Tuesday, 26 October 2021

EnterpriseAM — El Sisi won’t look to extend state of emergency

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, friends. We kick off hump day with a Good News Edition of Enterprise, starting with word that President Abdel Fattah El Sisi will not seek to extend the state of emergency that has been in place since 2017. We have full coverage in the news well, below.

ALSO FROM THE DEPT. OF VERY GOOD NEWS- Your Sinopharm jab will soon be able to get you in the US: The United States will allow all international travellers from any destination who have received any of the seven WHO recognized vaccines to enter the country starting 8 November, Reuters reports. A presidential order signed by Joe Biden yesterday said the country would “adopt an air travel policy that relies primarily on vaccination.”

Canada, everyone else in the European Union: Wouldn’t you nice people like to follow suit?

You’ll even be able to travel if you’re unvaccinated: Travellers from countries in which less than 10% of the population has been vaccinated — including Egypt — are exempt from the new rules, but must test negative for covid-19 one day before flying. Children under 18 are also exempt.

Prince in Egypt: British royal family members Prince Charles and the Duchess of Cornwall will visit Cairo on November 18-19, according to a statement. The pair will be formally welcomed by President Abdel Fattah El Sisi in Cairo before traveling to Alexandria on the second day of their visit. The Queen’s eldest son will focus on environmental issues during the trip, including Egypt’s nomination to host the UN’s COP27 climate conference next year, the statement read. Before arriving in Cairo, the two will spend three days in Jordan to mark the country’s centenary.


SIGN OF THE TIMES #1- Egypt has a walk-on role in the Facebook Files, with the Associated Press reporting that two years ago, Apple threatened to ban Facebook from its app store “over concerns about the platform being used as a tool to trade and sell maids in the Mideast.” While most of the “material” on the platform originated in Saudi Arabia, “about a quarter” of it came from Egypt, the newswire reports.

Speaking of Apple: The first reviews of the new 14” and 16” MacBook Pros powered by the M1 Max and M1 Pro chips are starting to trickle out. Verge boss Nilay Patel is clearly impressed in this first impressions review (read or watch, runtime: 6:05) and Jon Gruber over a Daring Fireball serves up enthusiasm and nuance in equal measure. Both are must-reads for our fellow iSheep and normals alike. All we can say is: Thank God for ports.

PSA- Are you freaked out over the prospect of hyperinflation? Brewing energy and supply chain / logistics crises are driving up prices, and the chattering class is losing its mind. What if the risk is deflation, not inflation? Read on:

THE SMARTEST THING YOU’LL READ TODAY is over on Cathie Wood’s Twitter, where she trenchantly suggests Jack Dorsey’s crystal ball is busted. Wood is the carefully followed CEO and CIO of asset manager Ark Invest. Responding to Twitter and Square CEO Jack Dorsey’s claim that “hyperinflation is going to to change everything. It’s happening,” Wood retorts that our future is much more likely to be about deflation. She points to both trends both secular (technologically enabled innovation thanks to things like AI and What wood calls “creative destruction”) and cyclical (businesses have over-ordered — and rise of ESG is pushing the world away from oil, no matter what). Do yourself a favour and read the thread in full. It’s time well-spent.

SIGN OF THE TIMES #2- Tesla has joined the USD 1 tn club, after its market value surged yesterday, making it the second-fastest company after Facebook to reach the milestone, Bloomberg reports. The electric car maker’s shares surged following news that Tesla’s Model 3 was the top selling car in Europe last month. Car rental giant Hertz Global has also placed a record order of 100k vehicles, amid the global surge in demand for electric vehicles. Tesla joins Apple, Microsoft, Alphabet, and Amazon — all of which have a market cap of over USD 1 tn.

Elon is now personally worth more than Exxon Mobil, according to Bloomberg’s bn’aires index.

THE BIG STORY ABROAD-

At least seven protesters have been killed and 140 injured in clashes between civilians and the military following the latter’s takeover of the country. Sudan’s military forces arrested key civilian ministers and members of the transitional sovereign council in the early hours of Monday morning, before announcing a state of emergency and the dissolution of both the council and the government in what was seen as a major blow to the country’s political transition. The story is getting wide attention globally: Reuters | Associated Press | Bloomberg | Financial Times.

The Madbouly government announced the creation of a special operations room and dedicated email to receive inquiries from Egyptians in Sudan, while EgyptAir cancelled its afternoon flight to Khartoum yesterday. Foreign Minister Sameh Shoukry yesterday underscored the need to maintain stability in Sudan in a phone call with US Special Envoy for the Horn of Africa Jeffrey Feltman.

CLOSER TO HOME- Turkish President Recep Tayyip Erdogan appeared to walk back his order to expel 10 Western ambassadors, saying in a televised statement, “our intention was never to cause a crisis,” according to Bloomberg. Erdogan made the move after the expulsion demand prompted the TRY to tumble and almost cost the country key partnerships with the west.

HAPPENING TODAY-

The European Investment Bank (EIB) will hold a seminar on financing water infrastructure (pdf) today at the Nile Ritz Carlton.

A webinar on sustainable transport featuring keynote speeches by EU ambassador to Egypt Christian Berger and Public Enterprises Minister Hisham Tawfik will take place this morning at 10am. Register here.

HAPPENING THIS WEEK-

It’s interest rate week: The Central Bank of Egypt will meet this Thursday to discuss interest rates. All 12 analysts polled by Enterprise see the central bank leaving rates on hold for another meeting, citing the need to maintain portfolio inflows and uncertainty over inflation.

And then it’s the Fed’s turn: The US Federal Reserve will meet to review interest rates on 2-3 November (Tuesday-Wednesday next week). The Fed is widely expected to keep interest rates steady in order to start tapering its asset purchases this month, though inflationary pressures are causing unease among some officials over the timeline, the Wall Street Journal reports. The longer the US can put off a rate hike, the better, as lower US interest rates relieve pressure on EM treasuries and maintain the appeal of our carry trade. One analyst we polled suggests that investors in Egyptian debt have already priced in a Fed rate hike.

CIRCLE YOUR CALENDAR-

We’re looking forward to reading Justo a Tiempo, a memoir penned by our friend ​​Maria Laura Sanchez Puerta (Morning Routine) about her family’s battle against cancer. Sanchez Puerta, who is the World Bank’s human development program leader in Egypt, is launching her memoir on Sunday, 7 November at Osana in Maadi. Argentinian Ambassador Eduardo Varela and Cairo University Professor Rasha Abboudy will also be speaking at the event.

SPOOKY — it’s almost the end of October. Here are dates for some key news triggers next month:

  • PMI: November’s purchasing managers’ indexes for Egypt, Saudi Arabia and the UAE will land on Wednesday, November 3.
  • Foreign reserves: October’s foreign reserves figures will be out sometime during the first week of November.
  • Inflation: Inflation figures for October will be released on Wednesday, 10 November.

Women entrepreneurs have until 6 November to apply to a new accelerator program launched by NGO Nahdet El Mahrousa offering up to EGP 200k in grants, mentorship, and other business support. Founders and social enterprise leaders working in ICT, creative industries, or on projects that support gender equality are eligible to apply. The program, Rabeha, was launched in partnership with UN Women Egypt, the Egyptian National Council for Women, Global Affairs Canada, and other partners. You can apply here.

It’s another busy week for conferences, exhibitions, and other business events in Egypt:

  • The two-day Intelligent Cities Exhibition & Conference takes place tomorrow and Thursday, 27 and 28 October.
  • The Middle East Angel Investment Network’s Angel’s Oasis retreat runs from tomorrow through Friday in El Gouna, with separate pricing for in-person and virtual attendance.
  • Grassroots community leaders aged 25-38 have until tomorrow to apply for the US State Department-backed Community Solutions Program. Applications can be submitted here.

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 green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: In Egypt and around the world, a growing number of people are turning to veganism as a way to reduce their personal carbon footprint and do their part for the environment. Meat and dairy products are widely known to be major culprits in the emission of greenhouse gases, but plant-based and vegan products can also have an outsized impact on the environment — whether because of their water consumption or because of how supply chains are set up, and the process of getting products from farm to table. We look at how environmentally friendly going vegan actually is.

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This is your shortcut to a comprehensive platform, designed to bring you closer to 10 mn m2 of incomparable experiences, and a colorful art gallery inspired by the natural beauty of Somabay.

POLITICS

State of emergency will not be extended- El Sisi

Egypt’s state of emergency will not be renewed for the first time since 2017 as the country has grown more secure and stable, President Abdel Fattah El Sisi said on Facebook yesterday. The state of emergency, which was declared in 2017 following a large-scale terror attack and had been extended by presidential decree in three month increments ever since, will not be extended for a further three months as had been customary, the president said. The latest three-month period ended over the weekend. The story is getting play in the foreign press, with Reuters, the Associated Press, the New York Times, and Russia's Sputnik among those taking note.

Background: The state of emergency was announced in April 2017 after terrorist attacks at the time in Alexandria and Tanta that killed dozens of Coptic Christians. It allowed warrantless arrests, gave security forces the right to detain suspects without evidence, and directed authorities to speed up the prosecution of suspects, as well as established special and emergency courts. El Sisi had previously promised that emergency rule would not be extended indefinitely, as was the case during the Mubarak era.

When it was first imposed, the decision triggered some push-back from foreign media outlets, with many at the time angling in on how a state of emergency erodes freedoms. Locally, critical voices were worried that a permanent state of emergency woudn’t do much in the fight against terrorism and could have a negative impact on the investment climate.

The business community welcomed the news last night, with celebrity b’naire Naguib Sawiris tweeting that the decision is “a brave and cheerful move … [that] enhances stability … and encourages investment and tourism.”

ECONOMY

Enterprise talks to IMF Director for ME and Central Asia Jihad Azour

Enterprise talks to Jihad Azour, IMF Director for ME and Central Asia: With the commodities supercycle in full swing across the globe, accompanied by rising inflation, the International Monetary Fund (IMF) revised its growth projection for Egypt’s economy in its latest global economic outlook to 5.2% in FY2021-2022 , down 0.5 percentage points from the 5.7% growth it had forecast for the same period in April. Overall MENA growth projections on the other hand were revised upwards by 0.4% to 4.1% in 2022.

We sat down with director of the Middle East and Central Asia Department at the IMF Jihad Azour to talk about the MENA’s upgrade and Egypt’s downgrade, the impact of rising commodity prices, inflation and vaccine supply on the region.

Edited excerpts from our conversation-

Covid has impacted Egypt’s growth because the country’s economy is highly dependent on tourism and social contact sectors. Egypt’s GDP growth held strong during 2020 due to the buffers it had built in the past, including monetary and fiscal measures. But the IMF’s downgrade of Egypt’s growth projections in FY2021-2022 comes in light of declining tourism numbers over the previous year. Accelerating vaccination, as well as reactivating the structural reform agenda, will be important factors in helping Egypt accelerate recovery,

We expect the increase in prices in light of the rise in commodity prices and inflation rates to remain this year, and then gradually start receding in 2022. The real issue for us this year is the fact that the increase is driven by food prices, and food is an important item in the basket of many families in the region, especially those who are in the low income vulnerable categories. It's very important to address the social dimension of that. We still think that with inflation being temporary, the measures that are introduced so far are sufficient, but we are asking central banks to remain vigilant and when needed, to take additional measures to avoid any de-anchoring of inflation expectations.

Covid-19 disruptions to supply chains had a milder effect on oil exporters thanks to the subsidy system in place. Measures introduced early on, as well as vaccinations, allowed them to have a smoother re-opening.

Current inflation risks should not necessarily be met with extreme measures. In the majority of cases, inflation is being driven by strong recovery and capacity shortages. Therefore, it's important not to introduce permanent measures if the inflation risk is not expected to be long-lasting.

But there are a few strategies that could reduce tensions on artificially inflated prices. These include improving supply chains, reducing any potential bottlenecks that exist in your economy, and allowing more market practices to prevail. There is also a need to recalibrate the support measures that were introduced during covid to make them more effective at serving those who are in need, while unwinding some of the measures that are no longer necessary.

The impact of rising oil prices on energy-importing countries will be seen in their current account first. This could lead to an increase in costs of production, especially in countries where the public transportation system is not efficient. It could increase the cost of transport, especially for low- and middle-income groups in countries with generous subsidy systems or inefficient utilities, like Lebanon, where this is already taking place.

Countries like Egypt, who had already reformed their subsidy system, will feel less of an impact on their balance of payments. Several countries have already started to reform their subsidy system, gradually moving from a commodity-based subsidy to an income-based subsidy, which lessens the impact of rising prices. In Egypt, for example, the development of the Takaful and Karama programs and the removal of gasoline subsidies helped the government address this issue and limit its impact.

Increased vaccination rates and the recovering oil sector are behind MENA’s improved growth forecast of 4.1% in 2022. Countries who have accelerated vaccination were able to recover faster. Since the beginning of the year, there has been improvement in economic activities, especially in GCC countries and Morocco, which have introduced efficient tracing and tracking measures, besides pushing for vaccinations. This can also gradually be seen in Egypt, Jordan and Tunisia. Saudi Arabia, for example, was able to reduce its daily infection count from 5k to 50, and the gradual improvement in oil and gas prices helped the recovery of all GCC economies. In 2021, the non-oil sector will gradually drive the recovery in the GCC as production increases, but the oil sector will contribute to growth in 2022.

But vaccine supply is not the only issue — logistics and acceptance of vaccination are equally important. Countries that have diversified their vaccination supply were able to preserve the capacity to vaccinate faster, but streamlining vaccination logistics and processes are equally important. There are certain countries who were able to accelerate the process because they had put a logistical chain in place, such as the UAE and Morocco. The third important aspect is the issue of the public accepting the need for vaccinations. Regulatory frameworks — such as requiring proof of jabs for social activities — can accelerate this process.

A lagging vaccine rollout is a huge risk for economic recovery. The UAE, Saudi Arabia, and Qatar were able to open up the economy given their high rates of vaccination. The IMF provided special drawing rights (SDRs) to move vaccinations forward and we hope that they will be used in several countries where financial issues limited the process. Our analysis shows that if a country accelerates vaccination, it could add additional growth of almost 0.5%.

Rising unemployment and weaknesses in the corporate sector are also risks. Countries who are lagging in terms of vaccines also face the risk of increased unemployment, and increased vulnerability and weaknesses in the corporate sector, which will delay their recovery.

But it all depends on the level of contact, and the digitization of each sector. Sectors where technology is very well entrenched have recovered faster, while sectors more reliant on human contact and informal sectors have lagged behind. The reformation of labor markets, providing better infrastructure for women to work, and investing heavily in technology and the digital climate will aid the recovery process.

The fund has been supportive to Egypt over the last few years. The IMF provided the country with an extensive program in 2016, which was successfully implemented and helped Egypt increase its access to donor funding. During the crisis, we provided the country with USD 8.5 bn, and a one-year stand-by agreement. Recently, we also offered USD 2.8 bn in SDRs.

But the form of coming partnerships depends on the government’s strategies. We are in regular dialogue with the authorities to provide technical assistance and policy support. Now it depends on the strategies that the authorities want to pursue.

COVID WATCH

Another 1.06 mn J&J vaccines landed yesterday

Egypt got its hands on 1.06 mn Johnson & Johnson vaccine doses yesterday, according to a Health Ministry statement. This marks the third shipment of covid-19 vaccine doses to arrive this month, following the arrival of 1.4 mn Pfizer jabs on Friday, and another batch last week. This is also the third batch of J&J vaccines to reach our shores, with the shipment being sent primarily to travel vaccine centers for those needing to travel abroad. We are still expected to receive some 3 mn more doses before the end of the month, in addition to the 2 mn doses per week of Sinovac jabs being produced at Vacsera.

The Health Ministry reported 889 new covid-19 infections yesterday, up from 886 the day before. Egypt has now disclosed a total of 325,508 confirmed cases of covid-19. The ministry also reported 48 new deaths, bringing the country’s total death toll to 18,333.

Kids aged 5-11 could be eligible for covid vaccines in the US as soon as early November, top US infectious disease expert Anthony Fauci told ABC News. FDA analysis of Pfizer trials found the vaccines were “highly effective” in preventing serious illness in elementary school-aged children, with the benefits far outweighing the risks. The regulator is now set to discuss the authorization of the lower-dose pediatric vaccine with Pfizer later today. Reuters also had the story.

TOURISM

Sharm + Hurghada will soon be swarming with Ruskies

More Russian tourists are expected to flock to Hurghada and Sharm El Sheikh starting the first week of November, with tour operators reporting record demand for flight and hotel bookings, according to the Association of Tour Operators of Russia. Russians are expected to flock to the tourist hotspots after Russian President Vladimir Putin announced a long holiday of paid “non-working days” due to the country’s worsening covid-19 situation. Flights to the Red Sea resort towns from Russia are already 75% booked and hotels are nearly at full capacity during the week, even after the Egyptian government lifted covid-19 restrictions on hotels, allowing them to operate at 100% capacity for the first time in 18 months. In March 2020, the government placed a 25% occupancy cap on hotels, which was then eased to 50% starting June 2020, before raising the limit to 70% in July of this year.

The mass return of Russian tourists comes a few months after direct flights from Russia to the Red Sea governorates were reinstated after a six-year-hiatus. Russia has since twice upped the number of flights between Moscow and the two resort towns to reach as many as 25 per week. Charter flights, which are currently suspended as part of Russia’s covid-19 travel restrictions, are also set to resume starting 9 November, which is expected to bring in more tourists due to their affordability.

This is all boding well for Egypt’s recovering tourist demand: Arrivals averaged 400k per month during the first five months of the year, which is nearly 40% of pre-pandemic figures. The recovery is also being buoyed by a host of Tourism Ministry policy decisions, including a promo campaign scheduled for the end of year, and subsidized loans to help tourism companies recover from the brunt of the pandemic.

enterprise

ENTERPRISE+: LAST NIGHT’S TALK SHOWS

Yesterday’s decision by President Abdel Fattah El Sisi to call off the years-long state of emergency was at the focus of last night’s talk shows. Ala Mas’ouleety’s Ahmed Moussa and El Hekaya’s Amr Adib both applauded the decision, which will see the nationwide state of emergency lifted after having been extended in three-month intervals since 2017 (watch, runtime: 3:35 and runtime: 7:13). Al Hayah Al Youm’s Lobna Assal also had coverage (watch, runtime: 4:02). We recap the full story in Politics, above.

Adib spoke to attorney Mohamed Bahaa El Din Abo Shoka on whether the decision will impact people in pre-trial detention and political prisoners (watch, runtime: 2:40). Abo Shoka noted that it will only have implications on those due to be tried in special courts, but who have not yet been prosecuted. In such cases, the defendants will be referred to regular courts.

Developments in Sudan were also on the radar: Adib spoke to Al Arabiya correspondent Lina Yaacoub, who recapped the continued internet cut-off, riots, and calls for civil disobedience from the country’s main opposition group, the FFC. (watch, runtime: 6:15). We have more on the story in What We’re Tracking Today, above.

Also on the airwaves last night: President Abdel Fattah El Sisi’s attendance yesterday of a military graduation ceremony received widespread coverage, with Moussa (watch, runtime: 4:07) and Assal (watch, runtime: 6:48) among those taking note.

ALSO ON OUR RADAR

Egypt seeks funding for Lake Victoria-Mediterranean river link: Egypt and several Nile Basin countries are on the lookout for USD 11.7 mn to fund the second phase of feasibility studies to move ahead with the proposed Lake Victoria-Mediterranean Sea river transport route, Transport Minister Kamel El Wazir said during a roundtable at Cairo Water Week, according to a ministry statement. The project has been placed on a list of priority infrastructure developments for the continent, and will be managed from offices in Egypt and Uganda. The second phase of studies involves looking into the technical, economic and environmental aspects and running costs, with the preliminary studies having been funded by a USD 650k grant from the African Development Bank

Qatari Diar has begun work on the EGP 1 bn first phase of its CityGate development, agreeing with Consolidated Contractors Company to implement the project in a ceremony yesterday, Al Shorouk reports. The New Urban Communities Authority (NUCA) approved the company’s license to continue work on the project earlier this year following a four-year dispute.

PLANET FINANCE

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Things are looking up for EM equities on the MSCI Emerging Market (EM) Index, buoyed by constituent companies reporting better-than-expected earnings, reports Bloomberg. The market is now waiting on results from index heavyweights Samsung Electronics, China Construction Bank, and Sberbank of Russia to come in later this week, potentially extending the index’s three-week rally. The performance of Chinese companies, which make up 31% of the MSCI EM index and have been hard-hit by Chinese regulatory tightening, will also be critical. The MSCI Index has lagged since 2018, with EMs contending with a host of challenges, including regulatory crackdowns in China and possible stagflation. But as economies recover and vaccination rates gain speed, bank, energy and materials earnings are expected to pick up too.

Pandemic-era spending may not be paying off for many EMs: Emerging-market economies that copied rich nations by splurging on pandemic stimulus have not seen this translate into a stronger economic recovery, Morgan Stanley’s chief global strategist, Ruchir Sharma, writes in the Financial Times.

Why? Easy-money policies are more difficult to pull off for EMs. Emerging economies tend to be more exposed to inflationary pressures, currency swings, higher interest rates and fiscal stress, factors that can be exacerbated by overspending. Hence, a year down the line, countries that went big on stimulus — including Hungary, Brazil and the Philippines — have seen more muted growth than thriftier counterparts like Taiwan, South Korea and Mexico, he claims.

Now big spenders are stuck trying to balance the books: “Nations that spend in haste are often forced to repent at leisure,” Sharma writes.

Down

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11178

-0.07% (YTD: +3.07%)

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USD (CBE)

Buy 15.66

Sell 15.76

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Interest rates CBE

8.25% deposit

9.25% lending

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Tadawul

11,889.84

+0.4% (YTD: +36.8%)

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ADX

7,933.87

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FTSE 100

7,222.82

+0.3% (YTD: +11.8%)

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Brent crude

USD 85.73

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Natural gas (Nymex)

USD 5.97

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Gold

USD 1,807.90

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BTC

USD 62,844.40

+3% (as of midnight)

THE CLOSING BELL-

The EGX30 fell less than 0.1% at yesterday’s close on turnover of EGP 1.72 bn (11.6% above the 90-day average). Foreigns investors were net sellers. The index is up 3.1% YTD.

In the green: Cleopatra Hospitals (+5.6%), CIRA (+2.8%) and CIB (+2.1%).

In the red: Aspire Capital (-9.9%), Madinet Nasr Holding (-9.0%) and Gadwa Industrial Development (-7.6%).

DIPLOMACY

Prime Minister Mostafa Madbouly met with representatives of 90 French companies in Paris yesterday at the Movement of the Enterprises of France (MEDEF) to drum up investment. The PM has been in Paris since Sunday to sign an agreement on cooperation between Egypt and the Organisation for Economic Co-operation and Development (OECD).

Also on the investment front: The PM separately sat down with his French counterpart, Jean Castex, to discuss up investment in the fields of automotives and water desalination. Madbouly also met with Orange Middle East CEO Alioune Ndiaye and Crédit Agricole Group Chief Executive Officer Philippe Brassac, while also meeting with representatives of the French University in Egypt, which is due to open its doors soon.

EUR 1.6 mn in financing on the way for Cairo Metro’s sixth line: France is putting together EUR 1.6 mn in financing for technical studies on the planned sixth line of the Cairo Metro, and it expects the financing to be ready by the end of the year, French Economy and Finance Minister Bruno Le Maire told Madbouly in a separate sit-down. The USD 5 bn, 30 km line saw its master contract awarded to US giant Bechtel late last year, but it has lined up funding from Canada, the US, Britain, France and Japan.

Also from PM’s visit: The ITC Ministry and France’s Economy and Finance Ministry signed a declaration of intent to cooperate in using advanced tech and AI to offer government services, as well as explore ways to apply AI to several areas including energy efficiency, managing climate change, water management and irrigation, healthcare, and cultural heritage.

greenEconomy

The hidden environmental cost of going vegan: As climate change becomes a growing concern, people are scrambling to do their part. Many turn to the closest thing they can control — their diet — and go vegan to reduce their carbon footprint. But some vegan products do more harm to the environment than expected, which is why it’s important to perform a thorough background check — specifically the production and transportation process, which could attach a large carbon footprint to the end product. So, how much does a vegan diet actually benefit the planet?

Even though vegan products do emit some greenhouse gases (GHG), beef products contribute the overwhelming majority of food-related GHGs (remember all the hubbub about cows’ burps and farts?), and cause more environmental damage than any other food product. An Oxford University study shows that cutting out meat and dairy products can reduce an individual’s carbon footprint by up to 73%.

The biggest culprits you should avoid? Unfortunately, they’re all delicious: Avocados, almonds, and rice are among the most water intensive plant-based foods produced today. Even high volume crops like bananas and asparagus have an outsized carbon footprint. Growing a single avocado can consume 140-272 liters of water, while one almond needs about 12 liters to grow. Producing rice, which more than half of the world’s population depends on, consumes 2.5k liters of water per 1kg of rice, and releases high levels of methane.

Rice production is especially problematic here in Egypt: Domestic production of rice, which primarily relies on wasteful flood irrigation techniques, measures somewhere near a figure of 4 mn tonnes annually. Most of our crop is geared towards domestic consumption, which, from an environmental standpoint is preferable to sending it out for export, but the problem of water consumption remains a crucial sticking point. The government has eyed developing a less water-intensive rice crop designed to consume some 4k cbm of water per acre compared to the 6k cbm typically needed, but it's unclear how effective that initiative has been.

For most households in Egypt, however, meat consumption is not exactly a major concern: Cereals like rice and wheat constitute the main source of energy in most Egyptian diets, according to the FAO, and regular consumption of animal protein is more heavily concentrated among urban households than in rural areas. In fact, the government is trying to boost animal protein consumption by 4g a day by 2030.

Then there’s the tricky question of meat substitutes: Calculating emissions becomes even more difficult when taking into account meat alternatives from companies like Beyond Meat and Impossible Foods, who make 100% plant-based sausages and burger patties from a large selection of produce. Critics argue that these fast growing companies are not disclosing enough information about their supply chains — making it challenging to track how all their ingredients have been grown and sourced, or tallying their true environmental cost. But studies commissioned by both companies indicate that their food products use significantly less water and land than their animal meat counterparts and emit fewer GHG in the process as well.

The point still remains, less meat = good: All this talk about the nitty-gritty details of veganism’s environmental impact shouldn’t obscure the reality that animal products contribute the most GHG out of all the food groups. Environmental Working Group figures showed that nine out of the top 10 CO2 emitters were animal products, with lamb and beef claiming the top two spots. Producing one kilo of lamb emits an estimated 39.2 kilos of CO2 — equivalent to driving some 146 km. Cutting out meat and dairy products from your diet is still the single largest contribution you can make to reduce your environmental impact on an individual level.

Less meat consumption remains key to cutting emissions: If everyone in the world went vegan, food-related emissions would drop by 70% by 2050 according to a recent report. Even halving global meat consumption could reduce emissions by 20-30% per person, some studies suggest. A separate 2020 study suggests that food-based carbon emissions can be reduced without everyone going vegan. Bringing daily caloric intake to some 2.1k calories per day, increasing farm yields, reducing food waste and transitioning to a mostly plant-based diet — along with changes to our fossil fuel emissions — might be able to avoid 0.3 – 0.7°C of warming.

A few general rules to help minimize your emission footprint: Your first order of business should be primarily purchasing locally-grown, in-season produce. This would cut down significantly on emissions from shipping and preserving produce over long distances, as well as the water- and energy-intensive process of growing out-of-season foods in climate-controlled greenhouses.

Also try to avoid products with artificial fertilizers, which account for c.3% of global GHG emissions and release nitrogen into the soil. Nitrogen is then turned into damaging nitrous oxide that is released into the atmosphere that has “a global warming potential 300 times larger” than CO2, according to the International Atomic Energy Agency.

If you have to go with something imported, consider where exactly it is imported from: There’s a considerable difference between buying chocolate made from cocoa beans harvested on deforested land in South America and locally sourced beef from your neighborhood butcher for example. But broadly speaking, even plant-based proteins grown on razed down forests are more sustainable than “low-impact,” locally sourced animal proteins.

But It requires more than just individual action: Making sure our food system is sustainable needs to be part of a larger public policy initiative to achieve any substantive ecological impact. One such initiative is the government’s reclamation of 4 mn acres of agricultural land across the country, as part of a wider medium-term USD 454 mn joint project (pdf) with the World Food Program to strengthen Egypt’s capacities to implement its SDGs. The Agriculture Ministry, alongside the UN-backed program, will introduce improved agricultural processes like heat tolerant crop varieties, improved irrigation methods, as well as affordable harvesting and post-harvest technologies that should theoretically reduce GHG emissions and water consumption.


Your top climate stories for the week:

  • Glasgow will host the high-profile COP 26 global climate summit next week. The summit brings together the countries that signed the United Nations Framework Convention on Climate Change. Earlier this month Egypt was chosen to host next year’s COP27 summit. The summit’s coming session, COP 27 will be hosted by Egypt.
  • Climate conscious investors could be becoming slightly less climate conscious: The 54% rally in S&P 500 energy stocks is testing climate-conscious fund managers’ commitment to green investments.
  • We could be seeing a lot more EU money earmarked for climate projects over the next six years: Egypt could receive up to EUR 1 bn from the EU by 2027 for climate and sustainability projects, EU Commissioner for Neighborhood Oliver Varhelyi said during Cairo Water Week.
  • Desalination nation: Egypt’s sovereign wealth fund has issued tenders for private companies to build 17 solar-powered desalination plants, part of a USD 2.5 bn plan to quadruple our desalination capacity in the next five years.

CALENDAR

Mid-October: The Egyptian Banking Institute, the Financial Services Institute, and I-Score will begin airing in mid-October the Digital Credit Scoring Webinar Series, a line-up of webinars on the banking sector and banking regulations.

23-28 October (Saturday-Thursday): A high-level delegation of the UN’s International Fund for Agricultural Development (IFAD) will visit Egypt to meet with government officials and travel to IFAD-supported projects in the country.

24-28 October (Sunday-Thursday): Cairo Water Week, Cairo, Egypt.

26 October (Tuesday): EIB seminar (pdf) on water project financing in Egypt. Nile Ritz Carlton, Cairo.

27-28 October (Wednesday-Thursday): Intelligent Cities Exhibition & Conference, Royal Maxim Palace Kempinski, Cairo, Egypt.

27 October (Wednesday): World Cloud Show.

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

28 October (Thursday): Second tranche of overdue subsidy payouts will be handed to eligible exporters.

30 October – 4 November (Saturday-Thursday): The first edition of Race The Legends, Egypt.

30-31 October (Saturday-Sunday): G20 Leaders’ Summit, Rome, Italy.

31 October (Saturday): World Cities Day, Luxor, Egypt.

November: The French-Egyptian Business Forum is set to take place in the Suez Canal Economic Zone.

November: Egypt will host another round of talks to reach a potential Egyptian-Eurasian trade agreement, which can significantly contribute to increasing the volume of Egyptian exports to the Russia-led bloc that includes Armenia, Belarus, Kazakhstan and Kyrgyzstan.

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.

2-3 November (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

6 November (Saturday): Deadline to apply to Nahdet El Mahrousa’s Rabeha, a women entrepreneurship accelerator program.

7-10 November (Sunday-Wednesday): Cairo ICT 2021, Egypt International Exhibition Center, New Cairo.

8 November (Monday): Egypt CSR Forum, International Citystars, Cairo.

15-21 November (Monday-Sunday): Intra-African Trade Fair 2021, Durban, KwaZulu-Natal, South Africa.

16-17 November (Tuesday-Wednesday): Africa fintech summit, Cairo.

18-19 November (Thursday-Friday) British royal family members Prince Charles and the Duchess of Cornwall visit Cairo.

25-27 November (Thursday-Saturday): RiseUp Summit, Cairo, Egypt.

26 November-5 December (Friday-Sunday): The 43rd Cairo International Film Festival.

29 November-2 December (Monday-Thursday): Egypt Defense Expo, Egypt International Exhibition Centre.

7-8 December (Tuesday-Wednesday): North Africa Trade Finance Summit.

8-10 December (Wednesday-Thursday): Global Forum for Higher Education and Scientific Research (GFHS), Cairo, Egypt.

12-14 December (Sunday-Tuesday): Food Africa Cairo trade exhibition, Egypt International Exhibition Center, Cairo, Egypt.

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

14-19 December (Tuesday-Sunday): The Cairo International Festival for Experimental Theater.

14-15 December (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

15 December (Wednesday): Deadline for joint stock companies and investment companies in Cairo to join e-invoicing platform.

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

1Q2022: Launch of the Egyptian Commodities Exchange.

7 January 2022 (Friday): Coptic Christmas.

27 January 2022 (Tuesday): National holiday in observance of 25 January revolution anniversary / Police Day.

14-16 February 2022 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

19 February 2022 (Saturday): Public universities begin the second term of the 2021-2022 academic year.

1H2022: The World Economic Forum annual meeting, location TBD.

2 April 2022 (Saturday): First day of Ramadan (TBC).

22-24 April 2022 (Friday-Sunday): World Bank-IMF spring meeting, Washington D.C.

24 April 2022 (Sunday): Coptic Easter Sunday (holiday for Coptic Christians).

25 April 2022 (Monday): Sham El Nessim.

25 April 2022 (Monday): Sinai Liberation Day.

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

2 May 2022 (Monday): Eid El Fitr (TBC).

16 June 2022 (Thursday): End of 2021-2022 academic year for public schools.

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

30 June 2022 (Thursday): June 30 Revolution Day, national holiday.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

30 July (Saturday): Islamic New Year.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday.

18-20 October 2022 (Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

**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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