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Sunday, 10 December 2017

Breaking down trade barriers, backing loans for SMEs, encouraging boldness in bureaucrats and more at the Africa 2017 conference

Breaking down trade barriers, backing loans for SMEs, encouraging boldness in bureaucrats and more at the Africa 2017 conference: A who’s who of Egyptian business gathered this weekend in Sharm El Sheikh for the 2017 edition of Egypt’s flagship conference on doing business with Africa. Plenty of news followed:

CBE Governor Tarek Amer announced that the central bank will start handing out assurances [the word we want to use starts with ‘guarant’ and ends in ‘ees’ but the spam filters hate it] to banks for SME loans by the end of December, Al Borsa reports. The CBE will back loans to SMEs in Upper Egypt to the tune of 70% of the value of the loan and will cover 60% of the loan value in the rest of Egypt. Amer added that EGP 45 bn in loans have been provided to SMEs so far under the CBE’s EGP 200 bn initiative.

President Abdel Fattah El Sisi announced that the government is working on new legislation intended to shield civil servants from punishment if an investment agreement does not work out. The move is designed to encourage government officials to take bold steps and initiatives without fear of political backlash which could lead to their firing, he said, according to Al Mal. Longtime readers of Enterprise would recall that timid and change-averse bureaucrats were one of the many complaints brought up by investors at the Egypt Economic Development Conference in Sharm El Sheikh back in 2015. The issue has been a persistent theme since the bureaucrats and former ministers were prosecuted and subjected to third-party lawsuits after the events of January 2011.

But the overarching theme of the conference was removing trade barriers in the continent — something we really need to work on considering our poor showing in that category of the World Bank’s Doing Business Report 2018. The theme was touched upon quite eloquently by our friend CIB Chairman Hisham Ezz Al-Arab, who called for Africa’s trading blocs to do more to cut trade barriers. Ezz Al-Arab said the move would do much to spur investment in the continent and drive industrial development, which the continent sorely needs, Al Masry Al Youm reports. Africa needs USD 90 bn for infrastructure development, healthcare and education, making it a choice location for investment, Ezz Al-Arab said. CBE Governor Tarek Amer also touched on the same point when he appeared to support a move towards acommon currency for the continent.He did acknowledge that such a move remains a dream, but should be a goal that African nations should aspire to, according to Al Shorouk.

In the less-distant horizon, it appears Egypt will continue to push to form an African Trade Zone through the merger of COMESA, EAC and SADC trade blocs. The issue is expected to come up at an African Union summit next month, sources said, according to AMAY. The ultimate goal would be to see tariffs between nations of the zone reduced 90% over a five-year period. Furthermore, the government and four other nations have agreed in principle to establish an overland route connecting Egypt and Chad, said Alaa Ezz, the secretary general of the Federation of Egyptian Chambers of Commerce, said in statements to state news agency MENA. The government is in talks with the EU to fund the feasibility study for the project and will issue a tender for the study soon, he added, according to Al Borsa.

Other highlights from the conference includes the Higher Education Ministry signing an MoU with emerging markets private equity giant Actis to establish a university in Egypt, Al Mal reports. It is unclear if the investment by Actis is part of its major pan-African higher education initiative, Honoris United Universities, but the company did say at the signing that the partnership would be similar to that of its South Africa Regents Business School, which is funded through Honoris.

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