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Wednesday, 17 August 2022

THIS MORNING: Healthcare tithe could become tax-deductible + More political prisoners to be released today

Good morning, friends, and welcome to another uncharacteristically busy August news day. We have an absolutely packed issue for you this morning, so let us jump right in:

SIGN OF THE TIMES- It’s the first day of school for kids at Cairo American College. The resident 15-year-old, who was barely seven when Enterprise first published, returns to high school this morning, making us feel very old indeed.

Your morning commute is going to get steadily worse over the next five weeks or so as the kids trudge back into class. BISC and NCBIS go back on 28 August, AIS on 1 September, Alsson and the Lycée Français du Caire on 4 September. Public schools follow suit on 24 September.

FROM THE DEPT. OF GOOD NEWS- The healthcare tithe paid by all businesses could soon become taxdeductible. The Madbouly cabinet will soon review a bill that, if passed, would allow businesses to deduct the healthcare tithe from their taxable income, Finance Minister Mohamed Maait told investors this week, according to a ministry statement. All businesses pay a 0.25% tithe on their revenues to fund the new universal health ins. system which is currently not tax-deductible.

WATCH THIS SPACE- Another round of presidential pardons are happening today: Twenty-five prisoners will be released, Tarek El Khouly, a member of the Presidential Pardons Committee, said yesterday. Prominent activist Alaa Abdel Fattah’s name does not appear on the list El Khouly posted online.

HAPPENING TOMORROW-

Consensus in the market is that the Central Bank of Egypt will go for a rate hike tomorrow. As of yesterday, six of eight analysts and economists we surveyed in our interest rate poll see the CBE going for a rate hike: Four are calling a 100-bps hike, one is forecasting a 200-bps rise and another a more modest 50-bps increase. A Reuters poll out earlier this week is also calling a rate hike, with the wire service saying the sweet spot is 50 bps. Economist Nabil Zaki added his voice to the chorus yesterday, predicting a 200-bps hike in an interview on Salet El Tahrir (watch, runtime: 3:17). “The CBE has to make up for the rise in inflation and raise the interest rate in tandem with the US Federal Reserve’s rate hikes in order to bring back hot money into the country,” he said.

The Madbouly government will hold another round of consultations on its privatization strategy: Tomorrow it’s the turn of mining companies to voice their thoughts on the state ownership document. Every Sunday, Tuesday, and Thursday see workshops on how privatization plans will affect specific industries. You can find med-blog.com on the schedule of the meetings here.

What’s being said at the meetings? Broadly speaking, we think attendees are using the meetings more to discuss current industry conditions and problems than they are the state’s current involvement in their industry. Still: The government officials are due credit for staying the course with the consultations. We have roundups in our weekly Inside Industry vertical (presented in association with IDG) covering consultations with the FMCG, pharma, engineering and printing and packaging industries.

Expect more details on how gov’t plans to cut back on electricity: The Electricity Ministry will hold a press conference in the next few days to announce details of measures to curb electricity use that cabinet approved last week, Electricity Minister Mohamed Shaker reportedly told Al Mal.

THE BIG STORIES ABROAD- There are two stories dominating the front pages of the US press this morning:

#1- Biden seals his administration’s big legislative win in time for the midterms: US President Joe Biden has signed his flagship legislation increasing climate investment, raising corporate taxes and cutting drug prices into law. (Reuters | AP | NYT | Washington Post | WSJ)

#2- Trump 1, Liz Cheney 0? Anti-Maga Republican resistance leader Liz Cheney looks set for defeat in the Wyoming House primary against Trump-backed candidate Harriet Hageman. (AP | Reuters | NYT | Washington Post | WSJ)

CIRCLE YOUR CALENDAR-

Prequalification deadline for sea water desalination project proposal: Companies and consortiums have until 3pm CLT on 22 September 2022 to submit a prequalification application for sea water desalination projects, according to a statement (pdf) out yesterday. Folks who are interested should email desalrfq@sovfundegypt.com to request details on the documentation you’ll need to submit.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.


CORRECTION- In our coverage yesterday of foreign holdings of Egyptian treasury bills, we incorrectly reported the figures for May and June. Based on Central Bank of Egypt FX rates at the end of May and June, foreign holdings in June were USD 8.35 bn, and May holdings were USD 8.10 bn. The story has been updated on our website. H/t Ahmed A.

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*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.

In today’s issue: For the past several years, Egypt has been working to position itself as the hub for liquefied natural gas (LNG) in the region. This morning, we look at Egypt’s LNG infrastructure and our plans to expand it as the country looks to ramp up LNG exports from the Idku and Damietta facilities, particularly to fill the Russia-shaped hole in Europe’s natural gas supply.

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.

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