Sunday, 19 December 2021

AM — CBE leaves rates on hold.
Plus: Take our annual reader poll.



Good morning, friends. Want to have breakfast with us in 2022? Go take our annual Enterprise Reader Poll. It won’t take more than a couple of minutes of your time. We’ll be inviting eight readers who take the poll to have breakfast with us early in the new year (covid restrictions permitting and all that), and another dozen of you will get spiffy Enterprise mugs to help you mainline your morning java.

And with that, let’s get this second-to-last week of 2021 on the road.


PSA #1- Property owners have until Friday, 31 December to pay the second installment of their annual real estate taxes without incurring a late fee, Tax Authority boss Anwar Fawzy said in a statement yesterday. The first installment was due between 1 January and 30 June. Homeowners whose primary residence is valued at less than EGP 2 mn are exempt from paying the tax, Fawzy noted.

PSA #2- Sandstorms + rainfall to hit most parts of Egypt: Parts of Greater Cairo, northern Upper Egypt, the Suez Canal region, and the Delta are going to be hit by gusting winds today and tomorrow that could develop into sandstorms, the national weather service predicts. Look for the mercury to plunge in tandem. Showers could begin later tonight and continue Monday and into Tuesday, the Egyptian Meteorological Authority’s Iman Shaker told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 5:06).

Our favourite weather app concurs and is calling for rain starting tonight in the capital city. Look for the mercury to peak at 18°C today and 15°C tomorrow.

School’s out in four governorates: Alexandria, Matrouh, Kafr El Sheikh and Beheira have suspended classes for public and private schools in the expectation of “moderate to heavy” rains, as well as bouts of dust storms. Matrouh and Beheira suspended classes today, while Alexandria went ahead and canceled classes for today and tomorrow, Alexandria Governor Mohamed El Sherif told El Hekaya’s Amr Adib (watch, runtime: 8:07).

A potential overhaul of Alexandria’s drainage system? El Sherif is scheduled to meet Housing Minister Assem El Gazzar and Local Development Minister Mahmoud Shaarawi in a couple of days to discuss a plan to develop and reform Alexandria’s drainage system in several phases, he told Adib. A similar proposal was made by Alexandria University back in 2016 to build a new drainage network to collect, store, and recycle rainwater, but no steps have been taken since then.

THE BIG STORY ABROAD- It’s feeling kind of apocalyptic out there this morning — in a covid-19 way as the Omicron variant spreads globally. The bug, which landed in Egypt this weekend, has led the Netherlands to order bars, restaurants, cinemas, gyms and many shops to close until mid-January (Financial Times | CNBC). The Dutch are the first in the EU to go to that length this time ‘round. Offices are canceling holiday parties (New York Times | Wall Street Journal | Axios). US President Joe Biden is going to issue a “stark warning” on vaccinations (Bloomberg), while Fortune notes that Omicron has “blindsided” the world and Canada is starting to reimpose restrictions (Globe & Mail).

The TRY hit fresh lows (again) on Friday, closing at 16.41 to the USD, after plunging to record 15.65 to the USD immediately following the Turkish central bank’s announcement that it would cut interest rates for the fourth consecutive month. The TRY’s downward spiral, which has seen it shed half its value since the start of the year, caused trading to be temporarily suspended on the Istanbul bourse on Friday after its main index crashed 5%, the Financial Times reports.

Annual inflation now stands at 21% in Turkey, leading President Recep Tayyip Erdogan to announce a 50% hike in the minimum wage in an attempt to cushion the blow to workers (and his poll ratings). Erdogan has repeatedly refused to raise rates, the result of his theory that high borrowing costs stoke inflation — a belief that the Wall Street Journal succinctly describes as “the opposite of what economies around the world have experienced through history.”

IN MEMORIAM- Emirati b’naire Majid Al Futtaim passed away on Friday. Al Futtaim, who was in his 80s, is the founder of his namesake conglomerate Majid Al Futtaim Group and is known for overseeing the development of Dubai from the 1960s. The National was out with an obituary.

Egypt walked away from the Arab Cup in fourth place after losing 5-4 following a penalty shoot-out in its consolation game against Qatar.

Algeria took home the trophy for the first time in its history after beating Tunisia 2-0, with two strikes in overtime sealing the historic victory.


Investing might never be the same, or so says Bloomberg, which takes us on a journey of the wild and wonderful changes that 2021 — a year that catapulted NFTs to the spotlight and made crypto trendy rather than just the domain of underworldly internet geeks — has brought to investing. Kicking off with meme-stock traders plying the Internet for the next big thing — which in early 2021 was Gamestop — to the birth of new virtual communities during lockdown and a growing fascination with crypto and NFTs, the column looks at all the ways that managing your monies has changed this year. And that’s not to say that investing the old-fashioned way hasn’t been profitable: The S&P 500 index fund grew by 25% this year. In the meantime, crypto exchanges like Coinbase have more than doubled their user base in just under two years.

Not sure what an NFT is? We’ve got your back.


Swvl and Magalix are holding a virtual fireside chat titled Stories of Women in the Tech Field on Tuesday 21 December, at 7pm. Connect to the event here.

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


*** It’s What’s Next day: We have our weekly deep-dive into what makes and shapes pre-listed companies and startups in Egypt, the UAE and KSA, touching on investment trends, future sector insights and growth journeys.

In today’s issue: How two family businesses transformed themselves into publicly-traded institutions. In the past two weeks, we looked at how Egyptian family businesses fared in the covid era — and what they need to do to be ready for the challenges ahead. Now, it’s time we hear from people who’ve actually taken the leap. Today, we speak to the leaders of IDH and CIRA about the lessons they’ve learned as they’ve transitioned from family-run operations to leading players in their respective markets.


Celebrate Christmas weekend with festive vibes and celebrations amongst family & friends. Choose from an array of versatile and exciting hotel options: The Cascades, Sheraton, Kempinski, Robinson and The Breakers.


CBE leaves rates on hold in final meeting of 2021

The Central Bank of Egypt (CBE) left interest rates on hold for the ninth consecutive meeting on Thursday as policymakers weighed the possibility of sooner-than-expected US rate hikes in 2022 and the economic impact of the Omicron variant of the virus that causes covid-19. The central bank left the overnight deposit rate at 8.25% and the lending rate at 9.25%, while the main operation and discount rates are still at 8.75%, it said in a statement (pdf) following the meeting.

This lines up with what we were told last week: All 11 economists and analysts we surveyed in our regular interest rate poll predicted the CBE would leave rates unchanged due to uncertainty generated by Omicron and the possibility of global rates. Lower-than-expected November inflation figures would also give the bank space to hold off any changes, poll respondents said.

What the Monetary Policy Committee said: The bank attributed the hold to a slow-down in global economic activity thanks in large part to supply chain disruptions, explaining that global recovery still depends on covid vaccine efficiency and countries’ ability to limit the spread of the virus.

The decision means that Egypt holds onto its status as having one of the highest real interest rates in the world, maintaining the attractiveness of the EGP carry trade for foreign investors. “We believe Egyptian treasuries will remain attractive, underpinned by EGP stability and maintained real interest rates,” Beltone Financial’s head of macro Alia Mamdouh wrote in a note following the meeting. “Among emerging markets with comparable yields, Egypt still stands out with a relatively less impacted economy from the repercussions of the covid-19 pandemic as it provides growth potential.”

Inflation has slowed in recent months, raising real rates: Annual urban inflation slowed for the second month running in November and dipped to its lowest since July as pressure on food prices continued to ease. The CBE said that its current policy will see prices stabilize in the medium term, and is consistent with achieving its inflation target of 7% (+/-2%) by 4Q2022.

But expect it to trend upwards over the next several months: Naeem Brokerage is forecasting inflation to rise to 6-7% during the first quarter of next year as recent increases in food and energy commodities filter through to consumer prices and the favorable base effect that has brought down figures over the past two months goes into reverse. HC Securities expects consumer prices to rise further due to persistent global inflation, the possibility of easing subsidies on basic food items, potential electricity price increases, and a rise in demand following higher employment rates, Monette Doss, chief economist at the firm, told us.

Analysts disagree on what happens next: Capital Economics is expecting inflation to fall back below the central bank’s target range by the middle of the year. HC Securities doesn’t see the trend being so short-lived, and expects inflation to average 8% through to the end of 2022.

The high rate-low inflation combo will be increasingly important as we head into what is expected to be a rocky 2022 for the EM-verse: A hard hawkish turn by the Federal Reserve a day before the CBE meeting saw the US central bank signal that it could hike rates at least three times next year to combat soaring inflation. The Fed will also double the pace at which it’s tapering covid stimulus, which will now see it stop purchasing treasuries and mortgage bonds completely by the end of the first quarter.

This is going to cause serious problems for some emerging markets, particularly those with high debt obligations, a lack of market access, and their own inflationary struggles, Harvard economist Kenneth Rogoff told Bloomberg last week. Emerging markets are “very sensitive to the hiking-more-quickly scenario,” he said, warning that just a one percentage-point increase next year could shut countries out of the debt markets, name-checking Egypt along with Pakistan and Ghana. The risks of rising rates were articulated by Fitch last week, which said that tighter credit conditions are a “key risk” for Egypt due to its dependence on external financing.

Decisions made in Washington may prompt the CBE to reverse course on its easing cycle: “The low-rate environment that dominated the world in the past decade is coming to an end,” EFG Hermes’ head of macro research Mohamed Abu Basha told Enterprise. The central bank will likely leave rates on hold through to the middle of 2022, but “if they do change, it’s going to be upwards,” he said.

This would be carry trade-positive: “Rates are projected to remain on hold with the risks skewed in favor of rate hikes as the Federal Reserve pushes ahead with its policy tightening,” analysts at emerging-market research firm Tellimer wrote on Friday. “This suggests that Egypt is likely to maintain one of the highest real interest rates in the world in 2022, which should continue to underpin demand for Egyptian bonds.”

Others aren’t quite ready to pronounce the end of the easing cycle: Capital Economics still thinks there is a “good chance” of a one-off 50 bps cut should inflation moderate by the middle of the year, while Goldman Sachs economist Farouk Soussa told Bloomberg that lower inflation over the medium-term would allow the central bank to resume easing.


Omicron lands in Egypt

Three Omicron cases were detected over the weekend, marking the variant’s first appearance in the country, according to the Health Ministry. The three cases were detected in people arriving from countries where the variant is already circulating, the statement reads. Two of the three cases are asymptomatic, while the third patient has shown only mild symptoms. All three are currently in isolation under medical supervision, while no further cases have been discovered among people they had come into contact with, the ministry said.

Don’t be surprised: Authorities (and basic science) previously said that it was only a matter of time until the variant made an appearance in Egypt. WHO chief Tedros Adhanom Ghebreyesus last week said Omicron had been reported in 77 countries and had probably already spread undetected to most other nations. The Health Ministry is encouraging citizens to continue to adhere to precautionary measures including mask-wearing and social distancing, and to get vaccinated if they haven’t already done so.

Good thing booster shots are rolling out: The Health Ministry began sending out text messages as of Friday to those eligible for booster shots, notifying them that they’re qualified, without requiring them to register, ministry spokesperson Hossam Abdel Ghaffar told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 2:57). Eligible people — currently only medical staff and senior citizens with chronic medical conditions who completed their regular vaccine dose at least six months ago — will be contacted from the ministry’s current directory of people who signed up for the vaccine. Masaa DMC’s Injy Al Qadi (watch, runtime: 8:17) and Al Hayah Al Youm’s Lobna Assal also had similar coverage (watch, runtime: 24:47).

Everybody above the age of 70 should immediately receive a booster shot to help guard against Omicron, regardless of how long it’s been since they got their first round of jabs or what their health condition is, Ashraf El Fiky, a medical officer at Washington-based clinical research organization Emmes, told Lamees (watch, runtime: 11:27).

A total of 53 mn jabs have been administered in Egypt to date, according to Abdel Ghaffar. Around 30% of those who have been vaccinated have received the full dosage of their jabs, the spokesperson told Lamees. University students are also around 95% vaccinated, he said (watch, runtime: 7:36).

We received 200k AstraZeneca vaccine doses from Hungary on Friday, pushing the total number of AstraZeneca jabs we’ve received from Hungary to 450k, the foreign ministry said in a statement.

The Health Ministry reported 902 new covid-19 infections yesterday, down from 910 the day before. Egypt has now disclosed a total of 374,411 confirmed cases of covid-19. The ministry also reported 38 new deaths, bringing the country’s total death toll to 21,315.

Egypt wasn’t the only country to report its first cases of Omicron over the weekend: Qatar’s Health Ministry picked up its first four cases.

Already had covid, or even two jabs? It might not help protect you from Omicron: Risk of reinfection with the Omicron variant is 5.4 times greater than with the Delta variant, according to a new report from Imperial College London’s covid response team.

The weekend brought record covid case numbers for a number of countries/states:

PSA #1- Canada has dropped a widely criticized ban on direct travel from Egypt and nine other African countries and has imposed a covid-19 test requirements for people arriving from all destinations, the Globe and Mail reports.

PSA #2- All travelers to Greece now need to show on entry either a negative PCR test taken no more than 72 hours prior to arrival, or a rapid antigen test taken within 24 hours of arrival, national flag carrier EgyptAir said in a statement. The temporary measure applies for the holiday season, Reuters reported citing a government spokesperson, and follows similar restrictions announced by Italy last week amid the spread of Omicron.


Sawiris family exits struggling Euronews

The Sawiris family is selling its majority stake in Euronews to investment firm Alpac Capital, the loss-making broadcaster said in a statement on Friday. The Portuguese firm has signed a binding offer to buy an 88% stake in Euronews owned by the Sawiris family’s Media Globe Networks (MGN) for an undisclosed amount.

The transaction is set to be finalized during 1Q2022. The remaining 12% stake in Euronews will continue to be held by a consortium of public broadcasters and local authorities that includes France Televisions, Italy's RAI and Abu Dhabi Media Investment Company (ADMIC), though that could change as Euronews looks to tap new capital, Reuters reported, citing Euronews chief exec Michael Peters.

The company’s structure will undergo a revamp: The acquisition will see the broadcaster replace its supervisory board, currently chaired by Naguib Sawiris, with a board of directors headed by Peters. Sawiris in November announced his intention to divest from the struggling broadcaster, which the family first took control of in 2015.

Euronews is trying to claw back pandemic-era losses: The company’s total sales dropped by 23% y-o-y to EUR 58 mn in 2020, leading to losses of EUR 16 mn, Peters told Reuters. Revenue diversification should see those losses narrow by half in 2022, he said, while the company is aiming to break even in 2023, according to the statement.


Filkhedma acquired by SA’s SweepSouth in multi-mn USD all-stock transaction

Filkhedma is under new management: South African home services firm SweepSouth has acquired 100% of Cairo-based startup Filkhedma, the companies said in a joint statement (pdf). The transaction will see the company’s existing shareholders — which include Algebra Ventures, Glint Consulting and angel investor Khaled Ismail — take shares in SweepSouth, Filkhedma founder and CEO Omar Ramadan told Enterprise. Ramadan declined to disclose the terms of the agreement but told us the shares obtained by Filkhedma shareholders are worth “a few mn USD.”

The new owners: Launched in 2014, SweepSouth is Africa’s largest home services platform. It operates in South Africa, Nigeria and Kenya, according to the statement. It will now have a presence in three Egyptian cities through Filkhedma, which has more than 2k cleaning, maintenance and beauty services providers on its network.

Expect a squeakier clean from Filkhedma: The acquisition will see Filkhedma benefit from SweepSouth’s experience to upgrade its home cleaning services, Ramadan told us, noting that home cleaning is the largest vertical in the home services sector across Africa. An outdoor cleaning and gardening service, already available in SweepSouth’s existing South African, Kenyan and Nigerian markets, is also in the works, while Filkhedma will also see software updates on the back of the acquisition.

And a wider range of services in SA: SweepSouth, meanwhile, will be adding Filkhedma’s home beauty services and a wider range of maintenance options to its South African offering at some point in January, Ramadan told us. The South African company expects the acquisition to almost double the company’s potential market on the continent.

The takeover announcement comes just a few days after the company secured a new round of investment from the Cairo Angels, which Ramadan tells us was part of a larger bridge round meant to ensure that the company was well-capitalized and continued to grow as the acquisition was being negotiated. The round was the startup’s fourth, with earlier rounds raised from Algebra Ventures, Glint, and Ismail’s KiAngel.

An “aggressive” expansion plan set to start in March 2022 will see the company add three new markets next year, two on the African continent and one beyond Africa and the Middle East, Ramadan said. The company is also planning a marketing campaign set to launch in the first quarter of 2022 with the aim of growing Egypt-based business by 5-10x over the course of the next year, he said.

Management is restructuring: Following a three-month transition period, Ramadan (LinkedIn) will become the chief business officer for the combined entity, working across the company’s markets. The wider Filkhedma managing team will also see a shake-up, with staff taking on new roles both locally and regionally.

Exits: the future of our startup scene? As new funding pours into our local startups, startup-to-startup acquisitions are likely to become more common, local players told us last month. Filkhedma joins the handful of homegrown names to be acquired by international players, including Egyptian matchmaking app Hawaya (formerly known as Harmonica), which was acquired by Tinder parent company Match Group, and food-ordering platform Otlob, which Delivery Hero bought and later rebranded as Talabat.

WHAT’S NEXT- Enterprise expects more M&A from Planet Startup as we enter next year, especially in logistics, last-mile delivery, fintech, healthtech and edtech.


You can now buy tickets to visit the pyramids online

e-Finance’s e-commerce and tourism platform e-Aswaaq has set up the online portals to buy entry tickets for the Giza Pyramids, as well as several electronic gates at the entrance of the plateau, according to a statement picked up by Al Borsa. This comes almost three months after e-Aswaaq kicked off the rollout of its booking and ticketing portal at the Egyptian Museum in Tahrir, which was followed by the National Museum of Civilization, Hurghada Museum and Sharm El Sheikh Museum. The company is looking to finish upgrading ticketing systems and complete the rollout of the portal for 30 archeological sites by the end of 2022, according to the statement.

Egypt’s tourism recovery has largely shrugged off Omicron, with travel to tourism hotspots remaining unaffected by recently introduced travel restrictions, Al Borsa reports, citing unnamed government sources. Average occupancy rate at hotels across the Red Sea — in Sharm El Sheikh and Hurghada — are expected to reach 70-75% by the end of 2021, while Sinai hotels could end the year with an average occupancy rate of 55-60%, the sources said. Tourism has been slowly recovering from the 2020 setback due to covid-19 lockdowns and restrictions for the past year, aided by the loosening of restrictions allowing hotels to operate at full capacity and the return of direct flights from Russia to Sharm El Sheikh and Hurghada.



Omicron’s crash-landing in Egypt over the weekend was at the top of the talking heads’ agendas last night. We have chapter and verse in this morning’s Covid Watch, above.

In a close second place: Commentary on our fourth place finish at the Arab Cup. Pretty much everyone had something to say, from Kelma Akhira’s Lamees El Hadidi (watch, runtime: 1:32) to Al Hayah Al Youm’s Lobna Assal (watch, runtime: 8:57) and, of course, football aficionado El Hekaya’s Amr Adib (watch, runtime: 4:20).

What kind of news day would it be for Egypt if human rights didn’t factor in, one way or another? A statement from Germany’s government ahead of tomorrow’s hearing for lawyer Mohamed El Baqer and rights activist Alaa Abdel Fattah earned a quick response from Egypt’s Foreign Ministry condemning the attempted interference in the judicial process, El Hekaya’s Amr Adib noted (watch, runtime: 3:20).

Also getting airtime: How several days of school closures due to bad weather will affect students’ learning and exam schedules, with Kelma Akhira’s Lamees El Hadidi saying the closures are now becoming excessive at students’ expense (watch, runtime: 1:08). We also have the full rundown on the story in What We’re Tracking Today, above.


Human rights again plays heavily in the conversation on Egypt in the international press this morning. Laila Soueif, the mother of jailed activist Alaa Abd El Fattah, calls for his release in an opinion piece for the New York Times ahead of Abd El Fattah’s scheduled sentencing on Monday. Meanwhile, AP, Reuters, Bloomberg and Haaretz are picking up a Citizen Lab report on spyware targeting a politician and a talk show host, both of them in exile. And the Committee to Protect Journalists’ annual report is getting more ink from the Grey Lady’s op-ed pages.

MEANWHILE- Egypt and Turkey are vying for a stronger foothold in the Horn of Africa, with Egypt amplifying efforts to increase military and trade cooperation with Kenya following regional rival Turkey’s moves to improve relations with the African country (Al Monitor). And former Chancellor Angela Merkel’s government approved a number of arms sales to Egypt before leaving office (DW).


Natural gas exports hit 4.6 bn cubic meters in FY2020-2021, up 142% y-o-y, according to Capmas figures (pdf). Egypt became a net exporter of natural gas and LNG in 2018 after the discovery of the supergiant Zohr gas field — the Mediterranean’s largest — allowed us to pull the plug on imports.

Almost 1.7k companies have applied to join the fourth phase of FinMin’s export subsidy arrears payment program, the Finance Ministry said in a statement. The ministry opened the door for ceramic, automobile and pharma exporters to join the program’s fourth phase, the application deadline for which was at the end of November, according to the statement. The program allows exporters to receive overdue subsidies in a single payment, rather than in installments over four to five years, in return for a 15% haircut. As of last month, some 2.5k exporters had received a combined EGP 30 bn in overdue subsidies since the program launched in November last year.

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

  • Foods produced in freezones for import or export will now have to pass inspection by the Egyptian Food Safety Authority.
  • Egyptian company trademarks registered with the Internal Trade Development Authority’s database can now be found on the European Union’s Intellectual Property Office’s online database, Al Borsa reported.


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Scrap the “transitory” talk: Inflation is now “persistent,” according to the world’s most influential central banks, who cemented their hawkish turn in last week’s final policy meetings of the year, the Financial Times reports. The US Federal Reserve and European Central Bank slashed covid-era asset purchases at their respective meetings, while the Bank of England and Norway’s central bank raised interest rates, as did nine emerging market economies. Worries over inflation are driving these moves, though some economists told the salmon-coloured paper that officials may have underestimated the threat Omicron represents to developed economies amid their quick pivot to tighten policy.

Volatility in the stock markets stepped up a notch following the Fed’s announcement, with the S&P 500 falling 1% and the Dow Jones slipping 1.5% on Friday, Bloomberg reports, as a rising USD and flattening yield curve on treasuries had investors fretting about the impact of higher borrowing costs on the economy. That could mean an end to 2021’s long bull run on equities, particularly for high-value tech stocks (your Apples, Teslas and Amazons), the outlet reports — though innovation-stock guru Cathie Wood insisted that such stocks are not in a bubble, but rather in “deep value territory,” meaning they still hold long-term growth potential despite current volatility.

One country that could go against the trend is China, where JPMorgan analyst Marko Kolanovic expects stocks to rise almost 40% in 2022, according to Bloomberg. He’s not alone: Analysts at Goldman, UBS, HSBC and BlackRock are all expecting policymakers to intervene and support the economy next year following this year’s regulatory clampdowns that have depressed valuations of Chinese assets. Morgan Stanley strategists beg to differ, saying that many of the factors that crushed China’s financial markets this year — including the crisis in the property sector, deteriorating relations with the US, and overbearing regulation — will continue to weigh on markets.




+0.4% (YTD: +7.6%)



Buy 15.66

Sell 15.76



Buy 15.66

Sell 15.76


Interest rates CBE

8.25% deposit

9.25% lending




+1.5% (YTD: +30.2%)




+0.4% (YTD: +75.5%)




+0.6% (YTD: +31.4%)


S&P 500


-1.0% (YTD: +23.0%)


FTSE 100


+0.1% (YTD: +12.5%)


Brent crude

USD 70.86



Natural gas (Nymex)

USD 3.69




USD 1,804.90




USD 46,713.56



The EGX30 rose 0.4% at Thursday’s close on turnover of EGP 1.41 bn (2% above the 90-day average). Foreign investors were net sellers. The index is up 7.6% YTD.

In the green: Palm Hills Development (+7.2%), Rameda (+5.1%) and Heliopolis Housing (+4.8%).

In the red: CIB (-1.5%), CIRA (-1.0%) and Ezz Steel (-0.7%).


International Atomic Energy Agency Director General Rafael Mariano Grossi was in town over the weekend, holding talks with President Abdel Fattah El Sisi and Foreign Minister Sameh Shoukry about the use of nuclear energy to lower carbon emissions (IAEA | Ittihadiya | Foreign Ministry).


IDH and CIRA: How two family businesses transformed themselves into publicly-traded institutions: In the past two weeks, we looked at how Egyptian family businesses fared in the covid era — and what they need to do to be ready for the challenges ahead. Now, it’s time we hear from people who’ve actually taken the leap. Today, we speak to the leaders of two top Egyptian companies about the lessons they’ve learned as they’ve transitioned from family-run operations to leading players in their respective markets.

Hend El Sherbini is CEO of Integrated Diagnostics Holdings (IDH), a London- and EGX-listed consumer healthcare business that is the leading provider of diagnostic services in Egypt, Jordan, Sudan, and Nigeria. It’s best known in Egypt for its Al Borg and Al Mokhtabar brands, the two largest players in the market.

Mohamed El Kalla is CEO of CIRA, the EGX-listed K-12 and post-second education platform known for brands including Mavericks, Futures and BCCIS that serve lower-middle through high-income segments and teach from Canadian, British, US and Egyptian national curricula. It also owns and operates the Badr University brand.

Enterprise: Give us a bit of background about when and how your company was founded.

El Sherbini: The business was started by my mother in 1979 as a one-doctor lab — which was normal then. Over time, she added more doctors and specialties to the lab. I started working with her in 2001.

El Kalla: The Kalla family, along with close friends and colleagues, decided to start a venture to provide education to the middle class. When the founding family members reached their 50s, they started to look at bringing the second generation on board.

E: Why did you choose to corporatize?

El Sherbini: When I joined, I thought we had to open more branches and add more specialties. If you want to grow while maintaining your standards, you need the structure that corporatizing brings. We became a company, called Al Mokhtabar, in 2004. That’s when we built a back office, and created positions including a chief financial officer and a human resources department.

El Kalla: Corporatizing is essential, especially in Egypt. Look back as far as the 1930s, and you see rising family businesses that crumbled because they couldn’t create an institutional structure and then a weak generation took over. Without an institutional structure, you risk relying on a family that could have diversified interests, weak capabilities or be too immersed in luxury to take care of the business. If you want institutional investors or foreign funds, you have to address this. Why should they work with you if you’re going to disappear at some point? The Rockefellers and the Fords built conglomerates because they had an institutional structure.

E: How did you convince the family to take the leap?

El Sherbini: You’re trying to change the mindset of a family business — which is more or less a one-man show — and turn it into a business with accountability, functions, managers, and governance. Even the doctors that worked with us used to do things at their own pace. Having the patient at the center of the business, and everyone else revolve around them, became essential.

El Kalla: I was lucky because most of our circle consisted of visionary people who worked with international institutions, so they weren’t very opposed to the idea. Fortunately, we had the first generation on board, so the second generation automatically followed. If we’d started corporatizing in the second generation, it would have been much tougher. Because our founders were tightly knit, they decided to bring in an international entity to help hold potentially sensitive discussions about growing old and attracting future generations to the business. The International Finance Corporation was invited by the board, and they helped a lot with the transition stage.

E: How has your company benefited from corporatization?

El Sherbini: Simply put, you can’t expand, serve more people, or keep adding value without being corporatized. Corporatization allowed us to introduce new tech to serve more patients, and to attract investors with sound financials and structure.

El Kalla: If you look at CIRA’s institutional structure, you’ll see that of our 30 senior management roles, only four are filled by family. Outside the family, 70% of our investors are global institutions. These investors will only work with well-governed institutions, with rigorous systems and accountability.

E: How did you choose your board of directors?

El Sherbini: We wanted members with good business knowledge in the regions we work in, experience in the medical sector, and financial expertise. Most are non-executive, independent directors, which is also a requirement of the London Stock Exchange (LSE).

El Kalla: We looked for public figures with a very strong track record of ethics and accountability. Industry and business expertise were also important considerations. Our board is set up to ensure that if all independent members, 50% of our board seats currently, vote against a decision, the family members will be blocked. And our audit committee is completely made up of independent members.

E: How was the corporatization on the more operational front?

El Sherbini: Strong accreditation has helped sustain our quality amidst expansion. We were the first healthcare entity in Egypt to be accredited. We got ISO accreditation in 1998, then sought more lab-specialized accreditation from the College of American Pathologists. To this day, we’re the only lab in Egypt accredited from there. We turned functional roles into departments, creating a financial department, a sales and marketing department and a call center.

El Kalla: The process included setting codes of ethics and performance systems and ensuring everyone adheres to them. We also identified who out of the second generation would run the business, and created our own accountability system, family governance code and Swan System.

E: How did your employees react to the change of pace and structure?

El Sherbini: Our new structure helps us support our employees to provide a better service. The doctors that worked with us used to work at their own pace, but putting the patient at the center of the business — with everything else revolving around them — is essential. Our 5k employees benefit from a profitsharing plan, healthcare and ins. — which we couldn’t offer as a family business.

E: Does corporatization make the company more attractive to future generations?

El Kalla: Today, CIRA is an industry brand, and younger family members are interested in joining it. The more your corporation has a strong story and global presence, the more attractive it is. And when you work with global investors to expand your business, you create a structure that inspires investor confidence. These investors open doors everywhere, so you end up with a virtuous cycle of growth.

E: Which downsides did you have to endure?

El Kalla: There are more expenses when you institutionalize. You pay lawyers and advisors to create systems, there’s board remuneration for independent members, and you have the cost of registering all contracts and agreements. All this means more investment and accountability, but ultimately it brings a better yield. The speed of company operations is also affected because corporatizing requires more approvals and processes. But these things also mitigate risk. Finally, if you publicly list, you have to comply with public regulations — a complicated process requiring auditors, expertise and additional costs.

Your top stories on future trends for the week:

  • The European Bank for Reconstruction and Development approved a USD 15 mn equity commitment to Algebra Ventures’ second tech fund, which is targeting a USD 60 mn first close.
  • AIM Technologies closes Sequence Ventures-led seed round: Cairo-based AI customer management platform AIM Technologies has raised an undisclosed amount during a seed round led by local VC Sequence Ventures.
  • Innoventures is looking to deploy EGP 30 mn into local startups during 2022, which will be distributed across 20 companies with an average ticket size of EGP 1–2 mn.
  • Dubai-based VC Global Ventures is nearing a USD 100 mn target for its new fund, after attracting liquidity from Abu Dhabi and Saudi Arabia's state funds, ins. company Bupa Arabia, and unnamed US investors.


13-26 December (Monday-Sunday): Cleopatra Hospitals shareholders can subscribe to CI Capital’s voluntary tender offer for 26% of the company.

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

19 December (Sunday): Construction on bus rapid transit (BRT) stops, pedestrian bridges and tunnels on the Ring Road will begin this week.

21 December (Tuesday): Swvl and Magalix’ virtual Fireside Chat: Stories of Women in the Tech Field at 7pm.

25 December (Saturday): Jobzella’s Fifth Career Fair at the GrEEK Campus, 11am-6pm.

26 December (Sunday): The House of Representatives returns from recess.

31 December (Friday): Deadline for property owners to pay second installment of real estate taxes without late fees.

End of December: El Nasr Automotive plans to sign contracts with a new partner to locally assemble EVs.

End of 4Q2021: EdVentures plans to have closed at least one more edtech investment round.

End of 4Q2021: Fawry plans to have launched its MyFawry card.

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

1H2022: e-Finance’s digital healthcare service platform, eHealth, will launch its services.

1Q2022: Egypt will begin exporting natural gas to Lebanon.

1Q2022: Launch of the Egyptian Commodities Exchange.

1Q2022: Swvl acquisition of Viapool expected to close.

End of 1H2022: Emirati industrial company M Glory Holding and the Military Production Ministry will begin the mass production of dual fuel pickup trucks that can run on natural gas.

Second Half of January: Egypt will host the Egyptian-Bahraini Joint Committee.

The end of January: The Egyptian-Romanian business forum will take place with the aim of strengthening joint investment relations.

January 2022: Tenth of Ramadan dry port tender to be launched.

1 January 2022 (Saturday): Capital gains tax comes into effect on the EGX for local investors.

1 January 2022 (Saturday): Private sector minimum wage introduced.

1-15 January 2022 (Saturday-Saturday): Qualified Industrial Zones (QIZ) Joint Committee.

4 January 2022 (Tuesday): OPEC+ ministerial meeting.

7 January 2022 (Friday): Coptic Christmas.

10-13 January 2022 (Monday-Thursday): World Youth Forum, Sharm El Sheikh.

15 January (Saturday): Target date for the finalization of snackfood giant Edita’s acquisition of the Egyptian Belgian Company, owner of the Ole brand.

17-19 January 2022 (Monday-Wednesday): World Future Energy Summit, Abu Dhabi.

20 January 2022 (Thursday): Kadmar Shipping’s new line transporting agricultural crops between Alexandria and Russia begins its operations.

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

January-February 2022: Construction work on the Abu Qir metro upgrade will begin.

February 2022: Hassan Allam Construction’s new construction firm established with Russia’s Titan-2 to handle construction work on the Dabaa nuclear power plant begins its operations.

11 February 2022 (Friday): Deadline for Anghami SPAC merger.

11-13 February (Friday-Sunday) FIBA Intercontinental Cup, Cairo.

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

15 February 2022 (Tuesday): The Industrial Development Authority’s deadline for receiving offers from companies for licenses to manufacture steel products.

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

March 2022: 4Q2021 earnings season.

March 2022: Deadline for the World Health Organization’s intergovernmental negotiating body to meet to discuss binding treaty on future pandemic cooperation.

March 2022: World Cup playoffs.

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

3 April 2022 (Sunday): Bidding begins on the Industrial Development Authority’s license to manufacture tobacco products.

4 April 2022 (Monday): CDC Group will formally change its name to British International Investment.

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.

Late April – 15 May 2022: 1Q2022 earnings season

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.

July 2022: A law governing ins. for seasonal contractors will come into effect.

8 July 2022 (Friday): Arafat Day.

9-13 July 2022 (Saturday-Wednesday): Eid Al Adha, national holiday.

30 July 2022 (Saturday): Islamic New Year.

Late July – 14 August 2022: 2Q2022 earnings season.

September 2022: Egypt will display its first naval exhibition with the title Naval Power.

6 October 2022 (Thursday): Armed Forces Day, national holiday.

8 October 2022 (Saturday): Prophet Muhammad’s birthday.

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

Late October – 14 November 2022: 3Q2022 earnings season.

End of 2022: e-Aswaaq’s tourism platform will complete the roll out of its ticketing and online booking portal across 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.

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. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.