Sunday, 16 October 2022

AM — IMF / World Bank annual meetings end with Egypt loan talks still ongoing



Good morning, friends. We hope you had a wonderful weekend.

THE BIG STORY here at home is the Neverending Story that is the talks between Egypt and the IMF on a new assistance package. Today marks the last day of the IMF / World Bank meetings — and officials yesterday dashed our hopes of any big breakthrough.

A meeting between IMF and Egyptian officials yesterday ended with the two sides only saying they expect to reach an agreement on the long-awaited package “very soon.” We have the full rundown in this morning’s newswell, below.

SIGN OF THE TIMES #1- CIB the latest to raise USD CD rates: The country’s largest private lender raised interest rates on three-year USD certificates of deposit to 5.25%, according to Al Mal. We saw similar moves last week by state-owned lenders Banque du Caire, National Bank of Egypt and Banque Misr. A number of banks are raising rates to pull in USD liquidity after recently imposing caps on the use of foreign exchange abroad and online.

SIGN OF THE TIMES #2- “Diesel hits chaos mode in fresh blow for global economy,” blares the headline at the top of Bloomberg’s homepage this morning. Europe isn’t ready for a ban on Russian imports that’s less than four months away. French refineries are on strike. And the US has the lowest seasonal inventories since 1982. You may now thank Ahmed Heikal for the Egyptian Refining Company, which slashed our diesel imports by as much as 30-40%.

DATA POINT- Egypt registered a primary surplus of 0.11% of GDP in the first quarter of the 2022-2023 fiscal year, according to a Finance Ministry statement. Finance Minister Mohamed Maait shared the figure in separate meetings with staff at ratings agencies Moody’s and S&P Global, according to a statement. Maait also said efforts to digitize the tax system had led to a 20% y-o-y increase in tax revenues in the July-September period. The Madbouly government is targeting a primary surplus of 1.6% for the year. Reuters also took note of the news.

PSA- First rain of the fall? There’s a slim chance (c. 40%) of light rain in parts of Greater Cairo this morning — and a much better possibility (c. 70%) that Alexandria and other parts of the northern coastline will see showers throughout the day today, according to the national weather service. Nighttime in Cairo will hit lows of 21°C this week, with daytime highs reaching 27-28°C.


The House is back in session today through Tuesday. On the agenda:

Bread reform committee should get House approval: The House could approve as early as today Supply Minister Ali El Moselhy’s proposal to form an ad hoc committee to look into possible changes to the country’s massive bread subsidy program.

The House will also discuss amendments to the Agriculture Law today that would introduce harsher penalties for illegally building on agricultural land. Under the amendments, illegally building on agricultural land could cost up to EGP 10 mn and up to five years in prison. The House’s Legislative and Constitutional Affairs Committee approved the amendments earlier this month.

The auto bill that would regulate EV assembly (among other facets of the industry) is up for debate on Monday. “As it is a priority for the government, the bill could get a final approval in the House next week,” head of the House Industrial Committee Moataz Mahmoud told us last week.

What auto bill? The bill would set up a new regulatory body to set policies to localize the auto industry, including electric vehicles. Enterprise Climate has a deep dive.

Education Minister Reda Hegazy will answer questions in the House at some point this week, including on a shortage of public schools and teachers, the national curriculum, and a rise in private school tuition fees. Hegazy is also set to be asked about the state of public school buildings after the death of a child in a Giza school when a staircase collapsed made national news.

THE BIG STORY ABROAD over the weekend has been the slow-motion car crash that continues to unfold in UK markets / politics. PM Liz Truss won’t or can’t let go of the steering wheel as the car veers ever further from the road. She has managed to let go of former chancellor Kwasi Kwarteng, who has been replaced by Jeremy Hunt. Hunt admitted that Truss had made “mistakes” and warned of “difficult decisions ahead.” Brace for tax hikes, not tax cuts (listen, runtime: 14:29).

On Monday, the markets speak: The GBP fell against the USD and yields rose on Friday after Truss fired Kwarteng and said that parts of her disastrous mini-budget would be rolled back. Monday’s open will indicate whether markets have more trust in Hunt. (Reuters | CNBC | FT)

WATCH THIS SPACE #1- China’s Communist party is expected this week to appoint Xi Jinping to an unprecedented third term in office, making him “China’s most powerful leader since Mao Zedong,” the Western press writes. From the Financial Times to the Guardian, the New York Times, BBC, and the Wall Street Journal, Xi is everywhere this morning, with headlines including “China’s everlasting emperor awaits his third term” and “Xi Jinping is on the brink of total power.” The party congress kicks off today.

WATCH THIS SPACE #2- Apple is expected to launch new M2-powered iPad Pros “within days,” Bloomberg’s Mark Gurman reports. Don’t expect a new industrial design, he warns — and new Macs? Those probably aren’t coming until November, he reports.

OTHER THINGS worth knowing about this morning:

  • For the advertising nerds among us: Dan Wieden has died. The Wieden + Kennedy co-founder penned remarkable campaigns and came up with Nike’s “Just do it” tagline. The New York Times and AdAge have obits and Nike’s Phil Knight remembers the iconoclastic adman here.
  • Jamie Dimon thinks we can all look forward to plenty more volatility in markets for so long as the US Federal Reserve continues to boost rates and shrink its balance sheet. Last month’s near-explosion of dozens of UK pension funds was just the beginning, the JPMorgan CEO suggests.
  • Meta’s metaverse product, Horizon Worlds, isn’t getting much traction with users — or with the company’s own staff (Wall Street Journal | Daring Fireball)

COUNTDOWN TO COP (21 days to go)-

Cairo Water Week kicks off today and runs until Wednesday, 19 October. Some 18.5k attendees from 90 international and regional organizations are convening at the Nile Ritz Carlton in Cairo for the event, according to its website. The focus of this year’s edition is on preparations to discuss water resources at COP27. Catch the full agenda here.

Tomorrow sees the fifth Egypt and UN-led regional climate finance roundtable ahead of COP27, in Geneva, Switzerland. Catch our recent Going Green story on how the roundtables aim to secure investment for climate projects in developing nations ahead of COP27


Take our EV survey: Are you an ex-petrolhead shopping around for your first electric vehicle? EV-curious and wondering what all the fuss is about? Or are you not ready to say goodbye to that sweet smell of benzene as you wait at the gas station?

We want to hear from you: We’re taking the pulse on how the nation feels about Egypt’s nascent EV transition. Take a few minutes to fill out our short survey. We’ll be back with the results in a couple of weeks.



The Madbouly government’s economic conference takes place Sunday-Tuesday next week. We’re hoping for more details in the coming days.

Egypt and the UAE will host a two-day conference marking 50 years of bilateral ties. The gathering will take place 26-28 October and is being produced in association with the two governments.

The EGX is looking to drum up interest in listed companies on a roadshow to Dubai and Abu Dhabi later this month, an EGX source told Enterprise. The bourse has tapped Al Ahly Pharos to help manage the roadshow, with EGX boss Rami El Dokany set to meet with as many as 100 regional and international financial institutions, the source said.

Fuel prices to rise this month? We’re expecting the government to hike fuel prices for the seventh consecutive quarter when the fuel pricing committee meets this month. Fuel prices have risen by as much as 28% over the past 18 months in response to heightened international oil prices, which surged earlier this year on the back of Russia’s invasion of Ukraine.

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: The global economic slowdown has caught up with Egypt, with VC funding across the board tightening amid fears of recession. Recently, local stakeholders have become a bit more worried about what comes next and how to position Egypt as an attractive startup market. We sat down with general partner at fintech fund Nclude Basil Moftah to break down what investors and startups can learn from the downturn and what Egypt’s pitch to international VCs should look like going forward.


2CELLOS — LIVE AT SOMABAY: World-renowned and wildly popular cellist duo, 2CELLOS, are bringing the magic of music to Somabay on 18 November 2022. Get ready for an unforgettable night of captivating performances and electric energy. Book your ticket here.


Agreement on IMF loan coming “very soon” following DC meeting

Close, but no cigar: A meeting between Egyptian officials and the IMF yesterday ended with the two sides not yet able to announce an agreement on a long-awaited emergency loan package to the country. IMF staff and top Egyptian officials “agreed to finalize their work to reach a staff-level agreement very soon,” Fund Communications Director Gerry Rice said in a statement following the meeting.

We’ve been on the edge of our seats for a week now: Egyptian officials including members of Cabinet and Central Bank Governor Hassan Abdalla were in Washington, DC, last week attending the IMF / World Bank annual meetings. They had hinted that the loan package could be announced any minute. Ahead of yesterday’s meeting, IMF chief Kristalina Georgieva said at a presser on Friday that the assistance package could be finalized “within days,” adding that all “big policy issues” had been resolved, with only a few “smaller, technical details” yet to be ironed out.

Tunisia got its loan yesterday: The IMF and Tunisian authorities reached an agreement yesterday to extend a USD 1.9 bn loan to the country, according to a statement. Georgieva said that the Fund would be holding separate meetings with Egypt and Tunisia on Saturday, saying she was confident that the IMF would “back up” both countries, according to Reuters.

There are more than 20 other countries waiting their turn: Some 28 countries have applied for financial assistance including Egypt and Tunisia, Georgieva said, adding that the IMF still has some USD 700 bn in firepower at the ready to help struggling economies.


The IMF says yesterday’s discussions revolved around FX rate flexibility as well as fiscal and structural reform: “IMF staff and the Egyptian authorities have held very productive in-person discussions on the margins of the IMF and World Bank annual meetings,” Rice’s statement reads. He said the two sides made “substantial progress” on some key points, giving us a rare insight into the content of the negotiations. The statement highlights fiscal reforms (i.e., better budget management and bringing down the national debt) and structural reforms including upping private sector participation in the economy. Crucially, it also gives some detail on the IMF’s desire that the country embrace a more flexible EGP exchange rate.

What the IMF had to say about FX rate flexibility: According to Rice, yesterday’s meeting saw discussion of “monetary and exchange rate policies that would anchor inflation expectations, improve monetary policy transmission, improve the functioning of the foreign exchange market, and bolster Egypt’s external resilience.” He says such policies would allow the country to “gradually and sustainably rebuild foreign reserves.”

Expect a “comprehensive structural reform” program to include not just upping the private sector’s role in the economy, but measures designed to enhance competitiveness and accelerate our green energy transition, the statement suggests.


The Fund is holding the line on exchange rate flexibility: Currency was a key talking point for Georgieva before officials headed into yesterday’s talks. Asked why negotiations had dragged on for seven months and counting, Georgieva said “it boils down to exchange rate policy in Egypt,” saying that “it has to be thoughtfully designed.”

Georgieva also pointed to the changing of the guard at the Central Bank of Egypt (CBE) as a reason for the delay in talks, noting that the new governor needs to “feel comfortable with where we are headed with the policy.” Hassan Abdalla was appointed to head up the central bank on 18 August, after the sudden exit of Tarek Amer.

Maait signaled on the airwaves Friday night that we’ve gotten the message on FX: “The stable FX rate had negative impacts on Egypt’s reserves and the economy as a whole, especially in light of the external global economic shocks,” Finance Minister Mohamed Maait said during a phone-in with Amr Adib on El Hekaya (watch, runtime: 35:03), explaining why the lender sees a flexible exchange rate as crucial for the Egyptian economy. Maait said the lender had no demands regarding “the budget, financial policies, and the subsidy program,” and that it is only keen on exchange rate flexibility. Planning Minister Hala El Said and Maait have both suggested that the government is in favor of a flexible FX rate for the EGP “if necessary” in recent weeks.

REMEMBER- The EGP has lost a little more than a quarter of its value against the greenback this year. Pundits see the EGP settling somewhere between 22-24 to the USD — and you, dear readers, think the EGP will settle at 22.12 on average.


Both Georgieva and Maait remained tight-lipped about the size of the package, though Maait on Friday said the size would be determined in “two or three days.” Reuters quotes one source familiar with the matter as saying that the package is likely at the lower end of the USD 3-5 bn range expected by some pundits.

The World Bank will mull over granting Egypt loans “if it stays committed to the path of economic reform,” CNBC Arabia quotes World Bank chief David Malpass as saying, without disclosing details on the size or nature of the potential loans. The quote does not appear in the transcript of Malpass’ remarks.


Fiscal reforms are important protection against exogenous shocks, says Azour: “This is where the importance of adapting the monetary policy, to shield the economy from those external shocks, maintain a fiscal discipline that is very much needed, while strengthening the social protection mechanisms through the various instruments,” IMF director for the Middle East and North Africa Jihad Azour told reporters after the presser, explaining what reforms the IMF has been expecting from Egypt. Azour also noted that Egypt’s privatization program — along with other “structural reforms” — will “allow Egypt to maintain a high level of growth and address some of the issues that were brought in by the current exogenous shock and crisis.”

Fiscal support is also key for EMs to overcome rising food and energy prices, CBE governor says: Hassan Abdalla noted (pdf) the importance of the IMF and the World Bank’s role in continuing to provide financial assistance, including to “vulnerable middle-income countries,” during a speech delivered at a plenary session he chaired at the gathering.

Abdalla’s role as chair is notable and signals he is in very good standing with the IMF and World Bank. Abdalla was chairman of a plenary session on Friday that featured World Bank boss David Malpass IMF chief Kristalina Georgieva. You can catch Abdalla’s remarks here (watch, runtime: 54:15).

Abdalla noted the IMF and World Bank “have a central role to play in supporting the membership at this critical juncture,” saying they need to “guide countries’ policy responses while being mindful of social and political economy considerations.” Policymakers, he said, face a basket of challenges including “high food and energy prices and complicated tradeoffs in monetary policy.” The Bretton Woods institutions need to be “agile and generous,” he added, noting that they have while they have acted rapidly since the start of the pandemic and the crises that have followed, “they need to continue to widen they support, including to vulnerable middle income countries” such as Egypt.

BACKGROUND- Talks for an IMF package have stretched on for months: Egypt entered talks with the IMF in March as part of a bid to lock in financial support following the economic shocks caused by Russia’s war in Ukraine, rising interest rates, and the global-risk off in financial markets.


El Molla calls on European DFIs to invest in EastMed energy

To solve its energy crisis, Europe should invest in EastMed, says El Molla: Gas from Eastern Mediterranean countries could help tame Europe’s energy crisis — provided that development partners like the European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB) help fund the drilling, Reuters reports Oil Minister Tarek El Molla as saying.

What El Molla said: “If we need to secure the energy quickly … I think we need to incentivise these companies, the countries, the developers, by securing them funds,” the minister said during the East Mediterranean Gas Forum in Nicosia. El Molla emphasized that he wasn’t talking about commercial loans but “concessionary funds with easy access and relaxed terms.”

The EIB and EBRD have axed loans to oil and gas projects as part of climate change goals and now face pressure to reverse course given the cut-off of Russian natural gas to the continent.

El Molla’s argument: Hydrocarbons are a key part of the green transition. “If you are not going to talk about hydrocarbons, how are we going to accelerate these projects?” El Molla said. Gas development could go ahead in parallel with “important efforts” to create a “green corridor” that would see the Eastern Mediterranean region supply Europe with green hydrogen and electricity from renewables, he added.

But even with concessional funding, developing EastMed gas infrastructure is a long game, according to an article this weekend in The Economist. Egypt’s LNG facilities — which process natural gas from Israel for re-export to Europe — can serve only 2% of the continent’s energy demand when running at full capacity, it suggests. Local demand is also on the rise, cutting into the amount of gas that can be sent for export. “Expanding capacity will take years,” according to the newspaper.

Our LNG exports could hit USD 1 bn per month by January: That’s the government’s current target, Finance Minister Mohamed Maait said in a statement over the weekend. LNG exports have averaged USD 600 mn per month in revenues during the last quarter of the 2021-2022 fiscal year, he said.

BACKGROUND: As Russia pulls its oil and gas from European markets amid the fallout from the Ukraine war, the Egyptian government has redoubled efforts to position the country as a regional energy hub serving the continent. Egypt is a founding member of the EMGF, which brings together countries in the region to coordinate energy policy and develop the region’s gas reserves.The Oil Ministry has placed particular emphasis on building stronger ties with Israel, in June signing a nine-year agreement in June with the country to increase gas exports to the EU through our LNG facilities.

ALSO IN EASTMED ENERGY- Cyprus and Greece have broken ground on the EuroAsia Interconnector, according to Reuters. The EU-funded subsea cable will have capacity to transmit an annual 2 GW of electricity generated by natural gas and renewables from Cyprus and Israel,. The 2 GW EuroAfrica Interconnector, which adds Egypt to the grid, is expected to start commissioning (an industry term for entering the final stages of pre-launch testing) this December.


TAQA Arabia launches 20 MW solar plant in Sharm El Sheikh

Sharm’s biggest solar plant goes live ahead of COP27: Qalaa Holdings subsidiary TAQA Arabia has launched the largest solar power plant to date in Sharm El Sheikh, according to a press release (pdf). Built at a cost of EGP 250 mn, the 20 MW project is set to slash carbon emissions by around 500k tons through its 25-year lifespan, the statement reads.

The project is set to supply 30% of the power load in Nabq, a popular tourist neighborhood, according to the statement.

Just in time for COP: “The whole project development until operation has been accomplished in an unprecedented record time, which did not exceed four months,” TAQA Arabia CEO Pakinam Kafafi said. TAQA Arabia has also worked on EV charging and compressed natural gas (CNG) stations in South Sinai governorate, part of efforts to make Sharm the country’s first “green city” ahead of the UN climate summit in November.



Suez Canal to launch bunkering, catering services in the new year

The Suez Canal wants to be a one-stop ship shop come 2023: The Suez Canal Economic Zone (SCZone) will provide up new services to ships including bunkering and catering starting from the first quarter of next year, SCZone head Walid Gamal El Din told Enterprise, confirming a story first reported by state-run outlet MENA.

Bunkering firms are on probation: The bunkering licenses handed to Coral Energy, Minerva Bunkering, and Peninsula companies in February will only last a year, Gamal El Din said. The authority will then review the firms’ performance and see whether it needs to issue new licenses, he added. The three firms were awarded four licenses — two on the Red Sea and two on the Mediterranean — following a tender in February. The SCZone first announced plans to launch the new marine services back in January, as part of its 2020-2050 strategy.


Private bakeries can get state flour if they stick to state bread prices

Private bakeries can now get their hands on state wheat: Bakeries will join the list of private sector players eligible to buy wheat from state grain buyer GASC at EGP 10k per ton, according to a Supply Ministry statement.

This is limited for now to bakeries in Greater Cairo, Alexandria and Menoufia, who can start putting in requests for wheat starting tomorrow for a period of one month. GASC will take 72 hours to respond to requests. The scheme will be rolled out to the remaining governorates, the ministry said, without specifying when.

Private bakeries will need to stick to the state’s price list: Bakeries that source their wheat from GASC will have to adhere to ministry prices, which put the 40-gram fino loaf at EGP 0.75, the 60-gram loaf at EGP 1.00 and the unsubsidized 75-gram loaf of bread at EGP 1.00.

REMEMBER- GASC last week started selling wheat to private mills and flour to some private pasta makers for a month-long period, in a bid to bring down bread prices. There have been reports that some 700k tons of wheat destined for the private sector is stuck at ports amid the FX shortage.



Last night’s talk shows focused on the IMF package that’s arriving “very soon:” Deprived of a concrete announcement on our imminent IMF loan, the talking heads were forced to discuss it once again in hypothetical terms. A chicken feed crisis also had the pundits squawking.

Securing the IMF loan will attract foreign inflows: “The agreement is about more than just the money we’re getting, it will serve as a testament of confidence which will translate to more investments into the country,” House Budget and Planning Committee Chairman Fakhri El Fiqi told Hadrat El Mowaten (watch, runtime: 11:41). Kelma Akhira broke down the Fund’s statement regarding our loan (watch, runtime: 9:29). We have more on the story in our Economy section, above.

Too many chicks, not enough feed: Some USD 340 mn worth of corn and soybeans for chicken feed is stuck at ports waiting for letters of credit, former vice chairman of the Poultry Producers Union Mohamed El Shafei told El Hekaya (watch, runtime: 11:23). The lack of available food is forcing farmers to kill their chicks, he said.

The entire world is facing issues with corn and soybean supply, Agriculture Minister El Sayed El Quseir told Ala Mas’ouletty (watch, runtime: 10:46). The state is doing its best to protect poultry producers and is trying to boost local corn production, he added. The government released some USD 35 mn worth of corn imports and USD 15 mn in soybean imports earlier this month, he said. El Shafei said that won’t be enough to impact the market.

Also on the airwaves last night:


If only recycling headlines could solve climate change: It’s more of the same from the foreign press this morning. The Guardian has an interview with a Human Rights Watch official on the body’s latest report on Egypt — and the British Museum is under pressure from the Art Newspaper and the Museums Association to “raise human rights [concerns] as Egypt show opens.” Meanwhile, the Wall Street Journal takes another look at import bottlenecks amid attempts to maintain our FX reserves.


  • Copelouzos Group’s plan to lay a submarine cable to deliver 9.5 GW of wind and solar power to Europe from Egypt is getting ink from PV magazine;
  • Soliman, Hashish & Partners has penned a short brief on tech M&A for Lexology.


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Volkswagen plans to invest EUR 2.4 bn to secure Chinese chip tech, the Financial Times reports. The German carmaker, which earns around half its net income in China, will take a 60% stake in a JV with Chinese firm Horizon Robotics as it pushes into AI-assisted and driverless cars as a way to maintain its lucrative market share in the country. The move is “likely to curry favor with the Chinese government,” one Beijing-based consultant told the salmon-colored paper, at a time of heightened tensions between Beiijing and the US over new chip export restrictions by the Biden administration.

And Samsung gets a one-year exemption from US chip restrictions: The South Korean tech giant has reportedly been authorized to continue receiving the chip-making equipment needed to maintain its production lines in China, the Wall Street Journal reports.

ALSO- Saudi IPOs roll on: Riyadh Cables is mulling a USD c.400 mn debut on Tadawul this year. (Bloomberg)


  • A Fox-News Corp merger on the table? Rupert Murdoch is looking into merging his media companies Fox Corporation and News Corp. (Statement)
  • India’s car-sharing platform Zoomcar is expected to debut on the Nasdaq via a SPAC transaction that could value the company at USD 456 mn. The company launched its Egypt branch in October 2021. (Bloomberg)




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The EGX30 rose 0.5% at Thursday’s close on turnover of EGP 1.01 bn (2.9% above the 90-day average). Foreign investors were net sellers. The index is down 17.5% YTD.

In the green: Cleopatra Hospitals (+4.4%), Elsewedy Electric (+3.4%) and Madinet Nasr Housing (+2.0%).

In the red: GB Auto (-2.4%), Orascom Construction (-2.3%) and Rameda Pharma (-1.1%).


Foreign Minister Sameh Shoukry met his Indian counterpart Subrahmanyam Jaishankar over the weekend to mark the 75th anniversary of diplomatic ties between Egypt and India (watch, runtime: 24:30). The Indian foreign minister highlighted the tourism and pharma sectors as ripe for future cooperation.

Egypt backs UN resolution condemning Russia’s Ukraine annexations: Egypt was among 143 countries that voted in favor of a UN General Assembly (UNGA) resolution last week condemning Russia for annexing several regions in Ukraine and demanding that Moscow reverse the move, the Foreign Ministry said in a statement. The statement reiterates Egypt’s calls for Russian and Ukraine to reach a diplomatic solution to the conflict.


How can Egypt’s StartupLand pitch itself to global investors amidst the VC slowdown? The global economic slowdown has caught up with Egypt, with VC funding across the board tightening amid fears of recession. Recently, local stakeholders have become a bit more worried about what comes next and how to position Egypt as an attractive startup market.

We sat down with Basil Moftah, general partner at fintech fund Nclude, to break down what investors and startups can learn from the downturn and what Egypt’s pitch to international VCs should be going forward. Since Egypt’s StartupLand is still considered nascent and hasn’t witnessed real downturns before, startups and investors alike are learning how to handle current market conditions. But on the upside, there still is untapped global VC funding that hasn’t been deployed yet, of which local startups can later make use.

Edited excerpts from our conversation-

Egypt has a very nascent startup scene that is still learning. VC investment finds its roots globally in the 1970s-1980s. Therefore, other markets outside of Egypt are more mature since they went through multiple cycles. This relative immaturity of the Egyptian market means that everyone is learning what works for this market, especially since the startup scene started taking off around 2011.

One problem is that the market is lacking in investor numbers… There are very few active VC investors in Egypt, compared to the US. Back in 2020, the US recorded over 1.9k VC firms managing over 3.6k venture funds worth USD 548 bn in assets, according to the National Venture Capital Association. Today, the number of VC firms in Egypt stands at 51, according to Magnitt. “To have a market, you need a significant number of competing players with different theses and philosophies about how they invest,” Moftah says.

…And depth: This is the first time the Egyptian market has faced a downturn, so stakeholders are still learning on how to handle it, Moftah tells us. “Everyone is on a steep learning curve of triaging and understanding their portfolio,” he adds. The VC model is based on making a number of small wagers across a large portfolio, expecting only a handful to be successful.

The big question investors are trying to answer now: Which companies to keep backing and which ones to let go of? A typical VC fund portfolio deploys an average of 15-20 investments per fund. Deciding which of them to let go of can be very complicated because the capital intensity of different business models varies, Moftah explains. Capital intensity refers to how much money it would take a company to achieve profitability. Hence, VCs have to decide whether to back businesses that require less capital but grow slowly, or businesses that require more capital but grow faster. That’s an issue that local investors didn’t have to handle until recently.

The result: “This means for Egypt that you have a compounded effect of less money available,” Moftah tells us. Now, startups either have to achieve profitability much more quickly, meaning they have to be a lot smaller than what was the original plan for them, or they have to shut down.

For startups to properly handle this downturn, governance is key. Since the market started during a big upturn, there's been a lack of governance by boards and management teams amid chasing growth instead of profitability, Moftah says. Involving the startup’s board may have seemed like a headache, but keeping members up to date helps create alignment when difficult decisions arise.

…And having a plan B that doesn’t rely on more VC investments is important. Founders need to have a plan for when they’re unable to raise funds, Moftah says. This includes looking at what profitable products and services you have that would allow you to sustain the business for a longer period of time.

Long-term financial planning is also a must. Fundraising has always been a time-consuming process. “The typical investment round used to take 3-6 months to be completed — today, we’re looking at 6-12 months,” Moftah notes. Hence, startups should start the process as early as possible.

And if your startup is past its pre-series A investment round, regional and international investors are critical. “The biggest ticket size from a local investor that I have heard of is USD 5 mn,” he states. There are a couple of outliers, but generally, local VCs can't put in much more than that. “If you're looking to raise USD 10 mn or more, you’ll have to turn to regional and international investors,” Moftah adds.

But bear in mind: Building relationships and trust with those investors takes more time today than in the past, based on the trifecta mentioned above, Moftah says.

Although global economic turbulence has cast a shadow on investing in Egyptian startups, there is a silver lining. Most international VC funds are USD-based. The devaluation of the EGP means that in some ways, the cost of operating from a USD perspective is getting less expensive in Egypt, he explains.

But it isn’t all that rosy. At the same time, startup revenues are worth less because of the USD-EGP exchange rate.

So what should your startup pitch to international investors be? Startups that are expanding abroad pose a very attractive investment option. “When you expand, the majority of your costs will be based in Egypt, yet you'll be generating revenues from multiple markets,” Moftah says.

Egypt’s pitch in general is still attractive given it is one of the largest emerging markets with a young, tech-savvy population. But founders need to be prepared to prove to international investors how they will continue to grow at a fast pace through diversifying products and markets, and properly managing the cost base, he adds.

Globally, the VC squeeze will persist for at least 12 months, but that doesn’t mean that there isn’t any money in the bank. “There's a lot of dry powder around the world that hasn’t been invested yet,” Moftah says. There’s committed capital that VCs had previously raised, but not deployed yet, ranging between USD 200-600 bn globally, he suspects. Some of that will be deployed in Egypt.

And it won’t just rain — it’ll probably pour. “Dry powder usually comes a little bit like an avalanche,” Moftah tells us. Once investors see favorable economic conditions, the money will be rapidly deployed. They will have to move quickly to invest within the fund’s 3-5-year investment period. When this will happen is heavily debated at this point. Moftah suspects it could take at least 12 months.

But most of it will go to existing portfolio companies. Investors are going to dedicate a big portion of their funds to a few of their promising portfolio companies, Moftah explains. New investments will be met with much more scrutiny.

As a startup, use the downturn to learn how to tactically deploy your resources. “When you have less money, you make better decisions,” he tells us. Downturns are healthy because they force startups to focus on what matters as opposed to trying to be everything for everybody at the same time, he concludes.

Your top stories on future trends for the week:

  • Telda bags USD 20 mn round: Digital banking app Telda raised USD 20 mn in a seed round led by long-time investor Global Founders Capital (GFC) to help it tap new markets and expand its product offering.
  • MEA fintech startup platform FlapKap raised USD 3.6 mn in a seed round from follow-on investor A15 as well as Bolt by QED, Nclude, and Outliers.
  • Mastercard invests in fintech fund Nclude: Mastercard closed an undisclosed strategic investment in Nclude to invest in “promising early-and-growth-stage fintech and fintech enabled companies” and support digitization and financial inclusion in Egypt.
  • Digital healthcare platform Vezeeta raised an undisclosed amount from existing investors Abu Dhabi-based Gulf Capital and Swedish VNV Global.
  • Pharma startup i’Supply raised USD 1.5 mn in a pre-seed round led by Disruptech Ventures.
  • Capiter meltdown could end up in court: The two co-founders of B2B e-commerce startup Capiter have filed a lawsuit with the public prosecutor’s office against the company’s board of directors over their recent firing.
  • Egypt-born B2B beauty startup Glamera secured a USD 1.3 mn seed funding round led by Riyadh Angel Investors, with participation from Techstars Accelerator, Ithraa Capital, 100 Ventures, Silicon Valley Venture, Lucrative Ventures, and angel investors.



October: Air Sphinx, EgyptAir’s low-cost subsidiary to commence operations.

October: Fuel pricing committee meets to decide quarterly fuel prices.

10-16 October (Monday-Sunday): World Bank and IMF annual meetings, Washington, DC.

15-16 October (Saturday-Sunday): Indian External Affairs Minister S Jaishankar visits Egypt.

16-19 October (Sunday-Wednesday): Cairo Water Week 2022, Nile Ritz Carlton, Cairo.

17 October (Monday): Fifth Egypt and UN-led regional climate roundtable ahead of COP27, Geneva, Switzerland.

18 October (Tuesday): The Egyptian-Swedish business forum, Stockholm, Sweden.

23-25 ​​October (Sunday-Tuesday): Egypt economic conference, Cairo, Egypt.

24 October (Monday): Empowering Sustainable Trade Flows with Factoring conference, St. Regis Cairo.

26-28 October (Wednesday-Friday): Egypt celebrates 50 years of ties with the UAE.

27 October (Thursday): European Central Bank monetary policy meeting.

27-30 October (Thursday-Sunday): Cairo ICT, Egypt International Exhibition Center, New Cairo.

30 October-1 November (Sunday-Tuesday): Egypt Energy, Egypt International Exhibition Center (EIEC), New Cairo.

Late October-14 November: 3Q2022 earnings season.

Late October: First Abu Dhabi Bank to complete full integration with Bank Audi’s Egyptian operations after merger.


1-2 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

1-2 November (Tuesday-Wednesday): Arab League annual summit, Algiers, Algeria.

3 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

3-5 November (Thursday-Saturday): Egypt Fashion Week.

4-6 November (Friday-Sunday): Autotech auto exhibition, Cairo International Exhibition and Convention Center.

6-18 November (Sunday-Friday): Egypt will host COP27 in Sharm El Sheikh.

7 November (Monday): The inauguration of the first line of the high-speed rail.

9 November (Wednesday): Finance Ministry to host “Finance Day” at COP27.

7-13 November (Mon-Sun): The International University Sports Federation (FISU) World University Squash Championships, New Giza.

21 November-18 December (Monday-Sunday): 2022 Fifa World Cup, Qatar.

27 – 28 November (Thursday-Friday): The first edition of the Egypt Media Forum.


3 December (Saturday): Dior Men’s pre-fall collection show in Giza.

13-14 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

13-15 December (Tuesday-Thursday): US-Africa Leaders Summit.

15 December (Thursday): European Central Bank monetary policy meeting.

22 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

December: The Sixth of October dry port will begin operations.

December: Egyptian Automotive Summit.

December: Egypt to expand Sudan electricity link capacity to 300 MW.


January: EGX-listed companies and non-bank lenders will submit ESG reports for the first time.

January: Fuel pricing committee meets to decide quarterly fuel prices.

1 January (Sunday): Use of Nafeza becomes compulsory for air freight.

1 January (Sunday): Residential electricity bills are set to rise as per the government’s six-year roadmap (pdf) to restructure electricity prices by 2025.

7 January (Saturday): Coptic Christmas.

24 January-6 February: The 54th Cairo International Book Fair, Egypt International Exhibition Center

25 January (Wednesday): 25 January revolution anniversary / Police Day.

26 January (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

30 January-1 February (Monday-Wednesday): CI Capital’s Annual MENA Investor Conference 2023, Cairo, Egypt.


11 February (Saturday): Second semester of 2022-2023 academic year begins for public universities.

13-15 February (Monday-Wednesday): The Egypt Petroleum Show (Egyps), Egypt International Exhibition Center, Cairo.

23-27 February (Thursday-Monday): The eighth annual Business Women of Egypt’s Women for Success conference.

MARCH 2023

March: 4Q2022 earnings season.

23 March (Wednesday): First day of Ramadan (TBC). Maghreb will be at 6:08pm CLT.

APRIL 2023

17 April (Monday): Sham El Nessim.

22 April (Saturday): Eid El Fitr (TBC).

25 April (Tuesday): Sinai Liberation Day.

27 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC).

Late April – 15 May: 1Q2023 earnings season.

MAY 2023

1 May (Monday): Labor Day.

4 May (Thursday) National holiday in observance of Labor Day (TBC).

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

JUNE 2023

19-21 June (Monday-Wednesday) Egypt Infrastructure and Water Expo debuts at the Egypt International Exhibition Center.

28 June-2 July (Wednesday-Sunday): Eid El Adha (TBC).

30 June (Friday): June 30 Revolution Day.

JULY 2023

18 July (Tuesday): Islamic New Year.

20 July (Thursday): National holiday in observance of Islamic New Year (TBC).

23 July (Sunday): Revolution Day.

27 July (Thursday): National holiday in observance of Revolution Day.

Late July-14 August: 2Q2023 earnings season.


26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

28 September (Thursday): National holiday in observance of Prophet Muhammad’s birthday (TBC).


6 October (Friday): Armed Forces Day.

Late October-14 November: 3Q2023 earnings season.


2H 2022: The inauguration of the Grand Egyptian Museum.

2H 2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H 2022: The government will have vaccinated 70% of the population.

3Q 2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

3Q 2022: Swvl to close acquisition of Urbvan Mobility.

4Q 2022: Infinity + Africa Finance Corporation to close acquisition of Lekela Power.

4Q 2022: Electricity Ministry to tender six solar projects in Aswan Governorate.

4Q2022: Raya Holding subsidiary Aman and Qalaa Holdings’ Taqa Arabia to launch their fintech company.

4Q 2022: Saudi Jamjoom Pharma to inaugurate its EGP 1 bn pharma factory in El Obour.

End of 2022: Decent Life first phase scheduled for completion.

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

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

1Q 2023: Adnoc Distribution’s acquisition of 50% of TotalEnergies Egypt to close.

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