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Tuesday, 30 August 2022

Maait looks to shift the economic narrative with media blitz

Maait says the economy can ride out global economic shocks: Finance Minister Mohamed Maait took to the mic yesterday in a bid to counter a wave of negative press on the economy in recent weeks. With the recent narrative around the economy being dominated by concerns about the currency and Egypt’s access to FX, Maait sought to refocus the conversation on the ministry’s recent fiscal achievements, pointing to years-long trends of solid GDP growth and rising tax revenues, a decent primary surplus, and a solid track-record of narrowing the budget deficit.

The message? “Keep calm and carry on” amid concerns about inflation, calls for a further devaluation of the EGP, and investor fears about the country’s external debt position.


Egypt plans to issue CNY-denominated bonds worth more than USD 500 mn, Maait said. Earlier this month, Maait told us that Egypt is in talks with Chinese officials to issue panda bonds and is still on the hunt for bookrunners for the issuance.

And another Samurai bonds issuance in the pipeline … this time green? The government is also in discussions to issue green samurai bonds, Maait said. We made our maiden samurai bond debut in late March, when the government sold USD 500 mn of the JPY-denominated bonds.

FinMin is still waiting for conditions to improve before issuing any other bonds: The ministry will hold off on planned issuances of sustainable development bonds and sukuk until the markets stabilize, Maait reiterated.

Background: The government had been mulling selling the JPY- and CNY-denominated bonds back in 2019, but the sales were delayed because of complications caused by the pandemic.


Could we still see state IPOs this year? The government is still hoping to offer shares in state companies on the EGX between September and December, Maait told CNBC Arabia (watch, runtime: 9:29). Egypt had hoped to sell shares in as many as 10 state-owned companies on the EGX in 2022, before Russia’s invasion of Ukraine upended the global economy. Officials have since then suggested that strategic stake sales will be the way to go in the foreseeable future thanks to the volatility in global markets, which have seen two IPOs postponed and one fail.


Maait used the presser to unveil new figures from FY 2021-2022 and announced updated forecasts for the current fiscal year:

  • The ministry now expects the budget deficit to narrow to 5.6% this year and 5.0% in FY 2023-2024, down from 6.1% last year, Bloomberg Asharq reported Maait as saying. The government forecast this year’s deficit to come in at 6.1% in the budget.
  • The primary surplus will rise to 1.6% for the current fiscal year, up 0.1 percentage points from its budget forecast and 1.3% in FY 2021-2022.
  • The debt-to-GDP ratio rose from a forecasted 85% to 85.3% during last fiscal year, thanks to the changes in the exchange rate, Maait said. The ratio remains well within FinMin’s previous target of less than 90%.
  • Tax revenues were up 18.7% y-o-y to EGP 990 bn during FY 2021-2022, beating the ministry’s forecast of EGP 950 bn, as the state pushes to integrate the informal economy into a new, digitized tax system.


You’ve tuned in to Maait TV: Maait’s presser was given attention by most of the nation’s talking heads last night and the minister took his defense of the government’s economic record to Salet El Tahrir (watch, runtime: 24:48) and Al Hadath Al Youm’s Hadret Al Mowaten (watch, runtime: 1:13:18), where he criticized press reporting on the economy.

The message on the airwaves was rather different as the minister went on the offensive, accusing some in the media of peddling fake news and spreading “defamatory lies” that he said could either be stemming from ignorance or from a desire to incite panic among Egyptians. One such story the minister singled out: Reports that the IMF is trying to impose tough conditions in return for a loan — such as reforming bread subsidies and cutting back on social spending — which he said were untrue.

What Trump was to Jim Acosta, Maait was to Al Arabiya: The minister singled-out the Saudi broadcaster for particular criticism after it inaccurately quoted him as saying that the government is preparing measures to make hard currency available for certain industries during the presser. “I never said that; they misquoted me,” he made a point of saying on both talk shows.

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