THIS MORNING: It’s the big budget season finale at the House + MbS has landed
It’s hump day, ladies and gentlemen, and what a hump it is. Our privatization drive continues to guide the conversation, while regulation in key sectors appears to be the dominant theme this week as the House of Representatives approaches its summer recess.
Elsewhere: Chevron is stepping up to help us realize our natgas export ambitions.
And there’s fresh buy-in from Saudi investors to our fintech market as the Alhokair family purchases a stake in EFG Hermes’ BNPL platform valU – and promising signs of more foreign investment to come as Gulf sovereign wealth funds eye our market once again.
THE BIG STORY here at home is the biggest regulatory shake up the real estate sector has seen in years, as the government brings new and ongoing developments under stricter oversight on project timelines and funding in a move to back consumers and cut market risk.
THE BIG STORY ABROAD: The eyes of much of the international press today are turned on the political drama unfolding in Israel, where voters will head to the polls once more after the fragile coalition government led by Prime Minister Naftali Bennett collapsed over internal disputes after just a year in power. Bennett announced his plan to dissolve the government in a televised statement alongside Foreign Minister Yair Lapid, who will serve as interim PM until new elections are held. “We are standing before you today in a moment that is not easy, but with the understanding we made the right decision for Israel,” Bennett said. Expect the elections sometime in October.
Will Bibi stage a comeback? The fifth elections in less than four years present a chance for the return of Israel’s longest-serving PM and opposition leader Benjamin Netanyahu to return to power. Reuters, the Associated Press, Bloomberg, and the BBC all have more.
WHAT’S HAPPENING TODAY-
Budget season reaches its climax today when MPs take a final vote on the FY 2022-2023 budget and socio-economic development plan. For more budget reax: Senate | House.
Maait responds to MPs criticisms: Finance Minister Mohamed Maait told MPs that their call for more austerity to tackle the public debt in next fiscal year’s budget “sounds great,” but could negatively impact healthcare, education, and salaries, “which are in desperate need of greater spending all the time,” according to Ahram Online. He said the government did have a strategy to bring down debt but reminded MPs that the war in Ukraine and the covid pandemic had taken a toll on the public purse amounting to some USD 7.5 bn.
Also at the House: It’s automotive imports day. The House Economics Committee is set to discuss issues with automotive imports, after three MPs submitted separate briefing requests. Rep. Ahmed Bahaa Shalaby and Rep. Ahmed El Hetta filed briefing requests on the Trade and Industry Ministry’s decision from May of last year barring importers from bringing in used electric vehicles or EVs that are not the manufacturer’s latest model. The decision “goes against the state’s push towards a green economy and its policy of encouraging environmentally-friendly vehicles,” Shalaby said. The decision has reportedly also pushed up the prices of imported EVs being sold in the local market, the MP said.
Separately, Rep. Amal Rizk filed a briefing request on the ministry’s recently-updated import regulations (pdf) for passenger cars, which impose new safety and maintenance requirements. The regulations have pushed local dealerships to raise car prices for consumers, Rizk claimed. Although importers did ask for more time to comply with the regulations in April, the bigger culprit behind higher car prices is the huge gap between supply and demand in the market. Thousands of cars have been stuck in port and foreign manufacturers essentially suspended sales to Egypt after new rules handed down in March required importers to use letters of credit to purchase goods, instead of documentary collection.
ANOTHER BIG DAY IN DIPLOMACY-
Expect to hear more on MbS’ visit to Egypt today. Saudi Crown Prince Mohammed bin Salman was greeted by President Abdel Fattah El Sisi at Cairo Airport when he touched down yesterday for a two-day visit, a statement by Ittihadiya read. The pair will hold talks today. The Saudi prince’s visit to Cairo is part of a three-day tour that will take him to Jordan and Turkey later this week. The tour is MbS’ first outside the Gulf in over three years, Reuters notes.
Saudi Arabia lifts Turkey travel ban ahead of MbS visit: Ahead of the Crown Prince’s landing in Ankara, Riyadh has ended its travel ban on Turkey (and Ethiopia, Vietnam, and India), according to the Saudi Press Agency, allowing citizens to visit the country for the first time since the kingdom introduced covid travel restrictions in March 2020.
And we should sign the long-awaited Lebanon gas pact today: Lebanon’s caretaker Energy Minister Walid Fayad told the country’s Al-Jomhouria newspaper, that Lebanon, Egypt, and Syria will today sign the agreement to import gas from Egypt via the newly renovated Arab Gas pipeline. The plan has been mired in diplomatic wrangling for months, and will likely still need US sign-off and a financing pledge from the World Bank to get the final go-ahead.
FROM PLANET CONFERENCE-
The two-day Aswan Forum for Sustainable Peace and Development starts today.
It’s the second and final day of CIB and the Egyptian Center for Economic Studies’ (ECES) joint conference, Towards COP27 and Beyond, tomorrow at 9am at Semiramis Intercontinental. You can register to attend the conference at the venue or online via Zoom, or catch the event’s live stream on ECES’ Facebook page.
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WAR WATCH- There’s potentially a new flashpoint developing in the increasingly hostile relationship between Europe and Russia after Lithuania moved to block the transport of sanctioned goods to the Russian territory Kaliningrad. The exclave — sandwiched between Poland and Lithuania on the Baltic coast — is reliant on rail that transits Lithuania to obtain goods and raw materials, and now faces being unable to obtain 50% of its imports because of the ban. Moscow called the move “unprecedented,” and vowed to “take actions to protect its national interests” if the restrictions are not lifted. Reuters has more.
Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we looked at the new customs breaks designed to speed up the localization of industry and lessen our dependence on international supply chains.
CIRCLE YOUR CALENDAR-
It’s interest rate week: The Central Bank of Egypt will meet on Thursday to discuss interest rates. A majority of analysts and economists we surveyed expect policymakers to leave rates unchanged, according to our customary poll.
The Big 5 Construct Egypt (pdf) construction industry exhibition runs from 25-27 June at the Egypt International Exhibition Center (EIEC) in Cairo.
Amcham AGM later this month: Our friends over at Amcham will hold their annual general meeting on Monday 27 June at the St. Regis Cairo Hotel. Finance Minister Mohamed Maait will address the gathering.
A call for women entrepreneurs: Visa, in collaboration with CIB and USAID, launched the She’s Next initiative (pdf) in Egypt, giving women-led businesses the chance to snag one of five USD 10k grants, as well as one year of coaching from IFundWomen with networking and mentoring opportunities. Applications close on 20 July.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.
*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.
In today’s issue: As the clock ticks down to COP27, we sat down with Marina Wes, the World Bank’s country director for Egypt, Yemen and Djibouti, to talk about the energy transition, climate finance, and the importance of bringing the private sector into the fold.
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