, according to a newsreel from parliament (watch, runtime: 20:12).

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REAL ESTATE

Real estate appraisal system to come into effect in January 2022

The Real Estate Tax Authority is currently surveying properties and preparing criteria based on which buildings will be valued starting January 2022, advisor to the head of the Real Estate Tax Authority Nagi Sergani told Enterprise. The results of the appraisal will be valid for five years, and will be used to value the properties and calculate the amount of real estate tax due, the sources said. Increases in the value of residential properties will be capped at 30%, while increases for commercial and administrative buildings will be capped at 45%.

The general survey is expected to take around nine months, Sergani said. Around 140 teams have been deployed around the country to evaluate different kinds of properties, including industrial and touristic establishments.

BACKGROUND: The survey or appraisal process happens every five years as part of a review of the real estate tax, and was last supposed to happen in 2019. Authorities postponed the appraisal at the time as they were working on a digital appraisal system — of which a prototype was ready in March of that year — and were then forced to postpone it again when covid-19 hit in 2020. The digital survey was designed to use up-to-date methodologies and arrive at location-based values with the help of geographic coordinate systems, engineering professor and head of the real estate appraisal program Mohamed Salheen told us at the time.

REGULATION WATCH

Non-bank lenders now allowed to finance margin lending

Egyptian factoring companies are now able to finance margin lending by brokerage companies under new regulations (pdf) released by the Financial Regulatory Authority (FRA) yesterday. The move is meant to give brokerages access to new sources of funding and stimulate trading on the EGX. Eligible brokers are required to get approval from the FRA before engaging in margin lending. Allowing non-bank lenders to finance margin lending will likely be a welcome move for brokerages and industry associations, which have for years been seeking greater access to financing for the practice. Banks are typically reluctant to finance margin trading out of fear of turbulence in the stock market.

But Enterprise, what’s factoring? It’s a form of financing where one entity (known as the factor) buys invoices for uncollected receivables at a reduced price, then goes on to collect the full value of the receivables from the third party and pockets the difference. The factor charges a factoring fee in exchange for quickly releasing funds to the company selling the receivables. This fee is a percentage of the receivables, with the rate depending on industry, the volume of receivables being collected, how long the receivables have been outstanding, and most importantly the creditworthiness of the customers paying the receivables. Want more? We’ve got you covered with our explainer on factoring.

EARNINGS WATCH

Rameda Pharma’s net income dipped 14% y-o-y in 4Q2020 to EGP 43.5 mn, down from EGP 50.8 mn in the same period in 2019, the company said in a earnings statement (pdf). This came despite revenues rising almost 5% y-o-y during the quarter to EGP 287.3 mn due to “recovering market conditions,” the company said. In 2020, net income grew by more than a third to EGP 112.2 mn while revenues expanded 7.4% to EGP 960.2 mn on the back of a portfolio’s focus on higher priced products during the year. This came despite the company seeing a 14% decline in total sales volume due to covid-19.

Looking ahead: “Developments in the final quarter of the year, including the rollout of vaccines which began in December 2020, have signaled a promising outlook for 2021,” said CEO Amr Morsy. The company will roll out 8-10 high-priced meds this year, and is looking to expand into new markets including Kuwait, Bahrain, the UAE and Moldova.

ENTERPRISE+: LAST NIGHT’S TALK SHOWS

Negotiations over the Grand Ethiopian Renaissance Dam were in the limelight on last night’s talk shows, after Egypt and Sudan renewed yesterday a warning against Ethiopia unilaterally filling the dam’s reservoir. The joint statement from Cairo and Khartoum followed a meeting between President Abdel Fattah El Sisi, Foreign Minister Sameh Shoukry, and Sudanese Foreign Minister Mariam Al-Mahdi. Among those with coverage: Kelma Akhira’s Lamees El Hadidi (watch, runtime: 2:21), Al Hayah Al Youm’s Mohamed Sherdy (watch, runtime: 2:56), and Masaa DMC’s Ramy Radwan (watch, runtime: 2:30).

The talking heads’ commentary centered largely on the need for international mediation. Egypt reiterated yesterday its backing for a Sudanese proposal to set up an international quartet to mediate the negotiations, which would include the African Union, EU, US, and United Nations. The impasse will likely only be resolved once the EU and US intervene, since they each have a vested interest in maintaining peace and stability in the Horn of Africa and among Nile Basin countries. They are also likely the only international players who have leverage to push things along, African Affairs expert at Al Ahram Center for Political and Strategic Studies Amani El Tawil told Lamees (watch, runtime: 5:36). Ala Mas’ouleety’s Ahmed Moussa suggested much of the same, saying that the African Union alone was unable to push any progress (watch, runtime: 3:46).

Is the road ahead going to look like the past unsuccessful attempts? Maybe not, suggests El Tawil, who points to Egypt and Sudan now putting up a united front, whereas they previously may have had different positions. El Tawil points to Ethiopia’s first filling of the dam last year, which caused mass devastation in Sudan and brought to light the dam’s destructive potential for Khartoum. This united position between Egypt and Sudan could be the key source of pressure for Ethiopia to agree to mediation and stop dragging its feet on the talks, Egyptian Center for Strategic Studies Khaled Okasha told Lamees (watch, runtime: 7:35). El Tawil also noted that Egypt and Sudan signing military cooperation agreements yesterday flashed some of the two countries’ hard power, which could help nudge things along.

Amendments to the Personal Status Act were the topic of a roundtable discussion (or screaming match, to be completely honest) Ala Mas’ouleety’s Ahmed Moussa hosted. It appears that nobody is happy with the amendments, with one lawyer arguing that they would severely undermine women’s rights (watch, runtime: 4:44). Another lawyer claimed that men would be the ones negatively affected because of the expanded grounds for divorce and laundry list of marital crimes that could land a husband in prison (watch: runtime: 8:18).

EGYPT IN THE NEWS

It’s human rights as far as the eye can see for Egypt in the foreign press: The Committee to Protect Journalists is calling for the release of freelance columnist Gamal El Gamal who was arrested in February at Cairo International Airport on charges of spreading false news and joining a terrorist organization in connection to an alleged infraction that took place in 2017. Meanwhile, AFP reports that 11 murder convicts were executed, and Euronews takes note of three Egyptian families who are facing deportation after being denied asylum in Sweden.

ALSO ON OUR RADAR

Fertilizer export tariffs raised amid commodities boom: The Trade Ministry has raised the duty imposed on nitrogen fertilizer exports as it looks to secure local supply amid rising global prices. Fertilizer companies will now pay EGP 600 to export a ton of fertilizer, up from EGP 550 , the ministry said yesterday. The global commodities boom has pushed up the price of fertilizers, with a ton now averaging USD 370 in the global market, up from USD 230 last year.

PLANET FINANCE

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EM bonds are likely to continue to oscillate between rallies and sell-offs for the coming months, BlackRock’s Head of Emerging Market Debt Sergio Trigo Paz tells Bloomberg, as investors respond to an increase in US treasury yields and stimulus programs in emerging markets taper out.

2021 isn’t 2013, he says: Despite seeing their most significant losses since September last week, Trigo Paz is confident EM equities won’t suffer the same fate as in 2013’s “taper tantrum,” when an announcement by the Federal Reserve that it would begin phasing out its crisis-era bond-buying program prompted panic selling and a rise in US treasury yields. This time around though EM equities are likely to avoid a crash, thanks to improving economic fundamentals, fiscal stimulus driving up the prices of commodities, and the possibility of a weaker USD, he says.

OPEC oil production fell to an eight-month low last month as Saudi Arabia made good on its pledge to cut supply in an effort to counteract weak energy demand during the pandemic, Bloomberg reports. OPEC oil output fell by some 920k barrels a day last month, reaching 24.87 mn barrels per day, after Saudi Arabia reduced its daily production by 11%. The pledged cuts came amid efforts to revive collapsed oil prices that had suffered from a global supply glut last year. Prices have now recovered to more than USD 60 a barrel, and the cartel is expected to begin unwinding some of production cuts when it meets later this week, possibly bringing 500k barrels back online.

Down

EGX30

11,471

-0.4% (YTD: +6.9%)

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USD (CBE)

Buy 15.64

Sell 15.74

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USD at CIB

Buy 15.63

Sell 15.73

None

Interest rates CBE

8.25% deposit

9.25% lending

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Tadawul

9,248

+1.2% (YTD: +6.4%)

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ADX

5,711

+0.8% (YTD: +13.2%)

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DFM

2,569

+0.7% (YTD: +3.1%)

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S&P 500

3,879

-0.8% (YTD: +3.0%)

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FTSE 100

6,614

+0.4% (YTD: +2.4%)

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Brent crude

USD 62.99

+0.5%

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Natural gas (Nymex)

USD 2.84

+0.2%

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Gold

USD 1,733

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BTC

USD 48,594.85

-0.6%

The EGX30 fell 0.4% yesterday on turnover of EGP 1.67 bn (12.8% above the 90-day average). Foreign investors were net sellers. The index is up 5.77% YTD.

In the green: Sidi Kerir (+5.0%), Orascom Development Egypt (+4.7%) and Sodic (+3.8%).

In the red: Ibn Sina Pharma (-3.5%), Emaar (-2.8%) and Heliopolis Housing (-2.6%).

Asian markets are mixed in early trading this morning and futures suggest US markets will open solidly in the green.

AROUND THE WORLD

A handful of international news worth knowing this morning:

  • Still-unnamed senior Russian officials are under coordinated sanctions from the US and EU over the poisoning of opposition leader Alexei Navalny, who is currently being held in detention.
  • Saudi Crown Prince Mohammed bin Salman and other Saudi officials are facing accusations of committing crimes against humanity in a criminal complaint Reporters Without Borders has filed with the German Public Prosecutor.

IN DIPLOMACY: Qatari Deputy Prime Minister and Minister of Foreign Affairs Mohammed bin Abdulrahman Al Thani touched down in Cairo yesterday night for a two-day visit to take part in Arab League Council meetings, Masrawy reported.

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Egypt’s construction growth slowed in 2020, but recovery sees it outperforming regional peers: Egypt’s construction sector saw an overall pandemic-driven contraction in 2020, but is now well on the road to recovery, multiple sources indicate. Data shows a strong and sustained sector rebound, fulfilling expectations of reversed contraction trends.

And it’s outpacing regional peers: Sector growth is expected to come in at 10% y-o-y in 2021, up from an expected 5.5% in 2020, a 1Q2021 Fitch report indicates. Egypt has the strongest construction sector growth outlook in the MENA region, with growth expected to come in at an average of 8.3% annually to 2029, Fitch states. By 2029, Egypt will account for 30% of the MENA construction market, Fitch predicted in June. GlobalData’s October 2020 predictions saw MENA’s construction sector contracting 4.5% in 2020, then growing 1.9% in 2021 and 4.1% in 2022.

2020’s pandemic slowdown prompted a downward growth revision by global agencies: Construction in Egypt was expected to grow 7.7% in 2020, down from 9.5% in 2019, according to October GlobalData projections. This shows a slight downward revision from GlobalData’s April projected growth of 7.9% for 2020. The data analytics company had already reduced the construction sector’s 2019-2023 projected growth from an average of 11.3% per annum in 2019 to an average of 9.6% per annum the following year. Fitch also reduced its 2020 growth forecast to 7.5% in an April 2020 report, down from a previous forecast of 9.7%.

And the Planning Ministry is keeping FY 2020-21 growth predictions modest: The construction sector expects profits of EGP 264.9 bn in FY2020-21, down from EGP 253.1 bn in FY2019-20 — with growth projected to come in at 6.4%, a Planning Ministry source tells Enterprise.

But steady medium-term growth is expected: Fitch expects an average annual real growth rate of 8.3% y-o-y between 2021 and 2029. Sector value is expected to more than triple from its current USD 25 bn to USD 89 bn by 2029, Fitch predicted in June.

Gov’t funding is driving the recovery: Construction is among the sectors most expected to recover quickly, according to a November 2020 joint note (pdf) by the Planning Ministry and the International Food Policy Research Institute. Along with manufacturing, it’s also the sector most likely to benefit from the government’s public spending in FY2020-2021 — which comes in at EGP 281 bn.

As is a strong project pipeline: With work on the New Administrative Capital pressing ahead, new business and residential projects under construction, rising demand for infrastructure from a growing economy and population — particularly in terms of energy and transportation, momentum has continued in Egypt’s construction sector, Fitch notes. Momentum is also being driven by wider adoption of public-private partnership (PPP) financing frameworks.

2020’s pause in construction activity was relatively brief, several reports say. While the pandemic temporarily halted work on key construction projects, including the New Administrative Capital, Samalout Thermal and Damanhour Combined-Cycle power plants, Cairo metro line 3, and Ain Sokhna and Safaga port projects, the government was keen for work to continue on major projects as soon as possible — with safety measures in place, the Fitch report notes. This approach is one reason Egypt will remain a regional outperformer, according to Fitch.

And with growth, there’s potential for more private sector participation: Government debt as a percentage of GDP stands at about 85%, so private capital will increasingly have a bigger role to play in funding construction projects, Fitch predicts. The Finance Ministry’s PPP framework will spur this, as its success in making the tendering process more transparent “has translated into greater certainty for investors and a rise in business sentiment,” the report adds.

Underpinning it all, Egypt’s generally robust economic recovery: Egypt was one of only three Middle East and Central Asia economies not expected to contract in 2020, according to the IMF, which upgraded Egypt’s overall 2020 growth forecast to 3.5% in October, from 2% in June, according to its World Economic Outlook (pdf). Growth was forecast for 2.8% in 2021, rising to 5.8% by 2025.

Amid 2020’s global FDI “collapse,” Egypt remained Africa’s top FDI recipient, according to an UNCTAD report (pdf). Though Egypt’s inflows declined some 39% to an estimated USD 5.5 bn, they still account for over half North Africa’s 2020 FDI, which stood at USD 9.4 bn. Greenfield projects often pave the way for future FDI, UNCTAD notes, and Deloitte’s Africa Construction Trends reports show that Egypt has by far the most construction projects on the continent: 46 in 2018 (pdf) and 49 in 2019 (pdf).

This all contributes to construction growth forecasts far exceeding regional peers: The MENA construction sector was expected to contract 4.5% in 2020, before seeing 1.9% growth in 2021 and 4.1% in 2022, GlobalData’s October projections indicate. This comes after covid-19 lockdown measures, other restrictions on activity, and budget revisions leading to megaproject spending cuts, particularly in the GCC, the company reports. Egypt’s government infrastructure funding hasn’t taken the hit of lower oil prices, as some regional peers have, Fitch notes.

Without pro-private sector reforms, our growth trajectory isn’t certain: Egypt could be putting too much emphasis on megaprojects to meet our infrastructure needs, where targeted investments in urban centers like Cairo would be more effective, the 1Q2021 Fitch report cautions. It warns that bureaucracy and insufficient private sector participation could hinder the delivery of large-scale megaprojects. And it notes that its own optimistic growth projections may have to be scaled back again if there’s a need for more covid-19 restrictions.

Your top infrastructure stories for the week:

  • Rail: DHL Industrial Projects will transport 676 passenger coaches from Hungary to Alexandria over the coming 32 months.
  • Tenth of Ramadan dry port: Five consortia — including one led by Dubai’s DP World, one led by China International Marine Containers (CIMC) Group, and the Elsewedy Electric-DB Schenker alliance — have their eyes on the tender to establish the Tenth of Ramadan City dry port.
  • Natgas: Exports from the newly re-opened Damietta LNG plant will likely remain muted until the end of the year due to increased local energy demand expected to soon pick up during the summer.
  • Recycling: Plastic waste recycling company Green Minds plans to invest EGP 100 mn in expanding its monthly recycling capacity to reach 1.3k tonnes.
  • Water: The World Bank and Asian Infrastructure Investment Bank-financed rural sanitation project, connecting unserviced households in eight governorates to running water, is expected to cost some USD 1.15 bn.

CALENDAR

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

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

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.

11-13 March (Thursday-Saturday): Cairo Fashion & Tex trade show, Cairo International Convention Centre, Cairo, Egypt.

11-14 March (Thursday-Sunday) The Cairo International Furniture Show, Le Marche, is set to take place at The Cairo International International Convention Centre.

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

23 March (Tuesday): The second edition of the Egypt Retail Summit takes place at the Nile Ritz Carlton hotel.

25-27 March (Thursday-Saturday): The Real Gate real estate exhibition, Egyptian International Exhibition Center, Cairo.

31 March (Wednesday): Deadline to visit the moroor and get an RFID sticker affixed to your car’s windshield — or run afoul of the Traffic Police.

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.

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).

7 June-9 June (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

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.

1-12 November (Monday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

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.