Back to the complete issue
Thursday, 24 November 2016

El Garhy talks to Bloomberg TV’s Manus Cranny

Invest in Egypt because of the “massive potential” and the “very big market,” Finance Minister Amr El Garhy told Bloomberg TV’s Manus Cranny in an interview (runtime: 15:19). The country has dealt with the currency concerns and is a free-float currency country now, “it’s happening in front of your eyes.”

Talking about the EGP float, increased interest rate: “Our progress is going very very well,” El Garhy says, “even beyond our expectation … especially when it comes to the flotation of the currency … the results are very encouraging.” El Garhy refused to say if there is a level at which he would not tolerate the exchange rate, saying it is the jurisdiction of the central bank and that the government expected it was going to be “volatile, somehow” (watch; runtime 02:20).

On the eurobond issuance: The initial plan was to issue the eurobonds in before the end of November but it was delayed due to “volatility” following the US presidential elections. It could still be done next week, however, he said but “the window is closing because by the second week of December the markets will be very quiet. So it’s either this or maybe by mid-January.” Egypt could issue USD 5-6 bn “all in all” in eurobonds through 2017, El Garhy told Cranny (watch; runtime 01:31).

Attracting investment: El Garhy says the government is also “working on the investment law,” and that should help attract more investors to Egypt. Most of the investments coming to Egypt now are “fresh money,” not rollovers, he added. On taking money out of Egypt, El Garhy said “I cannot give you a time” for when the repatriation backlog will be cleared.

The IMF agreement: Cranny asked if Egypt already received the funds promised by China, but the Finance Minister would not give a clear answer. El Garhy said the funds are approved “either received or [on] its way,” pointing to the matter being under the jurisdiction of the central bank. Moving on, Cranny asks about any planned subsidy cuts, with El Garhy saying it is a matter of “the plan adopted by the country,” but Egypt will not continue to give “an absolute subsidy to everyone.” El Garhy also did not give specifics on the target government’s target for FX reserves: “I will not talk about specific numbers … but prior to 2011 we were having a very good reserve level.”

Paying the oil companies? Cranny asks if Egypt will “consider paying [IOCs] as a big gesture to global investment?” El Garhy replies saying the relationship with the companies is a very strong one, “of course we will do that … it is a commitment,” and we can expect that in 2017.

Economic growth and inflation: Egypt’s economy is expected to grow by “something around 4%, give or take,” El Garhy says, “you’re in a transition period … now we’re seeing indirect investment coming … the next step is to see the real economy functioning at full steam” (watch; runtime 01:50). He says inflation will also be tamed and that it has “peaked” because of the currency situation. The government is targeting to pull inflation down gradually, aiming to bring it down to 10% “sometime mid-next year.”

State-owned companies IPOs: Listing Banque du Caire has already been mandated and “the work is taking place,” El Garhy says. As for AAIB? There are certain studies that have taken place. He did not elaborate further or on other companies in his pipeline but said the government is working with a number of investment banks of different fronts.

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.