Tuesday, 20 April 2021

Egypt is one of three MENA economies that will see GDP growth return to pre-covid levels in 2021 -Fitch

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, everyone, and welcome to day eight of Ramadan. We have yet to hear from the Central Bank of Egypt and the EGX on what to expect this weekend, but it looks likely that we’re heading into a three-day break in observance of Sinai Liberation Day on Sunday, 25 April.

The heatwave we’ve been suffering through will finally taper off today, with temperatures peaking at 33°C this afternoon before cooling off to a beautiful 17°C in the evening, according to the Egyptian Meteorological Authority. We’re also in for a good weekend, with the cooler weather continuing until Sunday. Look for daytime highs in the low 30s Wednesday through Saturday.

iSheep, keep your eyes on Apple’s virtual event today: Pundits think the iPhone maker will unveil AirTags and a new iPad Pro with an improved display and faster processor, among other new products. The headline: Spring Loaded. The event will stream at 7pm CLT on Apple’s website and on YouTube.

***CATCH UP QUICK with the top stories from yesterday’s edition of EnterprisePM:

  • Banking sector growth: Egypt’s banking sector looks set to be the second fastest growing in the region, says EFG Hermes in its 1Q earnings forecast.
  • AI tax system: State owned e-tax will work with Microsoft to develop AI-powered electronic tax systems.
  • More finance sources for margin traders: Fund managers are the latest to receive the go ahead from the FRA to finance EGX trading.

** So, when do we eat? We’ll be able to break our fast this evening at 6:25pm, and you’ll have until 3:50am to finish up sohour. It’s day number eight of Ramadan.

MORNING MUST READ- The European Investment Bank (EIB) is being called out on alleged harassment and fear tactics following the second suicide on its premises in seven years, reports Bloomberg. Staff members had previously approached management about mental health issues, and two psychologists hired by the bank to counsel employees in 2016 had warned of “suicidal risk” among staff. EIB denied there is a direct link between the suicides and allegations of endemic psychological abuse in the workplace. The international lender’s responses to Bloomberg focusing instead on its efforts to improve gender equality and management procedures.

The local angle: EIB has worked with Egypt since 1979 and has focused its work here on “financing key water, sanitation and transport infrastructure [including finance for the Cairo Metro and other rail infrastructure] and by enhancing access to finance for SMEs,” it says. EIB is also a limited partner of SME-focused private equity firm Ezdehar.

MARKET WATCH- Green bond issuances in emerging markets are expected to more than double to north of USD 100 bn by 2023 despite lagging sales in regions with climate risks, such as Sub-Saharan Africa, Bloomberg reports. China currently leads the segment, while Europe accounts for the world’s total green bond market — which is now worth USD 1 tn — but Egypt and Indonesia have sold green bonds, the business information service notes. Last September, Egypt took to market a USD 750 mn maiden sovereign green bond issuance that almost 5x oversubscribed after attracting some USD 3.8 bn in bids for the bonds and is planning another issuance in FY2021-2022.

CIRCLE YOUR CALENDAR-

World leaders from 40 countries will descend on the United States this Thursday for a summit on climate change hosted by the Biden administration.

EBRD President Odile Renaud-Basso could visit Egypt sometime this month, the domestic press reported last week. This would be her first official visit to Egypt since she was appointed to head the bank in November.

The Central Bank of Egypt will meet to review rates next Thursday, 29 April. We’ll have our customary poll of economists and analysts on the expected outcome from the central bank’s Monetary Policy Committee at the beginning of next week.

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 Going Green day — your weekly briefing of all things green 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 struggles with pollution are well documented, with Cairo in particular regularly making (and sometimes topping) lists of the world’s most polluted cities. Clearly, this has a major impact on our health, but what’s the economic cost? It turns out that air pollution alone could be costing us as much as EGP 47 bn a year, according to World Bank estimates, using the most recently available data.

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ECONOMY

Egypt among 3 MENA countries to see pre-covid growth rates in 2021: Fitch

Egypt is one of three MENA economies that will see GDP growth return to pre-covid levels in 2021, buoyed by expectations of a strong rebound in the oil and gas and tourism industries this year, Fitch Solutions analysts said at a webinar yesterday. “The Central Bank of Egypt’s (CBE) monetary easing of 400 bps last year, as well as expanded fiscal spending and well-executed stimulus policies, helped to cushion the economic blow of the pandemic,” MENA country risk analyst Selim Elbadri said.

Egypt’s GDP is expected to grow at a 2.9% clip in FY2020-2021, marking a slight downwards revision of the 3% Fitch predicted in January due to a bumpy vaccine rollout. “Vaccinations for priority populations are expected to run from 21 March to 21 Septmeber,” deputy head of country risk Julie Beckenstein said, noting that Egypt’s vaccine rollout is lagging behind regional peers such as Israel, Morocco, and the GCC.

Increased natgas production will be a key driver of economic growth: Fitch Solutions sees the country ramping up its output of natural gas to hit pre-covid production levels in FY2020-2021. Production is expected to plateau at these rates, with a marginal decline of 10% at most throughout FY2021-2022. That’s a steeper decline than the 4.5% dip in production Oil Ministry has penciled in for the upcoming fiscal year, with daily natural gas production expected to come in at 7.2 bcf/d, down from 7.45 bcf/d during the current fiscal year.

And a robust tourism sector recovery is expected to drive medium-term growth, with the economy expected to expand at a 5% clip in FY2021-2022, according to Elbadri. Some 500k tourists visited Egypt in 1Q2021, generating USD 600-800 mn in revenues, with some 2 mn tourists visiting the country in the nine months since commercial flights resumed following the initial wave of the virus. Tourism Minister Khaled El Anany recently said Egypt could see a return to pre-covid visitor numbers as early as fall 2022.

Israel and Qatar are also expected to be among MENA’s best-performing economies, with the latter leading the recovery in the GCC as the only Gulf nation to return to pre-covid GDP growth rates in 2021. The slowdown in the recovery of other regional economies was attributed to the contracting oil sector as a result of the OPEC+ mandated production cuts. But Fitch is optimistic that an OPEC+ agreement to gradually increase oil production from May to July as fuel demand rises will drive growth in GCC countries such as Saudi Arabia and the UAE, though likely not enough to return them to pre-pandemic growth rates, Elbadri said.

REGULATION WATCH

Mobile wallet users can now borrow + deposit under new regs

Mobile wallet users will soon be able to access loan and saving services in real time under new regulations (pdf) the Central Bank of Egypt (CBE) issued yesterday. The regs also clear the way for interoperability between mobile wallets and bank accounts, allowing funds to be transferred between them.

Creditworthiness for mobile wallet users will also be determined based on “behavioral evaluations,” including whether or not they keep up with utility bill payments, according to the CBE statement. The new mechanism is designed for borrowers who don’t have credit histories or any prior records with the traditional banking system. State-backed credit rating agency iScore is currently working on setting up this new evaluation mechanism, the CBE said.

The new regs come as the number of mobile wallets in Egypt is growing: The country currently has north of 20 mn wallets, with the value of transactions on these wallets growing a whopping 300% in 2020 to EGP 100 bn, according to the statement. Between March and October last year, the number of wallets jumped at least 17% to 14.4 mn thanks to covid-19.

LEGISLATION WATCH

Senate opposes Thanaweya Amma 2.0, Shawky defends planned overhaul

Senate votes against proposed Thanaweya Amma overhaul in general assembly: Proposed legislative amendments that would have changed the assessment model for Thanaweya Amma were rejected by Egypt’s upper house of parliament yesterday, according to Youm7. The changes would have seen students assessed for their Thanaweya Amma degree based on the average of their end-of-year grades over the three years of secondary school instead of their exam scores in the final “certificate year.” Senators argue the changes — which would allow students to resit exams for EGP 5k per subject — contravene the constitutional right to education at no charge. A report by the Senate Education Committee also cited concerns over the integrity of electronic exams, which would be allowed under the amendments.

Reminder: The Senate’s vote is not binding. The bill, alongside the committee report, should now make its way to the House of Representatives, the country’s lower house of parliament. The bill will eventually make its way to the floor of the House for a plenary vote on whether to send it to President Abdel Fattah El Sisi for signature.

Education Minister Tarek Shawky criticized the Senate committee report that served as the basis for the plenary-session vote, arguing that students already pay huge sums to private tutors under the current system, which he says is in need of a major facelift. Shawky blamed parents for opposing the changes in order to maintain the status quo and ensure a familiar route to university for their children. The minister also gave his two cents in a phone-in with El Hekaya’s Amr Adib (watch, runtime: 3:51).

OTHER LEGISLATION NEWS-

The House Legislation Committee has greenlit proposed amendments to the Disabilities Act that would, if passed in a final vote, toughen penalties for those convicted of bullying persons with special needs. Under the changes, those convicted of group bullying or mistreatment of people with disabilities could be subject to up to three years in prison and fines of up to EGP 200k. The Senate signed off on the amendments earlier this month.

Nurseries will be treated as MSMEs, granting them eligibility for all incentives available under the MSMEs Act under new directives from President Abdel Fattah El Sisi, according to an Ittihadiya statement. These include tax markdowns to a rate of 1% of the total growth in sales per year. The president also instructed his government to continue giving unlicensed nurseries temporary licenses until they complete the necessary paperwork.

A bill regulating blood donation and the manufacturing and collection of plasma is now law of the land after being greenlit by President Abdel Fattah El Sisi, Al Shorouk reports.

TRANSPORT

Qalyubia crash investigation rolls on

Four railway officials were detained yesterday as an investigation into this week’s Qalyubia train crash entered its third day, Masrawy reports. The report suggests the officials include the train conductor and his assistant, contradicting an earlier report that said the conductor had died in the crash. The incident killed at least 11 people and injured 98 after a train derailed in the city of Tukh.

El Wazir in parliament soon? Transport Minister Kamel El Wazir could be summoned to the House of Representatives to discuss the Qalyubia crash and the recent streak of railway accidents, after House Media Committee member Amal Salama submitted a request for the House to “hold the minister accountable,” according to Masrawy. Two other MPs — Amira Adly and Freddie Al Bayadi — have also submitted an “urgent memo” to inquire about the crash, but the memo does not necessarily mean the minister would be required to appear in the House, Adly told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 8:39). El Wazir himself seems eager to address MPs on the incident and to discuss his ministry’s plan to overhaul the country’s railways, Ala Mas’ouleety’s Ahmed Moussa noted (watch, runtime: 3:15).

BANKING + FINANCE

Beltone on board to manage CBE margin trading support fund?

The Central Bank of Egypt (CBE) has reportedly tapped Beltone Financial to manage a new margin trading fund with a preliminary allocation of EGP 1 bn that will be deployed to support margin lending through brokerages, Al Mal reports, quoting what it says are sources in the know. The fund will give brokerages access to financing at competitive rates under certain conditions the CBE is expected to announce at a later date, the sources said. It was announced last month in a bid to boost trading volumes on the EGX, and its initial EGP 1 bn capital is expected to increase periodically when needed, CBE Deputy Governor Rami Aboul Naga said at the time.

The fund is part of a series of recent moves by regulators to boost activity on the bourse, and draws from a larger EGP 20 bn allocation the CBE set aside to support the exchange at the onset of the pandemic in March. It follows decisions by the Financial Regulatory Authority earlier this year to allow fund managers and non-bank firms to finance brokerages engaging in margin trading. The FRA has also proposed measures that would put a cap on the practice, to mitigate the risk of a boom in investing borrowed funds on the EGX.

DIPLOMACY

Ethiopia is really just trolling us now

Taking a leaf out of our book, Ethiopia has turned to the United Nations Security Council to complain that Egypt and Sudan “are not negotiating in good faith” to resolve the Grand Ethiopian Renaissance Dam (GERD) crisis, according to a statement from the Ethiopian Foreign Ministry. In a letter penned to the Security Council, Addis Ababa claims that Egypt and Sudan are the ones stalling the negotiation process by refusing to “make the necessary concessions” to reach a mutually beneficial agreement between the three countries.

Egypt and Sudan’s proposal to bring in mediators to resolve the impasse is, in Ethiopia’s books, “internationalizing” the talks “to exert undue pressure” on Addis Ababa, the statement says. Ethiopia is still rattling on about Cairo and Khartoum wanting to “maintain an unjust status quo” by reaching a lawfully binding agreement on the filling and operation of the dam — which is meant to ensure that one country doesn’t face fatal flooding and the other still has access to enough water.

Ethiopia’s tattling means the Security Council has now received letters from all three countries: Sudan sent a letter to the council just a few days ago asking the council to back its proposal to bring in international mediators, while Foreign Minister Sameh Shoukry sent a letter last week to the council after the latest round of talks failed yet again to yield a breakthrough.

Meanwhile, Shoukry made stops in Kenya, Comoros, and South Africa yesterday as part of his Africa tour to brief the continent’s leaders on the latest developments in the GERD stalemate. The tour comes as Egypt has been on a diplomatic blitz of late to rally international support for its position on the dam.

And while we’re on the subject, a bit of fact checking on Ethiopia’s other GERD claims, courtesy of Egypt’s Irrigation Ministry: Ethiopia’s insistence on moving ahead with the second filling of the dam’s reservoir this summer will almost certainly result in lower levels of water flow to Sudan and Egypt, particularly since the spillways through which Ethiopia says it will release water won’t be able to handle the amount of water the downstream countries need, according to a statement. According to the ministry, these two spillways can only handle a combined 50 mn cbm of water.

The urgency of the situation certainly isn’t lost on the talking heads: Kelma Akhira’s Lamees El Hadidi said it would be nothing short of a disaster if Ethiopia moves ahead with its plans, after Irrigation Ministry spokesperson Mohamed Ghanem recapped the realities of the spillways (watch, runtime: 6:46). Ala Mas’ouleety’s Ahmed Moussa, meanwhile, couldn’t contain his anger at Ethiopia and railed against its “attempts to control Egypt” by taking unilateral measures (watch, runtime: 4:03).

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ENTERPRISE+: LAST NIGHT’S TALK SHOWS

The talking heads were focused yesterday on the latest on the Qalyubia train crash and the Grand Ethiopian Renaissance Dam negotiations. We have both stories in detail in the news well, above.

The government’s fuel pricing committee is set to announce “within days” fuel prices for 2Q2021, deputy head of the EGPC Khaled Osman told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 4:28). The committee’s deliberations are taking longer than expected because of the fluctuation in global oil prices, Osman said, but didn’t provide any indication of whether or not we should expect to pay more at the gas pump for the next three months.

EGYPT IN THE NEWS

It’s another morning of foreign press coverage squarely focused on the Qalyubia train crash for Egypt. We have all the updates in the news well, above.

ALSO ON OUR RADAR

Egyptian security forces killed three Islamist terrorists involved in the execution of a 62-year-old Christian man, Nabil Habashy, last Saturday in North Sinai, the Interior Ministry said in a statement yesterday.

Exporters have received EGP 2.4 bn of subsidy arrears from the Export Development Fund since February, when the Trade and Industry Ministry launched the second phase of the subsidy program that allows exporters to receive their payments lump-sum, provided they take a 15% haircut. The ministry has also extended until the end of April the deadline for exporters to apply for subsidy payments, to receive the payments in June.

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

  • Canadian mining companies are interested in ramping up their investments in Egypt, Canadian Ambassador to Egypt Louis Dumas said yesterday during a meeting with Oil Minister Tarek El Molla.
  • Pharma platform Yodawy and health ins. agency MedNet Egypt launched a partnership, the platform said in a press release (pdf).
  • Egypt should be back on JPMorgan’s emerging-market government bonds index in October or November, Advisor to the Finance Minister for Fiscal Policies Nevine Mansour tells the local press.
  • Journalist and Islamist politician Magdy Hussein was released yesterday after serving his five-year prison sentence on charges of promoting extremist views and disseminating fake news.

COVID WATCH

Doctors’ covid-19 death toll rises

Some 50 medical professionals have died from covid-19 in the past two weeks, the Doctors Syndicate noted in a letter to the Health Ministry, urging the ministry to speed up its inoculation of medical staff and frontline workers. The country kicked off its vaccination program with the most at-risk frontline healthcare workers in January. The syndicate also asked the ministry to ensure personal protective equipment is available for all frontline workers, pointing to the recent spike in infections and fatalities among them in the recent period.

So far, a total of 467 doctors and other medical professionals have died from covid-19 since since the outbreak of the pandemic last year.

The Health Ministry is looking to increase the capacity of its vaccine centers to accommodate 112k individuals per day, Minister Hala Zayed said at a cabinet meeting yesterday, according to a statement. The ministry is also working on setting up more vaccine centers across the country. We currently have 193 centers up and running nationwide, but Zayed has signaled that we could soon have as many as 350 operational vaccination centers.

The elderly can still register for a covid-19 vaccine offline, since some have complained that they aren’t able to access the ministry’s online portal, presidential health advisor Mohamed Awad Tag Eldin reminded viewers on eXtra News yesterday (watch, runtime 17:27).

Spotlight on oxygen supplies again? Prime Minister Moustafa Madbouly ordered the Health Ministry to ensure it has at least 3 mn liters of medical-grade oxygen in its reserve stockpile, besides hospitals’ daily consumption. Some 30 oxygen generators will soon be distributed to the health and education ministries’ hospitals as of June, while the medical gas networks for 40 other hospitals are also getting an upgrade, Zayed said at yesterday’s meeting. The focus on ensuring adequate oxygen supplies comes after alleged shortages in several public hospitals earlier this year.

The Health Ministry reported 852 new covid-19 infections yesterday, up from 850 the day before. Egypt has now disclosed a total of 217,186 confirmed cases of covid-19. The ministry also reported 40 new deaths, bringing the country’s total death toll to 12,778.

Many of the world’s poorest countries are seeing their vaccine rollouts slow to a trickle as the World Health Organization’s Covax initiative falls short of expectations, writes the Wall Street Journal. This is in large part due to India — Covax’s main supplier — halting the export of the jab as it tries to meet the surging demand at home. The IMF has warned that the slow vaccine rollout in some regions of the developing world, such as in Sub Saharan Africa, threatens to overlook pockets of infection that could derail global efforts to eradicate covid 19.

PLANET FINANCE

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GLOBAL M&A WATCH- UK competition watchdog to probe multi-bn acquisition of country’s most valuable tech business: The UK’s Competition and Markets Authority is investigating the potential USD 40 bn acquisition of Cambridge-based Arm Holding by the US’ Nvidia on national security grounds, according to a statement. Arm’s business is seen as vital to the UK’s national security infrastructure, and its semiconductors are used in defense technologies, according to Bloomberg. Nvidia agreed to the acquisition of Arm, which is owned by Japan’s SoftBank, late last year in what could become the largest in a recent series of big-ticket transactions in the semiconductor industry, as demand for electronics surged and supply chain disruptions fueled a global chip shortage.

One of the world’s largest lithium mining groups could be created with the USD 3.1 bn merger of two Australian companies, as demand for the metal essential to battery manufacturing continues to grow along with the popularity of electric vehicles, the Financial Times reports.

Credit Suisse is still reeling from the effects of the Archegos debacle, as two executives from the Swiss bank’s prime brokerage unit joined a growing list of staff departures following the USD 4.7 bn loss incurred by hedge fund Archegos Capital Management, the Financial Times reports, citing an internal memo. Credit Suisse is expected to report a hefty USD 960 mn in 1Q2021 losses because of the Archegos fallout when it officially releases its earnings tomorrow.

BTC and Coinbase slump fuels concerns of waning crypto craze: A basket of crypto-linked equities tracked by Bloomberg fell 9% last week, after BTC prices and shares in newly listed crypto platform Coinbase dipped over the weekend. Despite the concerns, analysts still expect Coinbase to rise 52% over the coming year.

Up

EGX30

10,441

+0.8% (YTD: -3.7%)

None

USD (CBE)

Buy 15.63

Sell 15.73

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USD at CIB

Buy 15.63

Sell 15.73

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Interest rates CBE

8.25% deposit

9.25% lending

Up

Tadawul

10,098

+0.5% (YTD: +16.2%)

Down

ADX

6,102

-0.4% (YTD: +21.0%)

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DFM

2,633

-0.1% (YTD: +5.6%)

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S&P 500

4,163

-0.5% (YTD: +10.8%)

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FTSE 100

7,000

-0.3% (YTD: +8.4%)

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Brent crude

USD 67.38

+0.5%

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Natural gas (Nymex)

USD 2.74

-0.2%

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Gold

USD 1,769.50

-0.1%

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BTC

USD 53,934.13

-4.78%

The EGX30 rose 0.8% yesterday on turnover of EGP 735 mn (45% below the 90-day average). Foreign investors were net sellers. The index is down 3.7% YTD.

In the green: Pioneers (+2.7%), Ezz Steel (+2.3%) and Palm Hills Development (+2.3%).

In the red: Edita (-4.1%), Cleopatra Housing (-1.8%) and Fawry (-0.9%).

Asian markets are mixed this morning, with the Nikkei and Hong Kong’s Hang Seng in the red and Shanghai and Korea’s Kospi in the green. Futures suggest Wall Street will open in the green this afternoon, while shares in Toronto look set to open down. Shares in Europe look set to open largely in the red this morning.

AROUND THE WORLD

It’s official: Iran and Saudi Arabia are looking to patch things up. Iran’s Foreign Ministry spokesman Saeed Khatibzade confirmed during a press conference yesterday that the two countries had held direct Iraq-sponsored talks to mend their regional rift after almost five years of silence, Iranian news agency IRNA reports. Khatibzade did not confirm or deny earlier press reports that the two countries had held talks in Baghdad this month, though Saudi officials had earlier denied engaging in negotiations with Iran. The meetings come as Washington distances itself from Saudi Arabia and pressures the kingdom to end its military campaign against Houthi rebels, while pushing for the revival of the 2015 Iran nuclear agreement.

greenEconomy

What is air pollution costing Egypt? At least EGP 47 bn a year, the World Bank estimates. A USD 200 mn International Bank for Reconstruction and Development loan was greenlit two weeks ago by the House Energy and Environment Committee. Its aim? To tackle Cairo’s notorious air pollution. And it’s urgent: Poor-quality air causes long-term health issues, while additional strain on healthcare systems and reduced productivity from chronic illnesses and missed workdays bring a sizable economic hit. A World Bank report (pdf) relying on 2016-2017 data (the most recently available for Egypt) estimated that air pollution in Greater Cairo alone could be costing us an estimated EGP 47 bn ― in 2017, that was equivalent to 1.35% of our GDP.

Just how bad is Egypt’s pollution, anyway? One of the worst globally, so yeah, pretty bad. A 2020 study combining data on air quality, light, and noise pollution found Cairo to be the world’s most polluted city, out of 48 surveyed by UK solar comparison website The Eco Experts. 2017 saw an estimated 12.6k premature deaths from Greater Cairo’s air pollution and a collective 3 bn days of morbidity (days where people lived with illness) because of outdoor air pollution in Greater Cairo and inadequate water, sanitation and hygiene throughout Egypt, the World Bank report states.

Cairo’s haze is even more harmful than it looks: Air pollution is frequently measured by the concentration of PM2.5 — a microscopic particle 2.5 microns wide and almost 30 times smaller than the diameter of a human hair. On hazy Cairo days, high levels of PM2.5 enter our respiratory tracts and lungs. The WHO identifies ‘safe’ levels of PM2.5 as under 10 micrograms per cubic meter (ug/m3), and estimates reducing concentrations to this level from the levels of 35 μg/m3 common in many developing cities could lessen air pollution-related deaths by 15%. Between 1999 and 2016, Greater Cairo’s average PM2.5 concentration was 84 µg/m3, with the lowest concentration being 66 µg/m3, according to the World Bank report.

On average, Cairo’s air contains levels of PM2.5 that are 11.7 times higher than the recommended “safe” level, WHO data shows. Estimates use data from the Egyptian Environmental Affairs Agency (EEAA), and there are no nationwide estimates because of insufficient air quality monitoring outside of Greater Cairo, the World Bank report says.

Where’s it coming from? Burning materials, particles formed from other pollutants, and motor vehicles seem to be the biggest culprits. The most comprehensive studies monitoring Greater Cairo’s levels of PM2.5 took place in winter and fall of 1999, and summer of 2002. They found that open burning (including burning of agricultural waste in the Delta), secondary particulates (particles that form in the atmosphere from other gaseous pollutants, like sulfates, nitrates, chlorides), and motor vehicles were the biggest sources of PM2.5. Geological material, like wind-blown dust, was only responsible for about 9% of the PM2.5 in Greater Cairo’s air, according to this study — though a later 2010-2011 study recorded higher figures. Accurate and updated information about the greatest sources of PM2.5 isn’t easy to come by, the World Bank report notes.

But it clearly results in increased health risks and premature death: Of the estimated 12.6k annual premature deaths from PM2.5 exposure in Greater Cairo in 2017, 59% were from ischemic heart disease (heart problems caused by narrowed arteries), 14% from acute lower respiratory infections, 13% from stroke, and 14% from lung disease, lung cancer and type 2 diabetes, the World Bank report shows.

And brings soaring costs: Outdoor PM2.5 air pollution in Greater Cairo cost some EGP 47 bn in 2016-2017. Per capita, outdoor air pollution in Greater Cairo cost EGP 2.7 bn per 1 mn people in 2016-2017, the World Bank report shows.

One glimmer of good news is PM2.5 per capita deaths could be falling: Greater Cairo’s PM2.5 concentrations did improve between 1999 and 2016, with annual deaths per 100k people declining by 8% — from 79 to 73 — during that time, the World Bank report reveals.

But this is effectively offset by our ballooning population: Rapid population growth saw Egypt’s total annual deaths from PM2.5 continue increasing during this time. With the UN projecting that we’ll hit 200 mn before 2075, the collective burden on healthcare services and workforce disruption is set to keep increasing too.

The sizable economic hit from air pollution is a global problem: The total global cost of premature deaths, disabilities, chronic disease and sick leave from fossil fuel air pollution alone was estimated at USD 2.9 tn, or 3.3% of global GDP, in 2018, according to a report (pdf) by the Centre for Research on Energy and Clean Air. Fossil fuel PM2.5 air pollution was responsible for 1.8 bn days of work absence globally that year, the report estimates.

Even within the global context, MENA — including Egypt — is particularly impacted: In 2018, 97% of cities in low and middle-income countries with over 100k inhabitants didn’t meet WHO air quality guidelines, with MENA and Southeast Asia having the worst performance, according to energy and environment analyst Mahmoud Abouelnaga. In Egypt, total welfare losses — a measure often used by governments to assess the financial and intangible impacts of premature mortality — for 2013 from outdoor air pollution were an estimated USD 31.5 bn.

Ultimately, cutting pollution is a no-brainer. The challenge is how to do it without impeding development. MENA’s rapid urbanization and widespread reliance on fossil fuels leave us vulnerable to high levels of air pollution, writes Abouelnaga. Agriculture and industry contributed some 11.7% and 34.3% respectively to Egypt’s GDP in 2017, and must be supported to grow. So how can we reduce pollution without curbing our own economic growth?

The answer could lie in a combination of government and private sector initiatives, development finance institution support, and lessons learned from other economies. We look at this in part 2.

Your top climate stories for the week:

  • Eco-friendly universities: The Environment Ministry and the German University in Cairo plan to launch a platform for eco-friendly products, allowing university students to participate in the “Go Green” initiative.
  • Natgas: Egypt’s government plans to convert 450k cars to run on natgas within three years under its natgas transition plan.
  • Climate summit: Egypt has been left out of the US-hosted Leaders Summit on Climate, which will see 40 world leaders head to the United States this Thursday through Saturday.
  • Green New Plan: A universal basic income for workers exposed to job loss from transitioning away from fossil fuels could help push along a global green push.

CALENDAR

April: The government’s fuel pricing committee is scheduled to meet for its quarterly review of prices.

April: EBRD president Odile Renaud-Basso expected to visit Egypt.

20-22 April (Tuesday-Thursday): Renaissance Capital’s conference RenCap ESG – a New Focus for EM will take place virtually.

25 April (Sunday): Sinai Liberation Day.

29 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC — the holiday could be observed on a Sunday or a Thursday).

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): Coptic Easter Sunday.

3 May (Monday): Sham El Nessim.

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

16-19 May (Sunday-Wednesday): The Arabian Travel Market (ATM) is taking place in Dubai. ATM is an international travel and tourism event to promote the Middle East as a tourist destination.

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).

7-9 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.

17-20 June (Thursday-Sunday) : The International Exhibition of Materials and Technologies for Finishing and Construction (Turnkey Expo), Cairo International Conference Center.

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.

30 June- 15 July: National Book Fair.

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

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.

12-15 September (Sunday-Wednesday): Sahara Expo: the 33rd International Agricultural Exhibition for Africa and the Middle East.

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.

30 September-8 October (Thursday-Friday): The 54th session of the Cairo International Fair, Cairo International Conference 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.

12-14 October (Tuesday-Thursday) Mediterranean Offshore Conference, Alexandria, Egypt

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.

1-3 November (Monday-Wednesday): Egypt Energy exhibition on power and renewable energy, Egypt International Exhibition Center, Cairo, Egypt

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

29 November-2 December (Monday-Thursday): Egypt Defense Expo

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.

May 2022: Investment in Logistics Conference, Cairo, Egypt.

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.

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