AM — Macro Group’s IPO is back on and CI Capital now owns 23% of Cleopatra Hospitals

Good morning, friends, and welcome to the final business week of 2021. We hope Santa Claus found you — and that Christmas was wonderful for all of our readers who observe.

We have an incredibly packed issue this morning so we’re going to jump right in after quickly reminding you all that EnterprisePM is on hiatus this week.

PSA #1- We’re getting another six-month holiday on fees for inter-bank EGP transfers, ATM withdrawals and point-of-sale transactions, according to a Central Bank of Egypt (CBE) statement (pdf). The measures also extend the waiver on fees for contactless payment cards, mobile wallets, and e-payments until the end of June 2022, while the CBE will also continue to cover the cost of withdrawal fees for pensioners. The measures were introduced during the first wave of the pandemic in March 2020 and were most recently extended until the end of 2021.

PSA #2- Banks can continue holding board meetings online: Exemptions to central bank rules regarding minimum attendance levels at bank board meetings and allowing boards to hold their meetings online or by conference call have also been extended for another year, according to a separate CBE circular (pdf). The FRA has yet to say whether it will extend similar measures.

PSA #3- Measures brought in to aid the tourism industry amid the pandemic have also been extended for another year until 31 December, 2022, according to another central bank circular (pdf). Tourism companies can continue to request a repayment freeze of up to three years on debt, while employees of tourism companies can still ask for a six-month holiday on personal loans. Employees who have taken out loans as part of a 2015 initiative to support tourism workers also remain eligible for a payment moratorium.

PSA #4- We’re not holding our breath for a long weekend to mark New Year’s, as New Year’s Day falls on a Saturday, making it unclear whether we’ll have the following Sunday off. The central bank, stock market and cabinet have all been silent.

PSA #5- New Year’s weekend could be very wet in the capital city, with our favourite weather app calling for up to 5 mm of rain on Thursday, 10-15 mm on Friday, showers on Saturday and another c.10 mm of rain on Sunday. The rain could start even earlier in Alexandria, where there’s a chance of showers on Tuesday ahead of an equally rainy weekend.

***WANT TO HAVE BREAKFAST WITH US? Every year, we ask our readers to weigh in on what you expect for the year ahead in our Enterprise Reader Poll. Take a few minutes to give us your take on the outlook for your business and industry, whether you’re planning fresh investments and new hires, and how your business fared in the year past. We’ll share the results with the entire community in early January to help you shape your view of the year — and will invite eight of you to break bread with us. Another dozen of you who complete the poll will also get special Enterprise mugs to enjoy your morning beverage of choice.

WHAT’S HAPPENING TODAY-

It’s a big week for infrastructure in Upper Egypt: President Abdel Fattah El Sisi is set to inaugurate this morning a new power transformer station in Esna, south of Luxor, as part of a string of official openings of major development projects in Upper Egypt throughout the week, Al Shorouk reports.

FOR TOMORROW-

The Unified Budget Act is up for discussion at the House of Representatives tomorrow, according to parliament’s schedule. The legislation would require the government to be more transparent in how it plans public finances, forcing it to present an annual medium-term budgetary and fiscal strategy to the House and set spending limits for each ministry.

Also at the House: Education Minister Tarek Shawki will be in the building to respond to dozens of MPs’ inquiries about his decision to merge the science and math specializations in Thanaweya Amma into one pathway.

MARKET WATCH-

Anghami + Swvl SPACs are in a race to see who SPACs first in MENA: The two firms are both expecting their SPAC mergers to complete in the second half of January. Whoever makes it there first will become the first Middle Eastern tech company to be publicly traded on the tech-heavy US Nasdaq.

Anghami expects to close its merger with Nasdaq-listed blank-check firm Vistas Media Acquisition Company next month, the company announced in a statement. The streaming platform’s merger — which has an implied enterprise value of around USD 220 mn — is set to be approved at a special stockholders meeting on 19 January, after the US Securities and Exchange Commission greenlit the related paperwork.

Meanwhile, mass transportation startup Swvl will also complete its merger late next month, Al Mal quotes company CEO Mostafa Kandil as having said. Swvl will offer 35% of its shares on the Nasdaq through a merger with US SPAC Queen’s Gambit Growth Capital, having reached an agreement with the SPAC worth roughly USD 345 mn and valuing Swvl at around USD 1.5 bn.

** SPEAKING OF VENTURE CAPITAL: Flat6Labs publishes 10-year impact report: Cairo-headquartered startup accelerator Flat6Labs has helped create more than 4k direct jobs through more than 300 investments in startups across Egypt and the wider region, the firm said in its 10-year-anniversary impact report. The accelerator has grown its footprint across the MENA region since being founded in 2011 by our friends at Sawari Ventures, expanding to Saudi Arabia, the UAE, Tunisia, Lebanon, Bahrain, and Jordan. Watch Flat6Labs’ founders talk about the report and the past 10 years for the accelerator in a fireside chat to launch the report here (runtime: 40:05). The report was prepared with the assistance of the nice people at Inktank, our parent company.

CIRCLE YOUR CALENDAR-

CGT + private sector minimum wage coming into effect: The capital gains tax on EGX transactions and national minimum wage for private sector workers will each come into effect as of this Saturday, 1 January. Both have been met with significant resistance from the business community. The government introduced a package of sweeteners to cushion the impact of the 10% tax on EGX trades, while the National Council for Wages gave thousands of companies a six-week reprieve from the new minimum wage while it reviews their requests for exemptions or postponements.

Look out for an announcement on the second round of the state’s gold + minerals bid: The Oil Ministry will early next year announce the results of the second round of its exploration tender, an official source told El Watan.

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

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

In today’s issue: We look at a handful of this year’s book releases that dive into trends in education. These books look at the future of education and what schools will look like down the road, how to best prepare students for the job market of the future, and their thoughts on tech-enabled learning.

Cosmeceuticals giant Macro Group Pharma may make its EGX debut in the first quarter of 2022, a source familiar with the matter told Enterprise, adding that the exact timeline for the IPO has not yet been set. The company yesterday received approval from the Financial Regulatory Authority (FRA) to list on the bourse, according to an FRA statement (pdf), which said Macro Group plans to offer up to 45.8% of its shares in a transaction that could value the company at around EGP 3.5 bn.

The pharma group plans to start the book building process from scratch after the holiday season ends, Enterprise has learned. Macro Group postponed its IPO plans at the last minute in April despite strong appetite from international institutional investors, citing concern for the market’s capacity to absorb a packed offerings schedule on the EGX. The company was about to kick off retail subscription when the listing was postponed, with shares priced at between EGP 5.30-6.15 apiece for a total listing value of EGP 3.1-3.6 bn.

Favorable conditions pushing this forward: “The current favorable market conditions have created the right climate for our company to move forward with our IPO plans, and we look forward to having new shareholders join our journey, the journey of Egypt’s leading cosmeceuticals business,”  Macro CEO Hisham Wasfy told us.

ADVISORS: EFG Hermes is quarterbacking the transaction as sole global coordinator. EFG Hermes and Renaissance Capital are acting as joint bookrunners, while White & Case is counsel to the issuer. Inktank is investor relations advisor.

More IPOs to hit the EGX: The FRA has also given approval for Nahr Elkhair Development and Investment to offer up to 61% of its shares in a transaction that could value the company at EGP 500 mn, according to the statement. Other private-sector companies who we could see make an entry on the EGX in 2022 include Abu Auf and Ebtikar, while others have recently suggested they’re keeping an eye on market conditions.

EDITOR’S NOTE: This story was corrected on 12 January, 2021 to reflect that the EGP 3.5 bn figure refers to the potential value of 100% of Macro Group’s shares, not the 45.8% of shares set to be offered in the transaction. It was further corrected on 18 January, 2021 to reflect that, similarly, EGP 500 mn is the fair value estimate of Nahr Elkhair as a whole, not the 61% set to be offered. 

MCI Capital has acquired a 23% stake in Cleopatra Hospitals: MCI Capital Healthcare Partners, a subsidiary of state-owned financial services company CI Capital, has acquired around 23%, or 367.8 mn shares, of Cleopatra Hospitals Group (CHG), according to a Bloomberg Asharq. MCI bought the shares at EGP 5 apiece, making the transaction worth a total EGP 1.8 bn and valuing CHG at EGP 8 bn.

MCI Capital’s total holding in CHG now stands at around 26.8%: MCI already held a 3.8% stake in CHG before the acquisition, a source with first-hand knowledge told us. Creed Healthcare, which previously held 37.9% of CHG through its subsidiary Care Healthcare, remains the hospital group’s single biggest shareholder after selling a stake of between 8-12% in the company to MCI as part of the transaction.

MCI was hoping for a slightly bigger slice of CHG: CHG’s board last week approved MCI’s bid to acquire up to 26.2% of the company, noting that the EGP 5-per-share offer was 14% higher than CHG’s average share price over the past six months.

CHG’s shares inched up 1.0% yesterday, closing at EGP 4.95.

Eni to invest at least USD 1 bn on oil production in Suez Gulf, Nile Delta: Italian energy firm Eni has signed an agreement with the state-owned Egyptian General Petroleum Corporation (EGPC), committing Eni to spending a minimum USD 1 bn on exploration and extraction in the Gulf of Suez and Nile Delta regions, according to an Oil Ministry statement. The statement did not specify the timeframe in which the investments are expected to be made.

Eni also committed an extra USD 20 mn to drill four wells in the region, according to the statement.

Expect to see more (hopefully greener) agreements between the Oil Ministry and Eni: The two sides have lined up a number of joint initiatives on carbon capture, utilization and storage (CCUS), to be announced during the upcoming COP27 global climate summit in Sharm El Sheikh next year. Carbon capture is expected to be a big theme at COP27, with Oil Minister Tarek El Molla stressing its importance to the oil and gas industry and to combating climate change.

EFG Hermes’ leasing and factoring arm has signed an EGP 750 mn sale and leaseback agreement with Madinet Nasr for Housing and Development (MNHD), the two companies said in a statement (pdf) on Sunday. The agreement is for the sale and leaseback of MNHD’s Cobalt district in its Taj City development, MNHD head of investor relations Salah Katamish told us yesterday.

The agreement also includes “a few securitization issuances as follow-on transactions,” according to the statement, which did not disclose the duration of the lease agreement. EFG Hermes’ investment banking division acted as the financial advisor for the transaction.

EFG is growing its commercial property portfolio: The transaction follows a sale and leaseback agreement signed between EFG Hermes Corp Solutions and Misr Italia Properties in October, also amounting to EGP 750 mn, to refinance its Garden 8 Mall in New Cairo. EFG Hermes Corp-Solutions is looking to expand its business in commercial real estate financing, Corp-Solutions CEO Talal Elayat said in a statement on the Misr Italia transaction.

Minivans could replace tuktuks + licenses could be given to 16-year-olds: The Trade Ministry has finished drafting a plan to replace tuktuks with vehicles “similar” to minivans, Al Shorouk reports, citing an unnamed ministry source. The ministry’s plan would also streamline procedures to purchase the vehicles and would lower the minimum age for a license to 16. The plan has been shipped to the Finance Ministry to review the financing budget, the source said, but a separate source from the Finance Ministry denied having received it, saying it needs to first be reviewed by cabinet.

What do we know about the plan so far? The plan should determine which factories will assemble the minivans, as well as their required production capacity, and quota for local components, which was reportedly conditioned to be at 45%. It should also require minivans to be registered as public transport vehicles.

Background: The Trade Ministry recently issued a decision to stop importing the basic components needed for the local assembly of tuktuks, including the base, the chassis and engine in a bid to phase them out. Earlier reports suggested that GB Auto — which assembles tuktuks — could work with the Public Enterprises Ministry to manufacture the tuktuk alternatives, which were then reported to be natural gas-powered minivans, but the talks have since been shelved.

The government will set out a “clear vision” on subsidies when preparing next fiscal year’s state budget in March, Prime Minister Moustafa Madbouly said on Thursday. Speaking at a press conference to mark the first cabinet meeting to be held in the new administrative capital, Madbouly said that the government must strike a balance between providing support to citizens and maintaining the country’s economic performance, especially given global inflationary pressures and a rapidly increasing population.

Inflationary pressures are set to impact subsidies: Egypt is not immune from the squeeze on commodities, rising shipping costs and higher input costs seen worldwide, Madbouly said, adding that it wouldn’t be logical for local prices to remain fixed given the wider inflationary environment. His comments came a day after President Abdel Fattah El Sisi suggested that new rules could come into effect on eligibility for subsidy ration cards, as the government continues to reform the subsidy system to reduce its burden on the state budget.

Qalaa Holdings is looking to expand its investments in African mining and energy firms, including in Tanzania, Mozambique and Ghana, Qalaa Chairman and Founder Ahmed Heikal told CNBC on Thursday. Qalaa will look to gradually increase its investments in Africa, which currently stand at USD 500 mn, Heikal said. He added that the investment firm has suspended two of its energy projects in Sudan, one in gas and the other in solar power, until the situation in the country stabilizes.

ALSO- Qalaa subsidiary the Egyptian Refining Company (ERC) is still in talks for a debt restructuring agreement with its lenders and has not yet received preliminary approval to extend the loan’s tenor, contrary to a report in Al Mal that we picked up last week. The story has been updated on our website.

AND- NBE’s Al Ahly Leasing Company is looking to issue EGP 700 mn worth of securitized bonds in its first securitized offering, Al Shorouk reports, citing unnamed sources. No details were provided on an expected timeline for the offering. Dreny and Partners has been appointed as advisor for the issuance, KPMG Hazem Hassan as auditor, and Al Ahly Pharos as financial advisor.

The Health Ministry reported 823 new covid-19 infections yesterday, down from 866 the day before. Egypt has now disclosed a total of 381,343 confirmed cases of covid-19. The ministry also reported 37 new deaths, bringing the country’s total death toll to 21,608.

We’ve received 2.3 mn new covid-19 vaccines: A total of 2.3 mn covid-19 jabs — 1.5 mn of which were Pfizer, 462k Moderna, and 352.8k AstraZeneca — arrived at Cairo International Airport yesterday as part of the Gavi / Covax program, according to a Health Ministry statement.

The year did not start well for us, with daily cases reaching the highest number since early July 2020 and the Health Ministry reporting 1,409 new daily infections. We had hit 140,878 total cases as of the start of 2021 with a death toll of 7,741 at the beginning of the year, prompting the government to institute more lockdown measures. These numbers, coupled with fears of new variants had landed us on several countries’ no-flight and red lists, including a number of important markets such as the GCC, the UK and Russia, severely impacting tourism. As with all nations, Egypt had to reckon with the fact that any recovery would mean a mass vaccination campaign.

Egypt spared no effort to ensure it got its hands on enough covid jabs: Egypt signed an agreement with the World Health Organization’s (WHO) Gavi/Covax initiative to receive 40 mn vaccine doses in 2021, including AstraZeneca, Moderna, Johnson & Johnson, and Pfizer. Back in May, Russia and the Health Ministry signed a contract granting us 10 mn doses of the Russian Sputnik V covid jab, which we began receiving in June. We also inked a 20 mn dose agreement for China’s covid-19 vaccine Sinopharm. As of this week, Egypt had received a total 15 mn Pfizer shots from the US, who to date, also gave us 3.5 mn Moderna shots and over 1.3 mn Johnson & Johnson shots. We’ve also been receiving doses from a number of other countries, including an undisclosed number of jabs from Japan and 1.3 mn shots from Spain.

We started making our own vaccines: Back in May, Minapharm was contracted to produce some 40 mn doses per year of Russia’s Sputnik V jab, with production initially expected to begin 3Q2021. It appears the company hasn’t started manufacturing the jabs yet, with Russia’s ambassador in Cairo saying yesterday that Minapharm will begin producing the jabs for Egypt and Africa. We started producing locally-made Sinovac in our Vacsera facilities, with a target total production of 40 mn doses from June through year-end. Eva Pharma also got the green light to produce the Chinese jab in June, but it remains unclear when manufacturing is set to begin. And we could be looking at more locally made jabs with authorities in talks to locally produce the Moderna and AstraZeneca shots.

And our very own locally made covid jab Covi Vax made it to clinical trials last month after being in the works for almost a year.

The government kickstarted the year with its covid vaccination campaign, setting a target of having 40% of the population vaccinated by the end of the year. The campaign kicked off in January, targeting frontline medical staff working in fever wards, isolation facilities and chest hospitals. The program was then expanded to include those at risk from among the eldery and chronically sick in March and weeks later vaccine registration was open for all adults. To expedite the process, the government expanded the number of vaccination centers available, began offering same-day vaccination at walk-in clinics, and rolled out on-site vaccination kiosks in several locations, including at the Cairo Metro.

The government also got tough on anti-vaxxers, imposing new restrictions on the unvaccinated. Government facilities became off limits to the unvaccinated as of 1 December, with members of the public obligated to show proof that they’ve received at least one dose of a covid-19 vaccine in order to enter government facilities. Two weeks earlier, civil servants were not allowed to go to work unless they were vaccinated.

…and is pushing for vaccines for children as young as 12: Egypt authorized the use of the Pfizer-BioNTech covid vaccine for children aged 12-15 late November, only weeks after it greenlit vaccinating children between 15-18.

Now, the Health Ministry is offering booster shots to qualified individuals, including senior citizens with chronic medical conditions as well as medical staff. To make things easier, the ministry is shooting text messages to everyone in its database who qualifies for a booster with the date and center for their next jab.

Where do we currently stand? By our calculations, we have received a total of around 66.8 mn vaccine doses to date. Some 55 mn doses of various jabs have been given so far, at a rate of 551k vaccines per day, according to the Madbouly cabinet. The World Bank puts that number at 50.8 mn, with 19.6 mn (or 19.1% of the population) having received both doses.

Tourism has been slowly recovering over the past year, driven by the lifting of travel restrictions worldwide and mass vaccination programs at home and abroad. A number of key tourism markets lifted covid-19 travel restrictions, including the UK, which took us off the red list last month. Only a month after we were taken off the UK’s red list, bookings to Egypt and Turkey from the UK have soared 400% since our removal from the red list. In July, Russia finally lifted its six-year ban on direct flights between Russia and Egypt’s Red Sea destinations. Last month we started welcoming Russian tourists into the country once again after Moscow resumed charter flights between Russia and Hurghada and Sharm El Sheikh after

The government continued to give the sector a helping hand, with the central bank extending the Opex program — an initiative giving operators access to 5% interest loans to cover wages, maintenance expenses, and operating costs — until 31 December. And in a sign that the sector is indeed in recovery, CBE stimulus for capex was launched in May. Under the program, subsidized loans designed to help tourism companies fund capex can now cover up to 90% of a project’s renovation costs, up from 75% under the ongoing EGP 50 bn tourism support program.

Hotel operators then got a major boost back in October, when the government allowed them to operate at full capacity for the first time in 18 months. Hotels have been operating at 70% capacity since July, when the government eased the 50% limit imposed since June 2020. The Tourism Ministry is also launching a three-year international promotional campaign, while the Madbouly Cabinet is looking to hiring tourism operators to manage a number of tourism facilities and services at key landmarks.

This has done wonders for our arrival numbers: While we have no recent data on arrivals, around 3.5 mn tourists visited the country during 1H2021, which is around the same number who visited during all of 2020. Arrivals averaged 400k per month during the first five months of the year, which is nearly 40% of pre-pandemic figures. At the time, around 60% came from Eastern Europe. And this was before Russia lifted its flight ban.

…Not to mention revenues: While tourism revenues dropped by half during FY2020-21 (which ended last June) to record USD 4.9 bn, according to the CBE’s most recent balance of payments report, quarterly data shows that we are nearing pre-pandemic levels. 2Q2021 saw tourism revenues reach USD 1.7 bn, up from USD 305.0 mn in 2Q2020, and up from USD 986.5 mn in 4Q2020. Tourism Minister Khaled El Enany had said back in May that tourism revenues are expected to reach somewhere between USD 6 bn and USD 9 bn in FY2021, up from USD 4.4 bn last year.

Then just as we started to breathe a sigh of relief, along came Omicron: Late November and early December gave us major deja vu with Egypt being put on a number of no-fly lists by countries including Canada and Ecuador following the emergence of the Omicon variant. Canada has since lifted its ban.

But the sector seems to be unaffected (so far): Travel to tourism hotspots were largely unaffected by recently introduced travel restrictions. 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%, Al Borsa says, citing unnamed government officials.

And we’re looking to rollout boosters: Registration for booster shots for at-risk Egyptians kicked off earlier this month. As of last week a total of 400k qualified individuals were contacted to receive their booster shots. The Health Ministry is aiming to administer 23 mn booster shots by 1H2022.

Our 2021 recovery by the numbers: Following a difficult first year of the pandemic, 2021 saw the economy starting to get back on track. Loosening international travel restrictions, stabilizing energy markets, and the global vaccine rollout have underpinned a resurgence in economic growth this year. Tourists are returning, exports are back to pre-pandemic levels, and corporate earnings are looking healthier.

It hasn’t been without its challenges though: Supply chain disruptions, surging commodity prices, and concern about an imminent rise in global interest rates have all caused headaches for businesses this year. And the absence of recovery in private sector activity is a cause for concern.

Let’s start with the headline figure: GDP. After being one of the few countries in the world to avoid a recession in 2020, the past 12 months has seen Egypt build on a recovery that began in late 2020. Annual GDP went from 2.9% in 1Q to 7.2% in the second quarter and 9.8% in 3Q — the fastest rate of growth seen in two decades — partly thanks to improving economic fundamentals and partly due to a favorable base effect from the lower growth rates in 2020. Egypt’s economy is expected to grow at a 6-7% clip in 2Q2021-2022, Planning Minister Hala El Said said this month. El Said noted, but we’re still on track to end FY2021-2022 with a GDP growth rate of somewhere between 5.5% and 5.7%.

The hospitality sector has been the crown jewel in Egypt’s economic recovery this year, benefitting from the restoration of flights, the global vaccination rollout, and diminishing public concerns about Egypt’s covid epidemic. Quarterly tourism revenues are now not far from pre-pandemic levels, helping output in the hospitality sector to rise some 430% y-o-y in 2Q and 182% in 3Q from a year earlier, according to data from the Planning Ministry. Growth in manufacturing — the largest sector of the Egyptian economy — has been more muted but has still seen a rebound, rising 10.5% and 15.2% in the first and second quarters respectively.

But strong economic growth ≠ a strong private sector recovery: Non-oil private sector activity has been in contraction all year even as corporate earnings have recovered from the year-that-must-not-be-named. Firms have continued to suffer from a combination of depressed demand and rising costs, resulting in only three months of growth in the 21 months since March 2020.

Public finances have strengthened: Egypt beat its deficit targets during the previous fiscal year, narrowing the budget deficit from 8.0% of GDP to 7.4% and generating a 1.5% primary surplus. The Finance Ministry had initially targeted a 0.9% primary surplus and an overall deficit of 7.8%. It has been a slightly different story so far in FY2021-2022, with the most recent figures (pdf) showing that the deficit widened y-o-y during the July-October period from 2.7% to 3.1%, and the primary balance fell into a slight deficit.

Tax everything that moves: The Finance Ministry has worked overtime searching for new ways to tax people and businesses this year as it tries to raise revenues and strengthen public finances. The big one as far as resident investors are concerned is the 10% capital gains tax on EGX transactions, which the ministry decided to go ahead albeit with a package of sweeteners to quieten the industry backlash against the proposal and mitigate any blowback on EGX trading volumes.

Tax policy has focused equally on squeezing money out of the existing tax base — and on widening it: A 10% levy is being placed on all new mobile phones that aren’t SICO-made, while plans are afoot to impose a 2% development fee on durable goods and soft drinks, and a 5-20% tax on the costs of entry to entertainment venues and leisure facilities. Others are being brought into the tax system, including illegal private tutors and online content creators. The latter is also being asked to charge and remit VAT on ad revenue made through online platforms such as Google. New customs and e-invoicing systems being rolled out aim to make it much harder for tax cheats to avoid paying the state its due.

Speaking of rising prices: Egyptian consumer prices haven’t been immune from rising commodity prices abroad, which have pushed up the headline rate of inflation, particularly in the second half of the year when rising food and energy costs drove the rate to a 20-month high of 6.6%. Inflationary pressures seem to have so far been contained, with consumer prices never rising above the lower bound of the central bank’s 7% (±2%) target range and the headline rate currently averaging 5.5% for the year.

Rates have remained unchanged: The Central Bank of Egypt has kept interest rates on hold since November 2020, prioritizing foreign inflows and an inflation hedge over further economic stimulus.

And this has been good for the carry trade: Egypt has maintained the world’s highest real interest rate through the year, ensuring a steady stream of portfolio inflows into local debt by investors searching for yield in a world of historically-low rates. Portfolio investments also turned positive in FY2020-21, recording a net inflow of USD 18.7 bn this year, compared to a net outflow of USD 7.3 bn in the FY2019-20. Total investment in Egyptian debt hit a record USD 33 bn in August, though since then we haven’t heard anything from the Finance Ministry or the central bank, giving us little indication of how the beginning of the Fed taper in November has impacted inflows.

Foreign direct investment, on the other hand, has slipped: After showing signs of recovery at the tail-end of last year, FDI flows went into reverse during the first half of the year, falling to a mere USD 427 mn in 2Q, down two-thirds from 2Q2020 (aka the lockdown quarter) and the lowest quarterly figure since 4Q2011. The central bank is yet to publish the balance of payments figures for the third quarter.

The talking heads were focused on the revival of the Toshka megaproject as President Abdel Fattah El Sisi inaugurated the first 100k feddan phase of the land reclamation project yesterday. The project, which was initially conceived during Mubarak’s presidency, had already taken some EGP 6 bn of infrastructure investments from state coffers before being scrapped for not being economically viable, Kelma Akhira’s Lamees El Hadidi (watch, runtime: 4:38) and El Hekaya’s Amr Adib (watch, runtime: 6:38) noted.

Both Lamees and Adib lauded the Sisi administration for reviving the project and making use of the sunken cost from previous administrations. The story was also at the top of the agenda for Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 28:22) and Al Hayah Al Youm’s Mohamed Sherdy (watch, runtime: 1:31).