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Wednesday, 4 July 2018

What we’re tracking on 04 July 2018

It’s all about the new Madbouly government’s policy platform today, ladies and gentlemen.

We have crossed over to the next (and frankly more challenging) stage of the economic reform program: Policy continuity is the order of the day, Madbouly made clear in presenting his program to the House of Representatives yesterday. The PM emphasized that the toughest part of the reform program is now behind us, and in a sense, he’s right: Subsidy reform was (and remains, for the next year or two) politically fraught. But it was a single, big decision: Hard to decide to make, easy to implement once you bite the bullet. Ditto the float of the EGP, the shoring up of the social safety net, the passage of key legislation such as the bankruptcy act. Big stuff, hard to swallow, but easy to do.

We’re now getting down to brass tacks, as our grandma would have said. Can export industries be created by government policy? If so, which industries (if any) are worthy of export subsidies? Do we really want short selling? Should public-sector and private companies be competing? Shouldn’t we have a clear policy that makes land available to manufacturers and other businesses at much, much lower prices? How do we revive the tourism industry? How can businesses be given a seat at the table in reconfiguring a broken education system that leaves us with both systemically high unemployment and untold numbers skilled jobs left unfilled? Et cetera, et cetera, ad nauseum.

The House has formed a committee to study Madbouly’s platform, which we feature in a Spotlight below. The committee is due to report back to parliament in 10 days’ time.

Meanwhile, the House of Representatives’ general assembly is in recess until Sunday 15 July, Youm7 reports. It’s still not clear when legislators will go on summer break before returning for the fall legislative season due to kick off in October.

Did we really receive the USD 2 bn IMF disbursement? Apparently, Egypt already received the fourth USD 2 bn portion of the USD 12 bn IMF Extended Fund Facility, government sources tell AMAY. The transfer arrived last Friday, the day the IMF’s executive board approved the disbursement, the source added. Take reports on timing with a grain of salt.

Warning of the day: There will be 128 mn of us by 2030 on the back of a trend toward earlier marriage and the declining use of contraceptives, Next Big Future says.

Careem is reportedly in early talks to ‘combine’ its business with Uber. Talks between the Dubai-based ride hailing service and the global industry heavyweight come as Uber is “looking to resolve a costly rivalry” in advance of a potential IPO next year, according to Bloomberg. The two sides have discussed a “number of potential [transaction] structures,” but have yet agree whether Careem’s current team would run a merged business or Uber will outright acquire its Mideast rival. In parallel, Careem is said to be “in the process of a new funding round that would bolster its position as Uber’s largest competitor in a fast-growing market,” the Financial Times adds. Side note: Abraaj was an early backer of Careem, having flipped its stake to Alwaleed bin Talal’s Kingdom Holding a little more than a year ago.

Speaking of Abraaj: KPMG is under scrutiny for its role in the still-unfolding Abraaj debacle after KPMG International called in law firm Linklaters to run an independent investigation of KPMG Dubai’s work on the high-profile private equity firm that has foundered amid allegations funds were misused. The Wall Street Journal details close ties between the two firms, including that a KPMG exec twice served as CFO of Abraaj (not terribly unusual in our part of the world, as most of you reading this will know). Look for there to be pressure on KPMG franchises near you to up their game on governance and toughness in audits, ladies and gents.

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