THIS MORNING: Former Egyptian first lady Jehan El Sadat passes away, aged 88; G20 warns on economic recovery + agrees global tax pact
Good morning, ladies and gents — we start the new week with the official news that Eid El Adha will begin next Tuesday, 20 July after Dar Al Iftaa yesterday evening came out with a statement confirming the news. Though we’re expecting the vacation to run through Thursday, the government, banks, and the EGX are yet to announce the official days off.
The biggest news over the weekend came to us courtesy of Moscow, which finally announced that it had lifted its ban on direct flights to Egypt’s Red Sea resorts after six long years (though we’re still none the wiser about when airlines will have their routes up and running). This coincided with the biggest non-story of the weekend, which saw a lot of talk and equal amounts of hand-sitting at the UN Security Council’s chamber in New York, leaving the way forward through the GERD crisis as uncertain as ever. All that and more in the news well, below.
But before we get to it, we open the issue with more sombre news…
Former Egyptian first lady Jehan El Sadat passed away at the age of 88 last Friday, an Ittihadiya statement announced at the weekend. Her military funeral service was attended by President Abdel Fattah El-Sisi and dozens of governmental officials. The widow of late president Anwar El Sadat had reportedly been struggling with illness for some time. The former first lady was married to late president Anwar El Sadat from 1949 until his assassination in 1981. The BBC also took note of the former first lady’s passing, as well as her contribution to advancing women’s rights in Egypt where she pushed for laws granting women the right to custody of children after divorce.
THE BIG STORY INTERNATIONALLY- Covid variants + vaccine inequality threaten global economy -G20: G20 finance ministers warned yesterday that the spread of new variants of covid-19 and uneven vaccination rollouts across the developing world could jeopardize the global recovery. IMF Managing Director Kristalina Georgieva said that the rapidly spreading delta variant means that the virus remains the “fundamental risk facing the world,” while ministers pledged to maintain economic support to prevent recoveries from faltering.
Ministers also signed off on the global tax pact: G20 finance ministers yesterday signed off on an agreement that would levy an international tax on multinational corporations, Reuters reports. The plan, backed by G7 nations last month and agreed by some 130 countries last week, would impose a minimum global corporate tax rate of 15% on large corporations in every country they operate in.
Holdout states are being pressed to sign up:The G20 is urging all countries holding out to sign up to the global corporate tax pact before the meeting of G20 leaders, according to the Financial Times. Eight nations including Ireland, Barbados, Hungary and Estonia are refusing to sign up to the minimum tax.
But there are other hurdles: US lawmakers could still prevent the country from taking part in the accord, which requires Congressional approval to be finalized. A Treasury official told Bloomberg that pillar 1 of the agreement, which entails a redistribution of tax rights on multinationals, won't be greenlit before next year amid congressional opposition.
What’s next? The pact will be discussed by the G20 leaders when they convene in Italy in October. The OECD accord is slated for implementation in 2023.
***CATCH UP QUICK with the top stories from Thursday’s edition of EnterprisePM:
- Annual urban inflation inched up at a slower than expected pace in June: Capmas figures showed the headline rate accelerating from 4.8% in May to 4.9% last month, well below the 5.5% predicted by some analysts thanks to a favorable base effect and a slowdown in the growth of monthly food prices. The national rate (including urban and rural areas) increased at a sharper rate to 5.7% from 4.9%.
- Eni is on board with the government’s clean hydrogen plans: Eni will work on feasibility studies to produce green and blue hydrogen under an MoU signed with state-owned Egyptian Natural Gas Holding Company (EGAS).
- Eight Egyptian startups raised USD 52 mn in June: Egyptian startups were the second highest recipients of funding in MENA in June, with the majority of that figure coming from Trella’s USD 42 mn funding round co-led by Maersk Growth that was closed late last month.
WHAT’S HAPPENING TODAY-
The EGX will continue to test out closing auctions today, having closed out last week with a mock trial of the proposed system. A third mock session will be undertaken tomorrow. Last week we spoke to EGX boss Mohamed Farid, who gave us the lowdown on the proposal that’s currently on the table and what it could mean for the exchange.
Parliament will discuss today and tomorrow the draft bill that would toughen penalties for [redacted] harassment. The draft bill, approved by the House Legislative Committee in late June, would hand offenders between two and four years in prison and fines worth EGP 100k-200k. Under current legislation, the maximum penalty is a one-year jail sentence and a fine of up to EGP 10k.
It was the Copa America final last night: Argentina were crowned South American champions after edging out Brazil 1-0 to take home their first major cup in almost three decades.
PSA– Egyptians will now pay EGP 300 to issue a mandatory ins. certificate when issuing or renewing their passports under the travel ins. policy issued last month by the Financial Regulatory Authority (FRA), effective as of 3 July, according to the Official Gazette (pdf). The new policy covers all overseas trips that do not exceed 90 consecutive days. It sets a limit of EUR 30k in ins. coverage for medical expenses and hospitalization costs, provided that the patient bears the first EUR 100 in expenses. The decision also covers the costs of transportation of the insured person to Egypt in case of illness or accident, as well as the costs of repatriating their bodies in case of death.
HAPPENING THIS WEEK-
Are we going to get a decision on fuel prices? The government’s fuel pricing committee has been in talks since the beginning of the month over whether to raise, cut or leave on hold fuel prices during 3Q2021. We were expecting to hear something yesterday but a government official had suggested that a decision could instead be made later in the month.
The committee’s decision has been made more difficult by the inability of OPEC+ to reach a new oil supply agreement. The dispute between the UAE and Saudi Arabia which last week blocked a proposal to increase production has thrown the market into uncertainty. Some analysts see prices rising rapidly as the absence of new supply causes the market to tighten further. Others have warned that a dispute between two of OPEC’s largest producers could pose an existential threat to the alliance, potentially resulting in a new price war and plunging prices.
CIRCLE YOUR CALENDAR-
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.