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Wednesday, 31 August 2022

THIS MORNING: Are some Egyptian banks finally issuing letters of credit to importers?

Good morning, wonderful people, and happy Wednesday to you all. It’s yet another busy news day, but before you dive into today’s issue, can we ask you to please take our Fall Reader Survey?

Tell us how you’re feeling about your business and the wider economy and we’ll be back with the results just in time to give you a sense of what everyone else is thinking heading into budget season.

How has 2022 been for your business? And how do you feel about what’s left of the year? Are you investing? Do you plan to hire new staff (or make cuts to your existing staff) now or in 2023? What’s the USD / EGP rate you expect to use for your 2023 budget? Where do you see your industry as a whole heading?

Make your voice heard in our Fall Reader Survey. It won’t take more than a few minutes to complete.

WATCH THIS SPACE- You might finally be able to get your hands on L/Cs as of today: A number of banks have begun, as of yesterday, issuing letters of credit (L/Cs) for importers after a five-month-long drought, Bloomberg Asharq reported last night, citing five banking sources. The report came in tandem with the government’s announcement of a basket of measures designed to release goods that have been stuck in ports due to a slowdown in opening L/Cs imposed by the central bank to address a shortage of foreign currency. We have more on these measures in this morning’s Economy section, below.

A pleasant (non-)surprise: The government has been coordinating with the Central Bank of Egypt’s (CBE) new governor, Hassan Abdalla, for over a week now over measures to release goods from ports.

Among the banks offering L/Cs: AAIB, QNB Alahli, Banque Misr, and National Bank of Egypt — though Asharq notes that the latter two state-owned banks are only guaranteeing lower-cost imports.

Quick refresher: The CBE in March began requiring importers to use L/Cs to purchase non-essential goods, instead of the previous system of documentary collection — a move that has made it almost impossible for companies to import goods in a number of sectors. Over the past five months, importers have said they have been unable to access L/Cs from their banks.

The elephant in every room right now: The FX shortage. Measures to ease import restrictions are all music to industry players’ ears, but none of this answers the question of how the government plans to bring greenbacks back into the country when imports are eased — and USD begins to leave the country.


Egypt is attending G20 climate talks today: Environment Minister Yasmine Fouad is in Bali, Indonesia, for the G20 Climate and Environment Ministerial Meeting, the ministry said yesterday. Fouad is representing Egypt at the gathering on behalf of Foreign Minister and COP27 President Sameh Shoukry, who is in Gabon attending Africa Climate Week.

Speaking of which: Africa Climate Week enters its third day in the Gabonese capital.

Beltone Financial shareholders will elect new board members following Chimera Investments’ acquisition of a majority stake in the firm. The company confirmed that it is planning to go ahead with a capital increase but only once it has formed a new board. The Abu Dhabi-based investment company purchased Orascom Financial’s 56% stake in Beltone earlier this month and appointed former investment minister and Masar chairwoman Dalia Khorshid the following week.

PSA #1- Y’all know price fixing is against the law, right? The Egyptian Competition Authority (ECA) saw fit to remind people of the consequences of price fixing yesterday amid what it says are increasing reports of potentially manipulative price hikes.

What are the consequences, again? Fine amounting to 12% of the revenues generated from the products, or, in the case that revenues are difficult to identify, a fine of up to EGP 500 mn.

PSA #2- Today is the deadline to catch a 65% break off late payment fines for your taxes. The waiver applies to late payment fees for customs tariffs, income, real estate, and sales taxes, VAT, and stamp duties among others. The remaining 35% of your due payments will need to be paid before next March.


Gorbachev dies, aged 91: Mikhail Gorbachev, the man responsible for dismantling the USSR and bringing an end to the Cold War, has died at age 91 from a “serious and protracted disease,” Russian news agencies cited hospital officials as saying. During his six years at the helm of the Communist Party, Gorbachev’s liberalizing attempts to rescue the ailing Soviet economy resulted in the break-up of the union, the end of the Iron Curtain in Eastern Europe, and the reunification of Germany. (Reuters | Bloomberg | WSJ | Washington Post | Financial Times | New York Times | CNN | The Guardian)

SIGN OF THE TIMES- Pakistan dodges default with IMF aid package: Pakistan and the IMF have agreed a USD 1.1 bn bailout package, saving the South Asian country from defaulting on its debts as inflationary pressures driven by soaring energy prices deplete its foreign reserves.


Mohieldin wants to see “localized” climate investment maps + carbon markets in Africa: Egypt’s climate czar, Mahmoud Mohieldin, took to the podium yesterday at Africa climate week in Gabon to spotlight some initiatives that could help move the climate agenda forward on the continent. These include: developing “localized” investment maps to help finance climate projects that can have an immediate impact on local communities, and setting up local carbon markets to help reduce greenhouse gas emissions. “New promising ideas need to be projectized, and existing projects must be replicated and scaled up,” he said.


It’s going to get easier for owners of overseas yachts to pitch up in Egypt: The Transport Ministry’s digital platform for foreign yachts will be up and running starting tomorrow, it said in a statement. The platform will act as a one-stop-shop for yacht owners to get the permits they need to come to Egypt and moor at marina’s across the country. We have the full rundown on the state’s efforts towards becoming a yacht tourism destination in our Hardhat here.

The Chemical and Fertilizers Export Council of the Trade and Industry Ministry is organizing a trade mission to Kenya between 4-8 October, the council said in a statement yesterday. Around 30 companies are set to take part in the mission, according to state news agency MENA.

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


*** 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: We have coffee with Etisalat Egypt CEO Hazem Metwally to go deep on how the company is transforming from telco to “tech-co.”

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