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July-August 2021
Vol 27 Issue 7 LE 30
Opening Up the
Export Market
Mohammed
El-Sallab
is highly optimistic
Egypt, and for good
reason.
Editor’s Note
4
bt
New Budget,
New Beginning
It is summer, but that does not mean it that our economy is in vacation.
The Egyptian economy is about to move from reform to modernization,
with parliament recently approving the national budget for the
fiscal year 2021/22 and pushing Egypt’s economy into the next phase of
economic improvement. During the past few years, the country’s macroeconomic
and structural reforms stabilized the economy and helped
it maintain improved fiscal and external accounts through the global
COVID-19 crisis.
The most populous Arab country’s economy is proving resilient to the
immense human and financial costs caused by the COVID-19 crisis. This
resilience is mainly explained by the successful implementation of the
economic reform program since 2016, which amplified the fiscal space to
withstand the pandemic’s adverse effects.
While Egypt posted negative economic growth rates from April to June
2020 at the height of the crisis, overall economic growth remained positive
at 3.6 percent for fiscal year 2019/20. This estimate is only slightly lower
than initial projections of the pandemic’s impact on Egypt’s economy, with
its early estimates of annual economic growth amounting to 3.8 percent,
according to the International Food Policy Research Institute (IFPRI)
and the Ministry of Planning and Economic Development (MPED). The
deviation between the early and final estimate can be mainly explained by
lower-than-expected growth rates in the manufacturing and health services
sectors as well as the better-than-expected performance of the trade and
transport sectors.
In this issue of Business Today, we analyze the Egyptian economy’s performance
in light of the new national budget and tackle the challenges that
country’s economy will face in amidst the fourth wave of the coronavirus
pandemic.
We also highlight the senate’s approval of the unified public finance bill,
which holds much promise for the Egyptian economy. Business Today
Egypt speaks with Akmal Nagaty, Secretary of the Senate Financial and
Economic Affairs Committee and a member of the Coordination of Youth
of Parties and Politicians, to understand the bill and its achievable returns.
The draft law is in line with the new Egyptian constitution, achieving
Egypt’s strategy for sustainable development (Egypt Vision 2030) and considering
international practices, as it integrates the state’s budget law and
the government accounting law into a unified law, according to Nagaty.
The draft law also comes within the framework of the state’s legislative reform
move, working to improve the Egyptian economy, in light of changes
in the general budget, as well as international institutions’ recommendations
on developing financial performance.
Happy summer!
July-August 2021
Mohamed Abdel Baky
mabdelbaky@egypttoday.com
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To take on the unknown, venture into the
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a spirit carried forward by every
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In This Issue
Vol. 27 No. 7-8 | July/August 2021
www.BusinessTodayEgypt.com
Cover design by Heba Mekky
4 Editor’s Note
8 In Brief
Infographic
10 Mena Data Response: Egypt
Consumer Prices (Jul.)
The CBE will keep rates on hold for
now, as inflation moves back within
targets.
By James Swanston, MENA Economist
14 MENA Data Response: Saudi
Arabia GDP
(Q2, Flash Estimate)
Recovery picking up the pace.
By James Swanston, MENA Economist
News in Focus
18 Egypt’s Plastic Currency on its Way
Egypt revealed the first pictures of its
upcoming plastic LE 10 and LE 20
notes.
By Hanan Mohamed
22 Fitch is positive on the EGP
Egyptian Pound to Remain Stable in
H221, slightly depreciating in 2022.
By Fitch Solutions
26 Spotlight on Egypt’s Unified
Public Finance Law
Business Today Egypt speaks with
Akmal Nagaty, Secretary of the
Senate Financial and Economic
Affairs Committee, to understand
the bill and its prospective returns.
By Hanan Mohamed
30 Establishing Arab Court of
Arbitration in Egypt
What are the benefits and
advantages of this decision,
entailsingthat the court will begin
operating?
By Hanan Mohamed
6 July/August 2021
www.BusinessTodayEgypt.com
In This Issue
Opinion
34 Egypt’s Broken Trade Link
OThe most popolous Arab
country didn’t see the benefits
that other developing countries
did in the 2000s.
By Raymond Robertson, Mexico
Vergara, Deeksha Kokas and Gladys
Lopez-Acevedo
Spotlight
36 Fintech in non-banking
financial activities: Benefits and
challenges
By Asmaa Refaat
40 The Domino Effect: Global
Chip Shortage Crisis Hits the
Egyptian Market
By Basant Gamal
Face Of Business
44 Mohamed El-Sallab Chairman
of the BoD of Mostafa El-Sallab
Group On the Egyptian
Economy and Industry Outlook
Few businesses are as successful
as El-Sallab Group. Mohammed
El-Sallab speaks about the
legacy, and why he’s bullish on
Egypt.
© COPYRIGHT BUSINESS TODAY EGYPT 2021.
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In-Depth
52 Meeting The Challenge
How the ICT sector took
a global pandemic in stride.
By Christine Salzmann
64 bt Scene
74 Last Word
www.BusinessTodayEgypt.com July/August 2021
7
In Brief Egypt
EBRD provides QNB ALAHLI $50M loan to boost green investment in Egypt
The European Bank for Reconstruction and Development
(EBRD) announced providing QNB ALAHLI in Egypt a loan
worth $50 million aiming to enhance small businesses and green
investments in the state.
EBRD clarified that the loan, which includes $ 7.5 million of
concessional finance from the Green Climate Fund, will be used
for on-lending to households and local small and medium-sized
enterprises (SMEs).
“The European Union (EU) will support the financing to QNB
ALAHLI with up to €5.128 million of EU funds for incentive
payments to projects that are successfully implemented and
verified. The EU will also provide a comprehensive technical
assistance package of up to €6.2 million for all participating
financial institutions and their clients, as well as for policy
dialogue,” it added.
It clarified that QNB ALAHLI will extend the EBRD’s financing
to private sub-borrowers, including individual households and
SMEs, operating in the residential, agribusiness, industrial,
commercial and service sectors, who are developing green,
energy efficiency, water efficiency, renewable energy and resource
efficiency projects.
Egypt, Germany seal 12 development finance deals
International Cooperation Minister Rania el-Mashaat said that 12
development finance agreements were signed with Germany during the first
half of 2021.
Worth 197 million euros, the agreements were in line with a state vision
to implement development projects in the energy and vocational training
fields, encouraging private sector participation and women’s empowerment,
Mashaat said in a statement.
Two deals have been sealed with the German government, under which
Berlin is to offer Cairo a grant worth 57.5 million euros to fund ventures in
the fields of energy, technical education, vocational training, administrative
reform and sanitation, the minister said.
Such financial cooperation agreements are meant to help achieve the
sustainable development goals, including good education, gender equality,
suitable jobs, industry and infrastructure, as well as peace and justice, the
minister noted.
She added that 10 other contracts have been signed with the German
Corporation for International Cooperation (GIZ) in the form of grants: 4
million euros to be offered to the Sports Ministry, 14 million euros to be
offered to the Trade and Industry Ministry, and 8 million euros to build
institutional potentials.
Three other grants worth 14.5 million euros, 14.9 million euros and 16
million euros will be offered to the Education Ministry.
One of the GIZ contracts also offers grants worth 6 million euros and
7 million euros to the Environment Ministry and Agriculture Ministry
respectively.
The Financial Regulatory Authority (FRA) should also receive a GIZ grant
worth 10 million euros, while the Housing Ministry is set to get 3.5 million
euros from the same corporation.
July-August 2021
8 www.BusinessTodayEgypt.com
In Brief Egypt
Egypt’s agricultural exports rise to
$2.2B in 10 months
Egypt’s exports of agricultural crops increased during the first
10 months of the 2021/2020 export season, recording about
$2.215 billion, compared to $2.013 billion during the same period
of the 2020/2019 season, marking a 10 percent increase.
The report issued by the Agricultural Export Council showed
an increase in the total quantities exported from the sector during
the period from September 2020 to June 2021, recording about
3.971 million tons, compared to 3.755 million tons during the
same period from 2019/2020, increasing by 5.7 percent.
Regarding the most important geographical blocs importing
Egyptian agricultural crops, the report indicated that “Arab
countries” acquired 33% of the value of Egypt’s exports during
the first 10 months of the export season 2021/2020, at about $741
million, as well as by 41 percent of the total volume of exports
by about 1.614 million tons during that period from the previous
season.
The exported quantities of Egyptian agricultural crops to
“European countries outside the European Union” recorded
about 1.008 million tons, valued at 570 million dollars, accounting
for 26% of the total value of exports.
Egypt’s annual inflation
records 6.1% during July,
rises 1% monthly
Egypt’s annual consumer price inflation
recorded 6.1% in July 2021, compared to
4.6%in July 2020 and 5.3% in June 2021,
state-statistics body said.
On a monthly basis, inflation recorded
114.4 points in July 2021, marking an
increase of 1% compared to July 2021, the
Central Agency for Public Mobilization
and Statistics (CAPMAS) said.
CAPMAS attributed the rise in inflation
to the increase in the prices of the group of
the dairy, cheese and eggs group by 2.2%,
the meat and pourtly group by 1.2%, the
vegetables group by 1.1%, and tobacco by
1.7%.
It also referred to the increase in the
group of electricity, gas and other fuel
materials by 8.9%, organized tourism trips
by 6.9%, and personal care group by 1.2%.
The agency indicated that this rise
despite the decrease in the prices of fruits
group by 3.4%.
Egypt’s annual core inflation
records 4.6% in July:
CBE
Annual core inflation rate recorded
4.6% in July 2021, compared to 3.8% in
June 2021, the Central Bank of Egypt
(CBE) said in a statement.
The Consumer Price Index in Egypt
recorded a monthly rate of 0.6% in July,
compared to -0.1% for the same month
last year, and to 0.1% in June 2021, the
statement added.
Core inflation discounts or strips out
certain categories that are considered
more volatile.
www.BusinessTodayEgypt.com
July-August 2021
9
Infographic
Mena Data Response
Egypt Consumer Prices
(Jul.)
The CBE will keep rates on hold for now, as inflation moves back
within targets.
By James Swanston, MENA Economist
Egypt’s headline inflation rate rose to
an eight-month high in July, and is
likely to drift higher in the upcoming
months. Against this backdrop,
we think the Central Bank of Egypt (CBE)
will keep interest rates on hold for much of
this year despite the weakness of the economy.
•The headline rate – covering only urban
consumers – rose from 4.9% y/y in June to
5.4% y/y last month, the strongest rate of inflation
since November and is now back within
the CBE’s target range of 7±2%. (See Chart
1.) On a month-on-month basis, which tends
to be volatile due to seasonal effects, prices
rose by 0.9% – the sixth consecutive monthly
increase in prices.
•The breakdown of the data showed that
most of the rise in the headline rate was due
to a further jump in food inflation, from 3.4%
y/y in June to 4.9% y/y in July. Non-food inflation
remained unchanged, though housing
and utilities, clothing, and recreation and culture
prices picked up as a sign of re-opening.
–The latter is likely due to a sharp rise in
package holiday prices. (See Table 1.)
•We expect that the headline rate will continue
to increase in the coming months on
the back of stronger food and energy inflation.
The hike to local fuel prices at the end of
July and the expected hike to state-subsidised
bread prices will push up inflation. Global factors,
such as higher global commodity prices,
supply shortages and higher freight costs will
also add to price pressures.
•Additionally, we think that the pound is
likely to weaken gradually, which will push
up inflation of imported goods. Our forecast
is that the headline rate will peak at around
6.7% y/y in September. Against this backdrop,
policymakers at the CBE will probably
opt to keep interest rates on hold for much
of this year.
•However, we think that in the final few
months of the year inflation will fall back below
the lower bound of the CBE’s target and
July-August 2021
10 www.BusinessTodayEgypt.com
Infographic
hover around that level over 2022-23. That
should open the door for policymakers to
reduce the policy rates and we think there’s
scope to do so given how high real interest
rates are. We expect the overnight rate to be
reduced late this year, with a total of 150bp
of cuts by the end of next year (taking it to
6.75%). Most analysts don’t expect any change
in interest rates during this period.
www.BusinessTodayEgypt.com
July-August 2021
11
In Brief Egypt
Egypt to offer Administrative Capital for Urban Development on
EGX within 2 years
Egypt has a plan to put the Administrative Capital
for Urban Development (ACUD) on the stock
exchange in the upcoming period, according to the
Egyptian President Abdel Fattah El-Sisi.
This came during his speech at the opening of a
number of residential projects in Badr City.
Sisi said: “We will offer the company on the stock
exchange at the earliest opportunity. The solvency in
the company’s fund is LE 100 billion. We are talking
about liquid funds amounting to LE 100 billion for
the Administrative Capital Company.”
“This is another pure idea to manage our
capabilities and resources, and the state will not
pay a penny, and I imagine that during the next
two years, after it was put on the stock exchange,
the company’s assets exceed LE 3 and 4 trillion,
and this applies to El Alamein and other cities,” he
continued.
Egypt’s trade deficit increases 10% to $3.34B in May
Egypt’s trade deficit rose 10% in May 2021, recording
$3.34 billion, compared to $3.04 billion in the same month
of 2020, according to the state’s statistics agency CAPMAS.
In its monthly bulletin on foreign trade data, CAPMAS
said exports hiked 80.3% to reach $3.11 billion in May
2021, compared to $1.72 billion during the same month
of 2020.
The bulletin attributed the increased exports to the rise in
the exports of various commodities, such as: plastics in their
primary forms by 96.6%, pasta and various food preparations
by 81.4%, and fresh fruits by 70.9%.
Meanwhile, exports of other commodities witnessed a
decrease in May, such as: fertilizer by 48.1 %, dairy products
by 29.2%, furniture by 19.8% , and perfumes and cosmetics
by 9.4% .
Moreover, the bulletin showed an increase of 35.4% in
the imports to hit $6.45 billion in May of 2021, compared to
$4.76 billion in the same month of 2020.
July-August 2021
12 www.BusinessTodayEgypt.com
In Brief Egypt
Egypt offers LE 2.8B in financing for small and micro projects in 6
months
The Medium, Small and Micro Enterprise Development
Agency (MSMEDA) financed 87.7 thousand small and micro
projects in the first half of 2021 (from January to June) with a
total of LE 2.8 billion, which created about 146.5 thousand job
opportunities, according to CEO of the Agency Nevine Gamea.
Gamea added in a statement that young people in the 30-40
age group received up to 36 percent of this funding, and the
governorates of Upper Egypt benefited with more than 43
percent of the funding.
She stressed that the agency works in constant coordination
with the concerned authorities to implement the political
leadership’s directives by providing all aspects of support to
the small enterprise sector and providing the appropriate
environment to encourage citizens to engage in self-employment
and establish new small projects that contribute to the local
market’s needs for various services and products, thereby
contributing to reduced imports and supporting the national
economy, and providing thousands of job opportunities.
Egypt’s treasury bears LE 73.3M as part of vehicle replacement initiative
Egypt’s Minister of Finance, Mohamed Maait, said
that the state treasury bore LE 73.3 million in value
of the green incentive from April to the end of July
2021, given the presidential initiative to replace aging
vehicles with new cars powered by natural gas.
The minister indicated in a statement that 3,000
citizens have acquired their new cars since the start of
delivery in April to the end of July 2021.
The Egyptian Ministry of Finance revealed that 1,700
new cars were delivered to the presidential initiative’s
beneficiaries to replace aging cars with natural gas
during August 2021.
Chairman of the Board of Directors of the Vehicle
Replacement Fund at the Ministry of Finance, and
Executive Director of the initiative to replace aging
cars with new ones powered by natural gas, Amgad
Mounir confirmed that 3,472 old cars were scrapped
so far.
www.BusinessTodayEgypt.com
July-August 2021
13
Infographic
MENA Data Response
Saudi Arabia GDP
(Q2, Flash Estimate)
Recovery picking up the pace.
By James Swanston, MENA Economist
The 1.1% q-on-q expansion in Saudi
Arabia’s GDP in Q2 was driven by
the unwinding of the voluntary oil
output cuts and the easing of virusrelated
restrictions supported domestic activity.
With the OPEC+ impasse now resolved oil
production will be raised further and remaining
virus restrictions are being relaxed, the
economic recovery looks set gather pace over
the second half of the year.
•The General Authority for Statistics (GAS)
released its flash estimate of GDP this morning,
which showed that, following a 0.5% contraction
in Q1, the Saudi economy expanded
by 1.1% q/q in seasonally adjusted terms in
Q2 (this was slightly weaker than our forecast
of a 2.1% q/q expansion). That put real GDP
1.5% above its level from a year earlier. (See
Chart 1.) The flash estimate is subject to revision
and a final reading will be published on
13th September.
•The breakdown showed that both the oil
and non-oil sectors expanded last quarter. The
oil sector grew by 2.5% q/q as the Kingdom began
to unwind the voluntary 1mn bpd output
cut that lasted from February to April. And in
the non-oil private sector, output expanded by
1.3% q/q, leaving it 10.1% higher than a year
ago. (See Table 1.) This was helped by the accelerating
COVID-19 vaccine rollout and the
easing of restrictions last quarter.
•More timely data and developments point
to a strong start to Q3. High frequency point
of sales transaction data and consumer confidence
data for July remained very strong.
Meanwhile, the Kingdom’s vaccination rollout
has ramped up with more half of the population
having received at least their first dose, the
majority of whom have been fully vaccinated.
This has recently paved the way for a further
easing of containment measures, particularly in
the tourism sector.
July-August 2021
14 www.BusinessTodayEgypt.com
Infographic
•What’s more, the end of the OPEC+ impasse
last month saw an agreement to raise output
quotas from August. This will support a further
recovery in the oil sector over the rest of this
year and next.
•Overall, while the Q2 GDP figures were a little
weaker than we had expected, they still paint
a positive picture: that the economic recovery
is gathering momentum. And it should pick up
the pace over the second half of this year. We
have pencilled in GDP growth of 4.8% this year
and 6.3% in 2022. This is much stronger than
the consensus forecasts for growth of 2.4% and
4.6% respectively.
No.1 TV Brand in Japan [Sharp] launches Optimum Luxury TV Screens in Egypt
For 16 years in a row, Sharp has been the No.1 TV brand
in Japan*; maintaining its global position as the top TV
manufacturer around the world. This Japanese brand
takes specifications seriously; whether in quality or technology;
while still owning luxurious, modern, and aesthetic designs.
Always keen on granting full comfort and pleasure to its
customers, Sharp just launched its DL6EX Series of frameless
Android TVs, which boast exclusive features; that are available
for the first time in Egypt!
Ezz Eldin Ahmed - Marketing Management Director
of Elaraby Group - reveals those features to
be: The Far-Field Voice Control which enables direct
orders to the TV set through Google Assistant
without the need to use the remote control. This series
of Sharp Android TVs uses the latest Android
version; Android 10, which is perfectly compatible
with Google; enabling the installation of +10,000
applications; including games and other entertainment
apps.
This is made possible through a 32-Giga internal
memory; making it the smart TV set with the highest
internal memory available now in Egypt. Ezz
also states that Google’s own Chromecast built-in
feature in this TV series enables the sharing of all apps, videos,
and games between the mobile phone, tablet, or any other device
and the TV screen; easily and smoothly.
The resolution of the screens is 3,840 X 2,160; which is more
than 8 million pixels, while being optimized with the 4K Ultra
HD technology. This means that the quality of the screens is
4 times higher than the full HD. It’s an amazing feature that
even the series is referred to as “Sharp 4K Android TVs”
through its 3 models of 50, 55, and 65 inches [4T-C50DL6EX,
4T-C55DL6EX and 4T-C65DL6EX]. The Dolby Vision feature,
also in this series; is the latest technology used in movie
production around the world. It features 68 billion colors, with
even extra control over contrast, and lighting - to apply any
edits if needed.
The Dolby Atmos feature in the Sharp 4K Android TVs,
on the other hand, creates an atmosphere that is
fully-loaded with sound; just like being in a movie
theater, without the need to install any other
gadgets other than the TV set. This technology exceeds
all previous TV sound systems by sending
out 128 whole sound waves simultaneously, and in
all directions.
Through the years, Sharp has built its reputation
in Egypt as a home appliance brand of top performance;
granting an exclusive 3-year warranty
through Elaraby Group. These long-term special
corporate relations between Sharp, in Japan, and
Elaraby Group, here in Egypt, has indeed resulted
in several consecutive successes and a real leap in
the local market of home appliances in Egypt.
Previously through air conditioners, refrigerators, home
freezers, and now TV screens, this new deal will definitely set
Egypt at a remarkable position in the markets of manufacturing,
distributing, and marketing for Japanese Sharp TV screens.
In this quest, Sharp and Elaraby Group promise to continue
developing new integrated investments for even more market
expansions in the near future.
www.BusinessTodayEgypt.com
July-August 2021
15
In Brief Egypt
Fitch Affirms NBE’s rating at ‘B+’;
with stable outlook
Egypt, Japan sign agreement to increase JICA grant to $19M to promote health sector
Egypt and Japan signed an agreement to increase
the value of the Japan International Cooperation
Agency (JICA) grant to $19 million.
The agreement aims to construct a new outpatient
clinic at Abu al-Rish Japanese Hospital, coming
within the framework of distinguished Egyptian-
Japanese ties promoting the health sector’s
development.
The signing ceremony was attended by Minister of
International Cooperation Rania al-Mashat, and Dr.
Khaled Abdel Ghaffar, Minister of Higher Education
and Scientific Research, who signed the agreement.
Ambassador Noki Masaki, the Ambassador of
Japan in Cairo, and Yoshifumi Omura, the main
representative of the JICA office in Cairo, were
present.
Fitch Ratings affirmed the National Bank of Egypt’s
(NBE) Long-Term (LT) Issuer Default Rating (IDR) at ‘B+’
with a Stable Outlook.
Fitch has also affirmed National Bank of Egypt (UK) Ltd’s
(NBEUK) Long-Term IDR at ‘B+’ with Stable Outlook and
Support Rating at ‘4’. NBEUK is a wholly owned subsidiary
of NBE. A full list of rating actions is below.
Fitch stated that pressures on the domestic operating
environment have eased since end-3Q20, moderating
downside risks to Egyptian banks’ credit profiles. “This
reflects improving foreign-currency (FC) liquidity, with the
banking sector’s net foreign assets (NFAs) reaching $3.5
billion at end-April 2021 from a net foreign liability position
of $5.3 billion at end-April 2020. This was supported by a
strong increase in foreign holdings of Egyptian treasuries,
sovereign Eurobond issuance and resilient remittances.”
Its view also factors in healthy growth momentum, with
real GDP growth expected to accelerate to 6% in fiscal
year 2022 (3% in FY21), in line with pre-pandemic levels.
The sector’s average loan growth was 6% in 1Q21, which
we expect to accelerate to low double digits in 2021.
According to the rating agency, deterioration in loan
quality following the expiry of the Central Bank of Egypt’s
(CBE) six-month credit moratoria in September 2020 has
largely been contained. The sector average stage 3 (S3)
loans ratio remained stable at 3.4% at end-3Q20. The stage
2 (S2) loans ratio varied significantly across banks, ranging
from 2 percent to more than 30 percent of total loans.
In Fitch’s opinion, the higher portion of S2 loans for
some banks is an indication of more conservative loan
classifications rather than weaker underlying asset quality.
Banks’ asset quality is also underpinned by high exposure
to the sovereign, including investments in bonds and
lending to public-sector entities.
16 July-August 2021
www.BusinessTodayEgypt.com
In Brief Egypt
EGX launches its Treasury Bonds Index
The Egyptian Exchange (EGX) launched its Treasury Bonds
Index on August 3, after the adoption of its methodology by
the Indices Committee.
The EGX clarified that the new index is to complement its
efforts of developing indicators to measure the performance
of securities traded. This is done in accordance with
international best practices, for the first time in the Egyptian
exchange’s history.
EGX’s indices have been designed to include bonds with
sufficient liquidity, reliable pricing as well as complete and
easily monitored terms. The EGX Treasury Bond Index
measures the market-value-weighted performance of local
currency Treasury bond markets.
The Treasury bond index comprises four sub-indices to be
launched shortly and are determined based on maturities.
The sub-indices allow investors to compare the performance
of Treasury bonds with close maturities. The Treasury Bonds
index is reviewed monthly. The review includes the exclusion
of ineligible bonds and the inclusion of bonds that meet
the criteria for joining, ensuring good representation of the
Egyptian bond market. Treasury bond indices were calculated
starting from January 3, 2021 with a value of 1000 points.
Egypt’s stock market develops new methodology for calculating shares’
closing price
The Board of Directors of the Egyptian Stock Exchange
(EGX) has activated full amendments to the Egyptian Stock
Exchange’s trading systems, related to the foundations and
its determinants of calculating shares’ closing prices, to be
implemented early next September.
The new methodology for calculating the intraday closing
price of shares is based on the 30-minute time-moving
“Moving VWAP” weighted average.
This is in lieu of the current method of weighted average
volumes over the duration of the daily trading session.
The new methodology also includes the creation of an
auction session to determine the pre-close auction’s closing
price before the end of the trading session and within the last
half an hour, provided that the stock exchange administration
sets the date of the auction session during the next week.
Moreover, if the auction session results in a new closing
Kuwaiti “Zain” invests $10M in merger of Swvl, Queens Gambit
Mobile Communications Company Zain announced that
it will invest $10 million in the recent merger of Swvl and
Queens Gambit, amounting to approximately 3 million
Kuwaiti dinars.
Zain said in a statement to the Kuwaiti Stock Exchange,
that Swvl and Queens Gambit entered into an agreement
to merge the business to become through Swvl, the first
company in the Middle East with an estimated value of more
than $1 billion to be listed on the Nasdaq Stock Exchange.
price, ownership transfers are allowed for a period
determined by the stock exchange before half past two and
after the auction session on the closing price resulting from
the auction session; this is called “Trade-at-close”.
In the event that the bidding session does not achieve a
new closing price, the transfer of ownership will be allowed
at the last “Moving VWAP” price during the Trade-at-close
session.
The amendments to shares’ closing price also included
unifying the daily rate of listed securities’ prices to be
throughout the entire day in entire sessions combined, which
includes the pre-opening auction session, the continuous
trading session and the auction session determining the
closing price as 20% throughout the entire day, which is the
last of the precautionary procedures applied after the 2011
revolution.
Dubai-based Swvl is the owner of an innovative and
sustainable mass transit platform, while Queens Gambit is
a special purpose acquisition company.
The Egyptian company Swvl was established by Mostafa
Kandil in 2017, as a smart service for mass bus transportation
in Egypt, and then expanded to reach other markets in the
region, and is headquartered in Dubai, while the company
plans to merge with Queens Gambit Growth Capital in a
deal to raise the company’s value to about $ 1.5 billion.
www.BusinessTodayEgypt.com
July-August 2021
17
News in Focus
Egypt’s Plastic
Currency on its Way
Egypt revealed the first pictures of its upcoming plastic LE 10 and
LE 20 notes.
By Hanan Mohamed
In early August, Egypt revealed the first pictures
of its soon-to-launch LE 10 and LE 20
plastic notes. The design of the published
plastic notes, slated for release next November
from the Central Bank of Egypt in the New
18 July-August 2021
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News in Focus
Administrative Capital’s new printing press, has
yet to be edited.
Sources confirm to Business Today Egypt that
the new currency will be carried out in alignment
with the world’s latest currency production lines
and with the latest insurance specifications at the
international level. The new LE10 and LE20 plastic
notes will be circulated alongside current currency
notes.
Banknotes are printed according to an economic
calculation process that considers the rate
of the rise in prices of goods and services produced
within the country, the inflation rate, and the rate
of achieved economic growth. They are printed
based on the volume of cash circulating within the
Egyptian economy.
The money issued by the Central Bank enjoys
what is called “the power of discharge” in the sense
that it is equal in value to goods and services, and
it is obligatory for all parties to pay the monetary
category’s value. When the Central Bank issues a
new edition with a different design, the old version
of the monetary category does not stop.
The design of the plastic notes
The 10-pound note’s new design carries a picture
of the New Administrative Capital’s Al-Fattah
Al-Alim Mosque, which was inaugurated in 2019.
The 20-pound one has a picture of the Mosque of
Mohamed Ali, one of the important and famous
archaeological mosques in Cairo, established by
Muhammad Ali Pasha.
More than 30 countries use plastic currencies, including
Britain, Canada, Fiji, Vietnam, Mauritius,
New Guinea, New Zealand, Australia, Romania,
Brunei, Nigeria, United Kingdom, Cape Verde,
Chile, Gambia, Nicaragua, Trinidad and Tobago.
Plastic currencies are produced from polymer,
and were first used as currency-making material
in Australia in 1988. In 1968, Australia began researching
for a scientific solution to combat forgeries
of the new decimal currency after it issued
its $10 notes in 1966. The state spent 10 years in
trials to overcome technical problems. In 1996,
Securency International was formed as a joint venture
between the Reserve Bank of Australia (RBA)
and Innovia Films to market the technology.
“By 1998, all Australian banknotes were issued in
plastic and by 2009 Securency was exporting to 25
countries, with more than 3 billion polymer notes
in circulation,” notes CSIROpedia.
The Bank of England argues polymer is cleaner
and more durable than other currency-comprising
materials, and it allows the addition of extra security
features. Polymer reportedly is about 2.5 times
longer than paper notes, and takes longer to biodegrade.
A Bank of Canada study revealed that at the end
of the lifecycle of paper money, it is usually torn
and transported to the landfill. The polymer sheets
extracted from the circulation are chopped into
granules and used to manufacture everyday plastics,
such as garden furniture.
As for Egyptian currency, experts expect that
a transition to plastic currency will reflect a new
economic image for Egypt, and this will positively
reflect on the Egyptian economy.
“Printing the new currency from the new administrative
capital gives a message that Egypt will start
a new economic era bringing prosperity and economic
welfare to all Egyptians,” Economic Expert
Shimaa Emara previously explained in a statement
to BT. “This currency has a lot of benefits, such as
a longer lifespan than the paper one, its printing
cost is less than the paper one and it is considerably
difficult to fake.”
Emara noted that many countries have been using
plastic currency for decades, like Spain, France,
and the UK.
www.BusinessTodayEgypt.com July-August 2021
19
News in Focus
Senior economist
at League of Arab States
Mahmoud Fathallah agrees with
Emara, saying that the decision of issuing
plastic banknotes in Egypt is a very good choice
economically.
Fathallah tells BT that Egypt is one of the highmonetizing
countries strongly depending on cash
transactions, so the level of daily cash circulation is
very high. “Cost wise, regular paper banknotes cost
a lot because they need to be replaced after a short
period of time, that’s why the issuance of coins was
intended to reduce the rate of erosion even if the
cost of making coins is high.”
On the other hand, Senior Economist Esraa
Ahmed believes that manufacturing plastic currency
is a good move towards a more efficient
money issuance system, but no major economic
impact will take place. “Switching from manufacturing
the Egyptian pound using copper, steel
and other materials to using polymer banknotes
is a matter of efficiency rather than an ‘economic’
move, and they are widely used worldwide
[Canada, Vietnam, New Zealand and others use
Polymer banknotes, and other countries will join
them soon.] It is all about more efficient coins,
as they are more durable and less costly when
it comes to issuance feasibility and the material
used. Using conventional copper and other relatively
expensive materials proves inefficient, especially
after the high level of cumulative inflation
that caused the value of the coin material to exceed
the value of its denomination,” Ahmed says.
The origin of the Egyptian Pound
Money has been made from a variety of materials
over the years , be it leather in China during the
Han Dynasty, or shells, precious metals, cotton paper,
and most recently, plastic. The materials
reflect the social and political climate of the time
as well as available technologies and resources, according
to Ping Wang, the Communications Officer
at the IMF’s Communications Department.
Egypt used gold and silver coins until 1834,
when the Egyptian pound appeared. Before 1834,
there was no specific monetary unit that served as
the basis of the monetary system, and only a small
number of currencies were seized.
The Egyptian pound was formed as a currency to
be dealt with in paper form for the first time after
its formation and circulation in 1834. On April 3,
1899, the National Bank of Egypt issued banknotes
for the first time in Egypt, with a camel design and
the name of the bank inscribed on one side.
The Egyptian pound’s design has changed several
times since its inception, as in 1930 when it
changed from its previous orange color to blue
and brown, with a picture of the Sphinx on its front
and a mosque on its back. In 1950, the pound was
redesigned to have an image of King Farouk l on
the front and with a picture of the Isis temple in
Aswan on the back, but this did not last long until
a new version appeared in May 1952, returning to
the old face under King Fouad while retaining Isis
Temple on the other side.
The pound’s shape developed in 1968 to carry
an image of the Sultan Qaytbay Mosque on one
side and the Temple of Abu Simbel on the other
side. Eleven years later, in 1979, it became the currently
known paper, but with changes in color and
decorations of Qaitbay Mosque on the front, while
the other side carries a different image from the
Temple of Abu Simbel.
In a new transformation of the pound, the Egyptian
government converted the paper pound to a
metal pound in 2006.
20 July-August 2021
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News in Focus
Fitch is positive
on the EGP
Egyptian Pound to Remain Stable in H221, slightly depreciating in
2022.
over the Grand Ethiopian Renaissance Dam, and
faster-than-expect global monetary tightening.
At Fitch Solutions, we believe the Egyptian
pound will continue trading in
a narrow range between EGP15.50/
USD and EGP15.80/USD in the short
term, as the Central Bank of Egypt (CBE) will
continue to intervene in the currency market to
offset mild appreciatory pressures.
Over the long term, we expect a pick-up in inflation
will lead to narrowing real rates, putting
a gradual depreciation pressure on the pound,
which we forecast will average EGP16.10/USD
in 2022.
We see moderate downside risks to our forecast
from monetary easing in Egypt in the event
of a sluggish economic recovery and lower-thanexpected
inflation, as well as from the intensification
of tensions between Egypt and Ethiopia
Short-Term Outlook (three-to-six months)
We at Fitch Solutions expect the Egyptian
pound will remain stable in the short term. The
recent stability of the pound came despite the
rebound in portfolio inflows, strong remittance
inflows, a modest recovery in tourism activity, and
access to IMF funding. Indeed, the Central Bank
of Egypt (CBE) has been active in building up foreign
currency reserves, with the exchange rate’s
stability reflecting proactive market interventions
by the CBE. We expect this trend to continue over
the short term, as the CBE intervenes to offset appreciatory
pressure on the currency.
From a technical perspective, we expect the
Egyptian pound will continue to trade between
EGP15.50/USD and EGP15.80/USD for the remainder
of 2021, as has been the case since September
2020 (see chart above). Indeed, positive
bullish fundamentals supporting the currency
will be offset by CBE’s build-up of FX reserves.
We also expect that portfolio inflows to Egypt
Fitch Solutions Egypt Currency Forecast
22 July-August 2021
www.BusinessTodayEgypt.com
News in Focus
will remain strong in the short term due to elevated
real interest rates, exerting upside pressure
on the pound. Egypt continues to boast the highest
real policy rate globally (3.3% in June), which
along with favourable macroeconomic conditions
in the country, will preserve the appeal of
Egyptian debt instruments to foreign investors.
We expect real interest rates in Egypt to remain
elevated over our forecasted period as we anticipate
that the CBE will keep monetary policy on
hold throughout 2022, while inflation remains
within the CBE’s target band of 7.0%±2.0 percentage
points.
Additionally, remittances, a gradual recovery
in tourism inflows and access to IMF funding
will provide support to the currency. Remittance
inflows to Egypt continued to rise throughout
the pandemic, as they increased by 10.4% in
FY2019/20 (July 2019-June 2020), and by an estimated
10% in FY2020/21. We expect transfers
Egyptian Pound To continue Trading Within
Narrow Range In Short Term
Egypt - EGP/USD Daily
Source: Bloomberg, Fitch Solutions
www.BusinessTodayEgypt.com July-August 2021
23
News in Focus
Egypt’s Real Rates Continue To Outperform Peers
Selected Markets – Real Interest Rates, %
Source: Fitch Solutions
from Egyptians living overseas to remain strong
in 2021 and 2022, supported by an economic recovery
in key remitting countries, specifically in
the Gulf Cooperation Council. We also foresee
a gradual rebound in the tourism sector, largely
due to advancement in vaccine rollouts in Europe,
a key source of tourists for Egypt, as well
Egypt’s Real Rates Continue To Outperform Peers
Selected Markets – Real Interest Rates, %
as the resumption of chartered flights with Russia.
In addition, we anticipate that Egypt will receive
about USD2.8bn under the IMF’s initiative
to help member countries meet their financing
needs. Combined, these factors will bolster foreign
currency inflows to Egypt.
That said, we believe that the pound’s appreciation
will be contained, as the CBE continues
to intervene in the forex market in the
short term. The CBE has been active
in building up reserves, with Egypt’s
foreign currency reserves gradually recovering
from USD36.0bn in May 2020
to USD40.6bn in June 2021. While
we continue to believe the CBE will
prevent a stronger appreciation beyond
EGP15.50/USD, a breach of this
level of resistance would likely push
the pound to trade stronger towards
EGP15.25/USD.
Long-Term Outlook (six-to-24 months)
We maintain our view that the pound
will gradually depreciate in the long
term, averaging EGP16.10/USD in
2022 largely on the back of higher inflation.
We forecast inflation will average
6.6% in 2022 (up from an average
Source: CBE, Fitch Solutions of 5.10% in 2021) largely due to strong
domestic demand and increased electricity
prices amid subsidy cuts. In addition,
Egypt’s structural twin deficits and
elevated public debt level will limit the appeal of
24 July-August 2021
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News in Focus
CBE’s Interventions Preserving Exchange Rate Stability
Egypt - EGP/USD & Gross Official Reserves, USDbn
Source: CBE, Bloomberg, Fitch Solutions
Egyptian assets in the long term.
That said, we believe the depreciation of
the pound will be modest, as several positive
factors will limit downside pressure. First,
we believe that Egypt’s high nominal interest
rates can accommodate the anticipated
gradual increase in inflation without significantly
undermining the attractiveness of the
pound, with real interest rates remaining elevated.
Second, we expect authorities to continue
their fiscal consolidation measures in
FY2021/22 to narrow the wide fiscal deficit
that averaged 8.6% of GDP in the past five
years. Efforts to reduce public finance imbalances
would help to support the attractiveness
of Egyptian assets. Moreover, we believe
that the CBE’s buildup in foreign currency
reserves allow for a gradual and measured
weakening of the currency. Third, the upcoming
integration of Egypt into JP Morgan’s
Government Bond Index Emerging
Markets will boost demand for Egyptian assets.
JP Morgan is supposed to include Egypt
in the index within six months after the announcement
on April 9, 2021. This move would
likely spur demand for Egyptian debt instruments
denominated in local currency, adding appreciatory
pressure on the EGP.
Risks To Outlook
We see some downside risks to our outlook for
the Egyptian pound in the long term. A slowerthan-expected
recovery in economic activity and
weaker inflation in 2022 could prompt the CBE
Higher Inflation To Weigh On The Pound
Egypt - EGP/USD & CPI, y-o-y
to ease monetary policy, which would reduce real
rates and could accelerate the depreciation of
the pound. In addition, more pronounced tensions
between Egypt and Ethiopia on the Grand
Ethiopian Renaissance Dam could increase the
country’s risk premium and exert downward
pressure on the currency. Furthermore, a fasterthan-expected
global monetary tightening cycle
could lead to capital outflows from emerging
markets, including Egypt, resulting in a weaker
pound.
Source: Bloomberg, CBE, Fitch Solutions
www.BusinessTodayEgypt.com July-August 2021
25
News in Focus
Spotlight on Egypt’s
Unified Public Finance Law
Business Today Egypt speaks with Akmal Nagaty, Secretary of the
Senate Financial and Economic Affairs Committee, to understand
the bill and its prospective returns.
By Hanan Mohamed
The Senate approved, in the beginning
of July’s plenary session, the unified
public finance bill, which holds much
promise for the Egyptian economy.
Business Today Egypt speaks with Akmal Nagaty,
Secretary of the Senate Financial and Economic
Affairs Committee and a member of the
Coordination of Youth of Parties and Politicians,
to understand the bill and the returns it achieves.
The draft law is in line with the new Egyptian
constitution, achieving Egypt’s strategy for sustainable
development (Egypt Vision 2030) and
taking into account international practices, as it
integrates the state budget law and the government
accounting law into a unified law, according
to Nagaty.
The draft law also comes within the framework
of the state’s move for legislative reform, working
to improve the Egyptian economy, and in
light of changes in the general budget, as well as
international institutions’ recommendations on
developing financial performance.
What is the unified public finance bill passed by
the Senate?
It is a legislative development merging the
“General Budget Law (Law No. 53 of 1973 regarding
the State’s General Budget)” and Law
26 July-August 2021
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News in Focus
No. 127 of 1981 on government accounting.
What are the motives for drafting a unified public
finance bill?
There are many practices that were not mentioned
in the previous laws, such as budgetary
frameworks, financial planning, and the “Programs
and Performance” budget. Also, numerous
articles in the two laws come under the same
content, and elicit the same meaning, reflecting
a lack of interconnection between their texts.
This is evident in the application of the electronic
budget linking preparation with implementation,
and reflects the urgent need to formulate a
unified public finance law.
What is newly provided by the Unified Finance
Act?
The Act aims to achieve sufficient flexibility
in implementing the budget, and to maintain
financial allocations by reusing them in consequent
years if circumstances prevent them from
being spent during the “accreditation year” in
accordance with governing controls.
Also, the new draft law’s objectives include
investing in top cadres, acting in the financial
management of ministries and administrative
authorities, as its officials are required to have
adequate qualifications and continuous training
to ensure quality financial performance. We also
need to improve our capacity to digitize, raising
the level of human capabilities in the financial
system in line with digital changes, relying on
managing the financial system through modern
digital technology.
The law also achieves high levels of transparency
and disclosure in preparation, implementation
and control, through automation and the
use of electronic signature systems.
It also aims to apply the program and performance
budget as a means of controlling and rationalizing
public spending, consolidating the
concepts of accountability.
(GDP), especially seeing the positive expectations
for the Egyptian economy.
The project implementing the program and
performance budget is considered a means of
controlling and rationalizing public spending
and consolidating accounting and accountability.
How will the new law help the Egyptian economy?
The new law contributes to transparency and
disclosure of state resources, thereby increasing
control on growth rates in accordance with the
sustainable development plan, which contributes
to increasing the rates of the national product
and other economic institutions. Additionally,
it contributes to increasing the added value
of available resources and their optimal use.
What are the goals that the law aspires to achieve?
The draft law defines the divisions the state’s
general budget functions, and the divisions of its
resources, as well as the rules for implementing
the budget, provisions for disbursement and collection,
and rules for financial control and internal
control. Further, the budget includes, on the
side of uses, the expenses evident in six chapters
as mentioned in the draft law, in addition to the
acquisition of financial assets and loan repay-
What is the importance of approving this law
during Egypt’s current phase?
The new law aims to achieve sufficient flexibility
in budget implementation, and to maintain
financial allocations by reusing them in the following
years if circumstances prevent spending
them during the “accreditation year” in accordance
with governing controls. Also, the new
draft’s law will seriously upgrade the digitization
processes in government institutions and ministries.
The law aims to reduce the deficit in the state’s
general budget and the gross domestic product
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27
News in Focus
ments. On the resource side, it became clear
that revenues, spanning three chapters, in addition
to funding sources, include two chapters
detailed in the bill.
Regarding the classification of government
accounts, the draft law classified these accounts
into those of uses and resources, accounts of assets
and liabilities, and regular accounts. These
accounts are classified according to the divisions
in the state’s general budget, and the government
financial statistics manual. The executive
regulations specify the types of accounts at the
overall and detailed levels.
The draft law clarifies the Ministry of Planning’s
role in defining the state’s strategic goals
in all its sectors in the annual budget and the
medium-term framework budget, in coordination
with the ministries and independent bodies,
defining priorities to implement those goals,
and presenting them to the Council of Ministers
for approval in light of the controls, rules and
provisions in the state’s general planning law.
The draft law indicated that the Ministry of
Finance is preparing the state’s general draft
budget and projects economic bodies’ budgets.
This happens after studying the draft budgets
received from the administrative authorities,
seeking the Central Bank’s opinion regarding
coordination between each of the financial,
monetary and credit policies in order to achieve
the economic and social development plan’s
objectives. The draft law also clarified the right
to access the studies, research and information
necessary to prepare the state’s draft general
budget.
How does this law achieve the state’s plan for reform
and sustainable development?
Under the state’s directives for legislative reform
and the elimination of duplication and
conflict of legislation, in order to improve the
Egyptian economy, and in light of the changes
that occurred in the pattern of preparing the
general budget, as well as the recommendations
of international institutions regarding the
development of financial performance, including
the development of the budget preparation
and control system, strategic planning and
technological developments in the mechanization
of budget performance, and the existing
constitutional and legal legislation, the unified
public finance law was drafted, which came in
line with the new Egyptian constitution, and
achieved the objectives of Egypt’s strategy for
sustainable development (Egypt Vision 2030),
taking into account international practices,
where the philosophy of the draft unified public
finance law is determined in the general
framework of controlling the financial system
and good management.
What is the improvement or tangible return on
28 July-August 2021
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News in Focus
citizens from the application of this law?
The speed of completion of set plans and
implementation of projects according to announced
time schedules, makes it easy for the
regulatory and parliamentary authorities to follow
up on performance and evaluate the ministry
entrusted with the implementation of any
program.
It was announced that this law helps set a future
vision for the administrative authorities’ financial
improvement. How is this done?
The appropriations for each body included in
the budget are immediately used upon issuing
the law, and each party is responsible for taking
the necessary measures to implement its budget
and achieve the strategic objectives it sets.
The draft law was clarified in Chapter Four,
holding 12 articles spanning financial control
and internal control of administrative bodies’
accounts.
The draft law in Chapter Five included 7 articles,
and dealt with the final accounts and the
commitment of administrative authorities and
economic units to submitting all financial statements
to the Ministry and the Central Auditing
Organization.
Further, its Chapter Six held 11 articles, including
the competencies of the competent minister
in relation to the budget, the qualification
and training requirements to fill the positions of
officials in the preparation, implementation and
control of the budget at the Ministry of Finance.
In the transitional provisions, the draft law referred
to the application of the item budget until
the full implementation of the program and
performance budget within four years from the
date to enforce the law’s provisions, taking into
account the development of the oversight system
in a manner appropriate with the program’s
application and performance budget. This is to
achieve optimal, efficient use of state resources,
in alignment with the economic and social development
plan, the state’s strategic objectives, and
provided that the executive regulations specify
the requirements and controls necessary for this
transformation.
www.BusinessTodayEgypt.com July-August 2021
29
News in Focus
Establishing
Arab
Court of
Arbitration
in Egypt
What are the benefits and advantages of this decision,
entailsingthat the court will begin operating?
By Hanan Mohamed
On July 7, Egypt’s Ministry of International
Cooperation announced
establishing the Arab Court of
Arbitration, in coordination
and joint cooperation with the Cairo-headquartered
Arab Economic Unity Cairo. At
its 111th session held on June 10, the Court
approved the accession of the Arab Court of
Arbitration as a functioning body under the
council’s scope as an independent Arab body.
The Arab Court of Arbitration handles the
settlement of commercial, economic and investment
disputes through arbitration between
investors and states, handles bilateral negotiations
between states, and disputes between private
sector parties. It is an independent Arab
body that has all the privileges and immunities
guaranteeing the independence of its functions,
in a manner that achieves support and
promotion of the Trade, economy and investment
movement between Arab countries.
The Council of Arab Economic Unity was established
as a specialized Arab regional organization
based in Cairo in 1964, in accordance
with Article 3 of the Arab Economic Unity
Agreement. It aims to organize and consoli-
30 July-August 2021
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News in Focus
comes in aim to settle disputes, develop areas
of arbitration and provide services. This includes
founding an academy to prepare qualifying
international arbitrators, establishing a
comprehensive library specialized in arbitration,
raising the level of international commercial
arbitration in the region, and establishing
a training center to hold training courses in
the field of arbitration, specialized legal and
technical fields, and the amicable settlement
of disputes.
Legal expert Mohamed Al-Shaheer says this
idea represents a qualitative leap in the practice
of international arbitration. Previously,
many of the existing disputes between investors
and Arab countries were considered before
the World Bank-affiliated International
Center for Settlement of Investment Disputes
(ICSID), incurring massive expenses and difficulties
in follow-up on the cases’ procedures.
“Undoubtedly, the Arab Court of Arbitration
will attract investors to conclude its arbitration
clause, making it easier for the contract’s parties
- investors and states - to present their case
fairly, and in an environment similar to the
conflict environment,” Al-Shaheer explains.
How the court works
In a statement, Al-Shaheer argues that establishing
the court as an independent, self-contained
body that enjoys relevant privileges and
immunities, would reassure investors and the
concerned state of the Council’s impartiality
and professionalism. The Court is slated to be
an important pillar of the arbitration practice
for training and qualification activities that the
court will exercise, establishing a sophisticated
arbitration library to trade developments in
commercial life, and to handle arbitration disputes
that will be referred to under the parties’
agreement, whether it is within the terms
of the original contract, or at a later stage.
date economic relations between Arab countries
on foundations appropriate for their ties,
and to achieve the best conditions for prosperity
its economy and wealth development.
In the context of joint Arab action, the council
works to promote establishing economic
unity between Arab countries, boosting bilateral
and multilateral economic integration
among that economically empower them regionally
and internationally.
What is the benefit of establishing the Arab
Court of Arbitration in Egypt?
Establishing the Arab Court of Arbitration
Cairo’s benefits
According to the international arbitrator,
establishing the Arab Court of Arbitration will
kickstart an important and vital role in the development
of Arab cooperation in commercial
and economic fields, particularly as its boards
of trustees and directors, the likes of the former
President of the Egyptian Supreme Constitutional
Court, the former Yemeni Minister
of Justice and the former Mauritanian Prime
Minister. Egypt’s role as a country hosting the
headquarters comes as amid efforts by the political
leadership to revive economic and commercial
integration between Arab countries,
making the Egyptian state a center of gravity
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31
News in Focus
within regional economic blocs.
On the other hand, the move also confirms
Cairo’s regionally leading role as an arbitration
hub, hosting many arbitration centers of
international level, and in turn leading to permanent
foreign investments in the host country.
The nature of international arbitration
Legal expert and cassation lawyer Hany Sabry
says that arbitration authorizes the arbitral
tribunal to decide the dispute between disputing
parties, and this authority is derived from
the will of parties to dispute. This starts with
an agreement, followed by a procedure, and
concluded by a ruling.
The difference between national and international
arbitration
Sabry adds that there are fundamental differences
between national and international
arbitration, as national arbitration is related
to a dispute that affects one country, whether
it is civil or commercial, while international
arbitration is where one of the dispute’s parties
is a foreigner and it affects more than one
country. Each of the countries, companies and
individuals can agree to resort to arbitration to
resolve disputes.
Advantages of international arbitration
International arbitration is enjoying increasing
popularity in business and other fields,
and there are several reasons why the disputing
parties resolve their international disputes
through arbitration:
1- International arbitration can resolve disputes
more quickly than litigation before traditional
courts, due to the limited number of
appeals from arbitral awards.
2- International arbitration is often less costly
than traditional litigation.
3- International arbitration can provide a
better justice system, because many domestic
courts are overburdened with cases.
4- Clients can play an active role in selecting
32 July-August 2021
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News in Focus
an industry-expert arbitrator in international
arbitration, rather than a specialist as with local
court judges.
5- International arbitration is flexible, and
the dispute’s parties play an important role in
choosing the most appropriate procedure to
resolve their international dispute, deciding
whether to include procedures such as document
production.
6- International arbitration can be confidential,
which is useful if the parties wish to continue
their commercial relationship or avoid
negative publicity.
7- International arbitration is neutral, which
is crucial for cross-border transactions.
The arbitrators’ nationality differs from that
of the parties:
1- If the arbitration takes place in a country
other than the one to which the dispute’s parties
belong.
2- If the arbitration is conducted according
to procedures regulated by foreign law.
Types of arbitration according to geographical
criteria
This criterion is based on the distinction between
the types of international and national
arbitration on a geographical criterion in view
of the locale, the nationality of the litigants or
the applicable law, then the arbitration is international:
if it takes place in a foreign country
or if one of its parties is foreign, or if the
applicable law is foreign or there are foreign
court procedure rules, and this standard is the
one adopted by the New York Convention - the
Convention on the Recognition of Foreign Arbitral
Awards - which is applied to arbitration
awards issued in a country other than the one
from which it is required to recognize and enforce
the arbitral award on its territory.
Types of arbitration according to the economic
criterion
This criterion depends on the economic nature
of the subject matter of the dispute, so
the arbitration is international if its subject is
related to the interests of international trade
without taking into account the place of arbitration,
the applicable law, or the nationality
of the opponents.
Court Board of Trustees
The Court’s Board of Trustees is chaired by
former President of the Supreme Constitutional
Court and President of the Egyptian Senate,
Counselor Abdel Wahab Abdel Razek, along
with four deputies: former Prime Minister of
the Republic of Mauritania Sidi Mohamed
Abu Bakr, Yemen’s former Minister of Justice
Ismail El Wazir, and Deputy President of
Egypt’s Supreme Constitutional Court Abdel
Aziz Mohamed Salman, and Vice President of
the State Council and member of Egypt’s Supreme
Administrative Court Counselor Hamdy
Abu Zeid.
The court is headed by former head of the
Supreme Constitutional Court Counselor
Farouk Sultan, and former Minister of Legal
Affairs in the House of Representatives Counselor
Magdy Hussein Al-Agati, holds the position
of deputy. The Council’s Board of Trustees
and the Board of Directors also includes
the elites of Egyptian judiciary, public figures
and high-ranking statesmen in Arab countries.
www.BusinessTodayEgypt.com July-August 2021
33
Opinion
Egypt’s Broken
Trade Link
The most popolous Arab country didn’t see the benefits that other
developing countries did in the 2000s.
By Raymond Robertson, Mexico Vergara,
Deeksha Kokas and Gladys Lopez-Acevedo
Since the early 1990s, developing countries
have experienced a coincidence
of rising exports – especially those related
to global value chains (GVCs)
– and improved labor market outcomes. Further,
during 2000-2010, rising trade was associated
with falling poverty and inequality for
many of them. Egypt, however, was not one
of them, even though it signed several trade
agreements and adopted policies to foster
trade growth, including slashing the maximum
tariff rate from 110% in the late 1980s to 40%
in the late 1990s, and making further reductions
in 2003-2004. Female labor force participation
(FLFP) and unemployment have remained
stubborn, for example (see figure 1).
Against this backdrop, our study “International
Trade and Labor Markets: Evidence from
the Arab Republic of Egypt” asks two questions:
Do trade agreements produce the same increase
in exports in Egypt as occurred in other
countries? And do higher exports generate better
local labor market outcomes in Egypt as occurred
in other countries?
Egypt is an excellent case to better understand
trade and labor markets for several reasons:
First, in the past decade, it has concluded several
free-trade agreements with the European
Union (EU), Turkey, Jordan, Morocco, and Tunisia
(the Agadir Agreement), and members of
the European Free Trade Association – helping
to accelerate both imports and exports.
Second, despite bold economic reforms
that allowed growth to rebound, it currently
continues to struggle with: (i) high youth unemployment;
(ii) low female labor force participation
rates; (iii) high informality rates;
and a stubborn gender wage gap. The reforms,
however, provided the underpinnings
for a second generation of reforms aimed at
strengthening human capital, and promoting
34 July-August 2021
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Opinion
Figure 1. Despite higher trade, unemployment still high and female labor force
participation (FLFP) still low
private sector-led growth.
Third, it is a vital part of the Middle East and
North Africa region, which experiences high
economic volatility, remains relatively undiversified
and dependent on a few commodities
that often see strong relative price swings, and
continues to be affected by security issues.
The results of our study suggest that there is
a broken link between trade and labor market
outcomes – enough so that Egypt might need to
rethink its export strategy.
A Reason to Rethink the Export Basket
Starting with how Egypt fared on the export
front after trade agreements, we use a gravity
model approach to predict bilateral trade flows
based on characteristics (like economic size
and geographic distance) that should typically
facilitate trade and to identify sectors and markets
for which Egypt seems to have untapped
potential. Our findings clearly highlight that
trade agreements tend to enhance trade and
Egypt has gotten more “bang for its buck” with
its trade agreements – that is, its exports following
trade agreements are even above internationally
estimated averages.
As for whether Egypt’s exports and labor
market are linked, we use a geography-based
Bartik (1991) approach to quantify exogenous
import demand shocks from the United States
and EU countries for Egyptian exports. Our
findings uncover the interaction between trade
and domestic labor market outcomes in Egypt –
clearly highlighting that trade does not connect
to domestic local labor markets in the same way
it does in other countries. At the local level, labor
market responses to export shocks differ
across regional labor markets in the short run,
Source: Authors’ elaboration, UNCOMTRADE data for 2018
and World Bank Databank, ILO’s estimations.
but preliminary evidence suggest that these effects
dissipate gradually and remain statistically
insignificant for most types of workers.
Why is the link between trade and labor markets
broken? Our study contends that one factor
is the composition of Egypt’s low-diversified
export basket in goods, with eroding global demand.
Oil exports account for almost a fourth
of its exports, followed by apparel, fertilizers,
and fruits – and since 2010, none of the nonoil
exports have managed take off. Another factor
is Egypt’s wage levels are one of the highest
among countries that export the same goods,
suggesting that it has a relatively weak comparative
advantage in currently exported goods.
Also, Egypt’s rate of participation in GVCs is
one of the lowest among its peers, rendering
backward linkages and employment opportunities
to a minimum.
As global trade faces a restructuring of GVCs
due to COVID-19 and increasing calls for GVC
regulations in the EU (a major trade partner for
Egypt), the urgency for Egypt to achieve better
labor market outcomes becomes more evident.
Part of its new trade strategy may well be to further
diversify its export basket and increase its
participation in GVCs to foster employment opportunities.
www.BusinessTodayEgypt.com July-August 2021
35
Spotlight
Fintech in non-banking
financial activities:
Benefits and challenges
By Asmaa Refaat
The world has been undergoing rapid
and successive technological developments
across almost all sectors, extending
to the monetary and financial
sectors, giving rise to new and innovative financial
products and services.
As Egypt is moving towards adopting a unified
national strategy for financial inclusion, expanding
the beneficiary base of non-banking financial
activities, and enhancing their efficiency and
reducing the cost of using them, there has been
a need to define the legal framework that govern
these innovative financial systems, ensuring protection
of investors’ rights, establishing the basis
for sound financial transactions, and promoting
a favorable investment environment.
Hence, the cabinet’s decision to approve a
draft law on “Regulating and Promoting Fintech
in Non-banking Financial Sector” with the aim
of supporting financial inclusion policy, increasing
the number of beneficiaries of the non-banking
financial services, and reducing the cost of
using those services and activities. This article
discusses mechanisms to leverage the benefits
and opportunities that fintech provides for the
non-banking financial sector and the management
inherent risks.
Fintech and non-banking financial services
Fintech can be defined as a set of financial
technologies that can be utilized in the delivery
of innovative and state-of-the-art financial services
or improving the traditional financial services
by reducing on cost and promoting fast and
easy delivery of those services, ensuring access
to financial services to a larger number of users
which promote financial inclusion services, drive
innovation and entrepreneurship, and boost financial
development and economic growth.
Fintech products take many forms including
digital currencies, cryptocurrencies, e-payment,
mobile payment, and digital financial platforms
such as barter platforms, peer to peer lending,
and crowdfunding.
Globally, fintech applications have contributed
to facilitating banking and financial services,
making lending without commercial banks’ intermediation
possible, facilitating and accelerating
payments and transfer of funds, developing
low-cost investment methods through financing
platforms, offering solutions to obstacles in the
financial sector, and addressing financial services
industry challenges, all of which have contributed
to enhancing productive sectors and boosting
economic growth rates.
With the spread of COVID-19 and the restrictions
imposed on direct interactions, there is a
growing reliance on innovative financial services
as well as a significant increase in digital and e-
transactions which suggests that fintech will be
an integral part of the world’s future.
The non-banking financial sector is recognized
as being complementary to the traditional
banking sector for its role in the mobilization of
savings, generating sources of funding for economic
ventures and individuals, enhancing the
flow of investments, protecting rights and property,
and bolstering investors’ confidence, contributing
towards economic development.
Unquestionably, financial innovations have a
significant role in maximizing the efficiency of
non-banking financial services. For example,
looking at the capital market, we find that financial
innovations make it more attractive to investors,
improve its quality, and help make data
available. This, in turn, contributes to increasing
the trading volume and reducing concentration
of capital, which translates into more capital for
companies and causes the trading rates to approach
to the securities’ fair value. Thus, market
indicators become more of leading indicators of
the economic activity, truly reflecting the economic
situation, minimizing risks and boosting
the economic growth.
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Spotlight
Considering the insurance business –which
traditionally relies on historical data analysis for
assessing risks, predicting the likelihood of those
risks occurring in the future, and determining
price of insurance policy– there’s a great potential
to leverage the advances of financial technology,
allowing for big data analyses and capitalizing
on blockchain technology to serve the
insurance industry.
Turning to micro, small, and medium enterprises,
we find they are growing significantly in
Egypt and absorb large numbers of employers,
yet the banking financing opportunities available
for them are way less than those available
for large firms. Fintech would help in this as
it promotes safe access to financial services by
providing financing services through digital
platforms such as barter platforms, peer to peer
lending, and crowdfunding.
With regard to real estate financing, fintech
provides state-of-the-art tools for reviewing housing
loan applications faster, more accurately,
and at lower costs, which means low interest
rates on loans. In this respect, Google Cloud had
announced the launch of a new solution, Lending
DocAI, which aims at increasing the operational
efficiency of the loan process through the
application of artificial intelligence technologies
and machine learning modules in processing
loan documents which include tax data and income
and asset statements.
Overall, fintech provides modern digital alternatives
for analyzing big data, assessing clients’
status based on the historical development of
their behavior as well as their financial and nonfinancial
transactions, among other indicators,
all of which ultimately reduce time, effort, and
cost. Fintech would help catalyze and attract new
clients and projects provided that a regulatory
framework is set to ensure protection of data privacy
and investors’ rights.
Regtech in fintech
The increase in the technology-driven financial
transactions and the need to effectively manage
them have led countries and governments
to put in place laws and regulations that protect
rights and prevent manipulation. These regulations
came to be known as regulatory technology
or “regtech”.
Economists are divided over the importance
of regtech in fintech. For example, George
Stiegler and Milton Friedman oppose regtech
fearing that it would limit innovation due to
bureaucracy besides the possibility of it limiting
market efficiency due to government interven-
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37
Spotlight
tion in market mechanisms through regulatory
systems. On the other hand, Christine Lagarde,
President of the European Central Bank, and
Jaime Dimon, Chief Executive Officer of JPMorgan,
underscore the importance of regtech as
a means of protecting individuals and financial
systems alike. Reconciling these two different
views can be achieved by establishing regulatory
systems that stimulate innovation, ensure efficiency
of the market, and protect individuals
and financial institutions
Globally, central banks and financial supervision
authorities have launched regulatory sandboxes
for financial technology products and services
through which innovators can explore new
financial solutions and come up with innovative
products while granting them (participants will
be proposing the financial technology apps)
regulatory exemptions, allowing them to directly
test their services and determine their efficiency,
quality, and readiness for full implementation
in the local market under the supervision of the
competent supervisory authority. Regulatory
sandboxes have been established in a number of
Arab countries including the UAE and Oman.
Likewise, in Egypt, and in line with Egypt’s vision
to become a regional hub for fintech in Africa
and the Middle East, the Central Bank of Egypt
(CBE) launched what is known as the Regulatory
Sandbox for Financial Technology Applications.
Singapore, Australia, and the United Kingdom,
among others, are examples of countries that
launched regulatory sandboxes for testing technological
services. Recently, the United States,
the European Union, and Hong Kong have participated
in a joint sandbox programme.
China’s fintech regulatory sandbox extends to
cover the whole country. This environment enables
innovators to implement new ideas without
having to worry about judicial threats or violating
the existing regulatory systems. This step comes
as an attempt to encourage financial technology
innovators to relocate to China, being a country
that has substantial capabilities for applying new
financial technologies. However, China had implemented
some regulatory measures, banned
cryptocurrencies transactions, blocked websites
that trade on cryptocurrencies, and restricted
some block-chain based applications.
As regulatory sandboxes came to exist in most
countries to provide opportunities for companies
to innovate while, at the same time, protect
consumers against risks, the forthcoming law on
regulation, development, and use of fintech in
non-banking financial activities in Egypt should
allow the Financial Regulatory Authority to establish
a regulatory sandbox for fintech applications
where fintech providers (registered or willing
to register) can test their innovative fintech
applications under the supervision of the authority,
with the authority providing some facilities
as to regulatory sandbox eligibility criteria.
Enhancing fintech benefits
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Spotlight
In 2018, the International Monetary Fund
(IMF) and the World Bank Group launched the
Bali Fintech Agenda, “a set of 12 policy elements
aimed at helping member countries to harness
the benefits and opportunities of rapid advances
in financial technology that are transforming
the provision of banking services, while at the
same time managing the inherent risks.” These
elements drew upon the experience of member
countries and are intended to serve as guiding
points to inform national authorities when developing
their own national fintech agendas.
The 12 policy elements include requirements
for developing regulatory standards for fintech,
including, building a foundational digital and financial
infrastructure that enable efficient data
collection, processing, and transmission; reinforcing
competition and commitment to open,
free, and contestable markets to ensure a level
playing field and promote high-quality financial
services. By the same token, the forthcoming law
on regulating fintech in Egypt should include
articles that address risks of market concentration
and allow fair-and-transparent access to key
infrastructure.
The Bali Fintech Agenda also outlined the importance
of adapting the regulatory framework
to match the state-of-the-art technologies, ensuring
inciting innovation, making use of modern
technologies, and protecting the financial
systems from the potential risks of exploiting
fintech for money laundering and funding terrorists,
in addition to the risks related to cyberattacks,
data protection, cybersecurity threats,
operational risks, market concentration risks,
and consumer protection. Thus, formulating
the legal frameworks should be in line with national
circumstances, and these frameworks shall
be reviewed and updated permanently to keep
pace with the technological changes and fintech
developments.
Fintech challenges
Based on global experiences, a number of
challenges affecting the safety and stability of the
fintech systems can be identified, and a number
of proposed mechanisms can be developed to
strengthen confidence in financial services and
achieve the goals of promoting investment.
Among these challenges is the risk that limited
players control the provision of financial services
due to their large databases and artificial intelligence
based software. In China, for example,
while the technological growth has been very
successful, allowing millions of new entrants to
benefit from available financial products, it has
also led to two companies controlling more than
90 percent of the mobile payments, which has
been described by the IMF as a “unique and
systemic challenge to financial stability and efficiency”.
Hence, care must be taken not to allow
specific players to monopolize the provision
of financial services. Controls on the use of data
shall be imposed as well.
Another challenge that fintech imposed was
the death of one of the founders of the cryptocurrency
trading platforms and the consequent
disappearance of huge sums of money. However,
in the case of Egypt, the CBE warned against
trading of cryptocurrencies. So, for legal consistency,
establishing platforms for trading cryptocurrencies
hasn’t been allowed.
On the other side, there is the impact of fintech
on central banks. While fintech can help
central banks improve their services, through
issuing digital currencies, expanding access to
payment services, and increasing flexibility of
financial services, it could, however, impede the
application of the monetary policy and redefine
the role of central banks as lending institutions
to be “a render of last resort”, a situation that
requires considering coordination between the
CBE and the Financial Regulatory Authority
roles in this regard.
Peer-to-peer lending offers another challenge
in fintech. In this type of social lending, a person
gets a loan from another individual and an
interest rate is identified. The higher the interest
rate is, the higher the risk. These debts are
then bundled into packages and sold to a third
party, usually a major investor. However, some
formal adjustments to those packages may be
made in accordance with the buyer’s criteria, a
sort of a change of realities. This has in fact happened
with Lending Club, one of the major U.S.
fintech companies, which led to the resignation
of its CEO. However, the regulatory regimes of
peer-to-peer lending differs from one country to
another. For example, in Germany and France,
peer-to-peer lending comes under the supervisory
authority just like banks. In the United States,
it is regarded in the same way as securities issuance
while Japan prohibits it basically.
In sum, with the many benefits and challenges
of fintech, the Egyptian government has realized
the importance of developing a legal framework
to regulate the uses of fintech in non-banking
financial activities. However, before issuing the
final draft of the law, it is necessary that all the
requirements needed to strengthen confidence
in the financial system and protect the economy
from potential risks be considered, while providing
opportunities to promote innovation and
benefit from modern technologies.
www.BusinessTodayEgypt.com July-August 2021
39
Spotlight
The Domino Effect: Global
Chip Shortage Crisis Hits
the Egyptian Market
By Basant Gamal
Since the outbreak of the COVID-19
pandemic in late 2019, the world has
been faced with unprecedented economic
challenges that went beyond
the macroeconomic aspects, i.e. contraction
of global gross domestic product (GDP) and
reduction of global trade, to hit the smallest
units of the economic system.
The pandemic has posed a significant blow
to the chips and semiconductors (which are essential
components of technology across industries/
in technology products) industry.
According to an analysis by Goldman Sachs,
up to 169 industries are likely to be hit by chips
and semiconductors’ shortage, most notably
the automotive and electronics industries, noting
that industries that spend more than one
percent of their GDP on semiconductors will
be directly or indirectly impacted by the crisis.
While Egypt isn’t an exporter of chips, it isn’t
immune to the negative impacts of the crisis.
Causes of global shortage of chips and semiconductors
Several factors converged to exacerbate the
chips shortage crisis. Chief among these fac-
40 July-August 2021
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Spotlight
Figure 1: Passenger vehicles sales in selected countries
Source: Knoema, passenger vehicles sales
tors was the outbreak of the Coronavirus which
placed considerable pressures on the global
supply chains and resulted in a decline in supply
due to the closure of a large number of chips
factories despite the high demand. Causes of
this crisis could be summarized as below:
Inaccurate expectations
The precautionary measures taken to contain
the pandemic resulted in a temporary shutdown
of car factories. Amid expectations of a
progressive decline in demand and the continued
closure of production lines in 2020, most
car companies worldwide had cancelled their
purchase orders of chips.
However, reality indicated the contrary. The
automotive industry had been revitalized faster
than expected and sales had flourished in
the last quarter of 2020 and the early months
of 2021. For this, automotive manufacturers
tried to speed up to reach high production levels
again but chips factories could not respond
quickly enough to the high demand due to a
heavy delivery schedule. The following graph
shows sales and production of cars in selected
countries over five years.
As can be seen from figure 1, car
sales showed an annual decline in all
the selected countries during 2020 by
6.03 percent in china, 11.42 percent
in Japan, 27.92 percent in the United
States, 19.2 percent in Germany, and
17.85 percent in India. This decline
came despite the recovery the industry
made end of 2020 due to the inability to
offset the accumulative losses suffered
the whole year. However, the recovery
trend is expected to continue during
2021.
As illustrated in figure 2, the total
global car sales of passenger and commercial
vehicles decreased from 90.42
million units in 2019 to 77.97 million units in
2020. As for the worldwide automobile production,
the below figure shows worldwide production
from 2002 to 2020.
Figure 3 reveals a decline in global car production
during 2020, going down from 92 million
units in 2019 to 78 million units, recording
a year-over-year decline of 15.2 percent. This
decline can be attributed to the aforementioned
reasons.
High demand on electronics
Last year, most countries enforced full lockdown
and declared curfew for longer periods
aiming at containment of the Coronavirus.
This translated into prolonged periods of time
spent at homes which resulted in a heavy and
remarkable demand on electronics either for
entertainment, communication, work, or distant
learning.
Smartphone shipments are anticipated to
grow by 13.9 percent in the first quarter of 2021
and 5.5 percent for the entire year. The following
figure presents data for the top five mobile
phones companies during the fourth quarter of
2020:
Figure 2: Global car sales
Source: International Organization of Motor Vehicle
Manufacturers, Global sales statistics
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41
Spotlight
Figure 3: Worldwide annual car production
Source: Statista, Estimated worldwide automobile production
Figure 4: Top five global smartphone shipments
Source: IDC Quarterly Mobile Phone Tracker
As is depicted in figure 4, mobile phone shipments
for the top five companies have seen an
increase during the fourth quarter of 2020, except
for Huawei which is possibly due to the
US sanctions imposed on it to limit its activities
overseas.
US sanctions on China
Before COVID-19, the chip and semiconductor
industry encountered pressure due to
the trade war between the United States and
China, which primarily affected Huawei. To reduce
the impact of sanctions, Huawei started
storing chips and Taiwan’s TSMC was its exclusive
supplier, which placed pressure on the
market.
Insufficient supply
The chip market is controlled by a small
number of market players. The global shortage
of chips has drawn attention to Taiwan’s mammoth
role in manufacturing semiconductors,
as it captures a larger share of the market as
shown in the figure below:
As illustrated by figure 5, Taiwan has got the
lion’s share of the chips and semiconductors
market, particularly TSMC whose market share
reached 54 percent till early 2021.
In addition to all the previous reasons, a chip
plant owned to the Japanese Renesas Electronics
which supplies the market with about 30
percent of the microcontroller units used in
cars was exposed to a fire last March,
and it will will take about 100 days at
least to restore full capacity.
Dire consequences
The chip shortage crisis has many
negative repercussions on several industries,
some of which have already
begun to emerge and others are likely
to emerge in the coming period. Below, we detail
these implications.
Decline of production in automotive and electronics
sectors
According to IHS Market, the global chip
shortage crisis could affect the production of
about 1.3 million cars globally during the first
quarter of 2021. The crisis forced many global
automotive manufacturers to reduce production
and accordingly adjust schedules and action
plans.
In response to this crisis, a large number of
global automotive manufacturers including
Volkswagen, General Motors, Ford, Toyota,
Daimler, and BMW, among others, have announced
procedures to overcome the pandemic
reducing production, shutting down
factories, and temporarily laying off staff.
The automotive industry, however, wasn’t
the only affected sector. The crisis also hit
technology companies after seeing an improvement
last year. For example, Apple delayed the
release of iPhone 12 for two months due to
the chip shortage. Samsung also warned that
its operations might be affected by the chips
crisis, thus confirming the transfer of the crisis
to the technology sector.
In a related context, Gigaset, a manufacturer
of smart phones and smart home appliances,
indicated that about 80 percent of its production
has been affected by the lack of electronic
chips. Moreover, AVM stated that suppliers
canceled chips’ purchase orders shortly before
the scheduled time.
Rising prices
With shortage of supply in chip-dependent
industries due to the decrease in total production
and recovery of demand in the automotive
and smart devices sectors, prices of products in
these two sectors are expected to rise in the upcoming
period. Xiaomi’s CEO pointed out to
that stating, “chip shortage has increased costs
which may pass on to consumers.”
Figure 6 show that the average price of smartphones
is constantly increasing, with expecta-
42 July-August 2021
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Spotlight
Figure 3: Worldwide annual car production
tions of it reaching $317 by the end of 2021, a
year-over-year increase of 2.5 percent.
Figure 6: Smartphones average selling price
Chip crisis and the Egyptian market
Egypt ranks high on the list of the automotive
assembly industry in the Middle East and
North Africa region. Until 2018, Egypt owned
about 12 automotive assembly plants, with local
components accounting for only 17 percent
of the final product. The government aims to
increase this percentage to 46 percent over the
coming years.
Accordingly, the automotive sector in Egypt
was naturally expected to be affected by the
global chip shortage crisis due to its reliance
on external components. In mid-April, Ghabbour
Auto announced its inability to deliver
the number of cars expected of it under the
initiative of “converting and replacing cars to
natural gas” launched by the Ministry of Finance
due to Hyundai’s shortage of electronic
control units.
The Egyptian automotive industry also suffered
shortage of production inputs following
the discontinuation of factories manufacturing
electronic control units due to COVID. In
this respect, Khaled Saad, Secretary-General
of the Egyptian Automobile Manufacturers’
Association stated that vehicle manufactures
face enormous difficulties during the current
period due to lack of inputs, anticipating low
productivity levels of local companies. Saad
pointed out that companies participating in
the initiative of “converting and replacing cars
to natural gas” may experience delays in delivery
or may even be not able to deliver if control
units remain unavailable.
A predictable corollary of this crisis is the
rise of prices of different car models, with an
increase of about EGP 15,000 since the beginning
of January. Besides the chip crisis, the deferment
of imports of components of secondhand
vehicles and the rise of cost of shipping
vehicles by sea by 300 percent will have a bearing
on the productivity of assembly plants in
Egypt and will cause shortage in some car models
in the upcoming period.
In sum, it all started with the coronavirus
pandemic which affected the demand and supply
in the chip market, with supply going down
due to the closure of producing companies for
prolonged periods of time and demand going
up due to the fast recovery of the automotive
industry and the growing demand on electronics,
all of which has had an impact on the Egyptian
market.
Source: Stat Investor, Average selling
price of smartphones worldwide
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43
Face of Business
Mohamed El-Sallab
Chairman of Mostafa
El-Sallab Group
On the Egyptian
Economy and
Industry Outlook
Few businesses are as successful as El-Sallab Group. Mohammed
El-Sallab speaks about the legacy, and why he’s bullish on Egypt.
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Photography by Hossam Youssef
Location: Grand Nile Tower
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Face of Business
Firstly: Macroeconomics and Industry
What was the state of the Egyptian economy
prior to the economic reform program
of 2016?
In 2014, Egypt’s economy was unstable after
two revolutions, and there was a general state of
confusion following the upheaval, and therefore
this created an imperative need to implement
the economic reform program in 2016, which
included measures such as liberalizing the exchange
rate and increasing interest rates.
The weak economic situation created the
need for an ambitious plan to rebuild the state
and the economy, and it proved positive.
Four years after the launch of the economic reform
program, what are the main advantages and
disadvantages of the first phase of the program?
After 4 years, it can be said that Egypt has
strongly succeeded in implementing an economic
reform program, and this is positive for
the country in the long term.
I see the economic reform process’s resounding
success; the value of the Egyptian pound is
improving, and the economy has been able to
absorb the coronavirus crisis’s negative effects
given the economy’s capacity to withstand the
shocks.
However, one of the negative aspects of this
stage is that investments are directed to banks
due to high interest rates, and this of course negatively
affects the industry.
At the beginning of 2020, the Egyptian state
took a number of measures to localize the industry
and increase the proportion of the local
component [in goods], and these measures were
disrupted due to the Covid-19 crisis, but the state
is still proceeding with a plan to reform the industry,
because history has proven that there is
no alternative to high-tech industry in supporting
sustainable economic growth. Today, the
plan is to reduce interest so that factories can
continue, and we have seen soft financing initiatives
for factories at an interest rate of 8%. Other
initiatives included financing small and medium
enterprises at an interest rate of 5%, the initiative
to settle defaulters’ debt, and other initiatives
primarily aiming to help the industrial sector
return to growth.
How do you evaluate the second phase of the
macroeconomic program, and in your opinion,
what are the most important requirements for
reforming the industrial sector?
The economic reform program’s second phase
is completely different, as it is primarily based on
higher-priority sectors: industry, technology, and
agriculture. These sectors are also the most capable
of driving economic growth and achieving
sustainable development, by boosting exports,
supporting food security, reducing imports, and
attracting foreign investment.
There is also great interest in technical education,
with the state focusing on establishing
technical schools attached to major factories, directing
interest in small and medium industries;
this is one of the main reasons behind economic
growth and development in countries such as
Germany, China, Korea, Malaysia, Indonesia
and Vietnam. The state is working on this aspect
and provides factories, lands, facilities, logistical,
material and marketing support, and holds exhibitions
to help market these small factories.
The automation of the state’s financial system
and the digital transformation of taxes and customs
give the business community transparency
and reassurance. Additionally, one of the most
important advantages of this economic reform
stage is a shift whereby the state increasingly relies
on the private sector.
The industrial sector has borne the brunt of the
rise in energy prices, according to industry leaders.
How can you balance support for industry
while at the same time not adding new burdens
on the state budget?
It is necessary to separate energy prices from
the industry, or industry support amongst the
relevant ministries. The Ministries of Electricity
and Petroleum are the two ministries that
deal the most closely with industry and have a
problem with the industry, especially after the
price hike. The two ministries alone should not
foot the bill. The government, represented by
the Ministry of Finance, collects value-added,
income tax, and all kinds of taxes from factories.
It would be better if the Ministry of Finance
supports these industries by paying the
required support difference to the Ministries
of Petroleum and Electricity to maintain the
price. Also, local energy prices must reach the
level of international prices because our goal is
to export, and without that we wouldn’t be able
to compete; this must be done through export
and energy subsidies through the Ministry of
Finance, ensuring operational economic efficiency.
The ministries of Electricity and Petroleum
should also not deal with factories for the purpose
of profit; the industry provides job opportunities
and pays taxes, and therefore a balance
must be achieved while providing energy
at competitive prices. We need a clear energy
pricing policy, in line with the global market.
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In the same context, what are the requirements
for injecting new local and foreign investments
into the industrial sector, and what are the
sectors most in demand at the present time?
Egypt has 22 new cities under construction,
is planning to eliminate slum neighborhoods,
and has a very wide consumer market, requiring
construction, clothing, food and services, all of
which requires the localization of industries and
an increase in added value, thereby requiring the
state to have an industry map that determines
the required industries and their locations.
The state must stand by the industry and support
it in its early stages by encouraging investors
to invest in Egypt.
Egypt is an open market and the whole world
is an open market. There are landlocked countries
that do not overlook ports, but they export
three times what Egypt exports, whereas we
are a country characterized by a distinguished
geographical location and we have a great potential
to increase exports, requiring state support.
The multiplicity of taxes paid by factories
such as real estate tax, dividend tax, income tax
and value added tax, acts as a deterrent to investment.
There must be a more stable, less precarious
direction for taxation levels on factories;
the Supreme Council of Taxes is responsible for
setting up this vision and monitoring its implementation.
Furthermore, for any investor looking for
political stability and economic stability, Egypt
is also a wise choice. On the economic aspect,
there is a need for improvement on energy prices
and tax stability.
Can Egypt achieve total annual exports of $100
billion? What are the requirements to reach this
goal, what are the sectors capable of achieving it,
and what are the industries that can contribute to
this ideal target?
Egypt has a great ability to achieve this goal.
Several now-stalled factories were previously exporting;
international agreements and cost reduction
are key to achieving the goal of $100 billion
in exports. There are many industries that
can export, but their problem is the high costs; if
we are able to support exports so that the product
reaches the real cost, we will attain this goal,
open currently closed factories, and localize the
industries we need, in a way that reduces costs
and increases the ability to export. We also need
to improve collaboration with African markets.
What are the construction industry’s main challenges
in Egypt, and has the sector benefited
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International agreements and cost
reduction are key to achieving the
goal of $100 billion in national
exports.
from the high prices of raw materials such as
iron and aluminum during the recent period?
What is the impact of reconstruction projects
on the sector, and how can it support maximum
benefit?
The building materials industry faces many
challenges, just like any industry, but problems
such as energy prices, transportation and shipping
prices locally and abroad are increasing,
given that this industry is energy-intensive, and
an industry such as ceramics was not previously
included in the export subsidy program, but it
was added in the new program that came into
effect starting July 1. I expect this matter will
greatly support exports’ growth during the upcoming
period, and will contribute to Egyptian
companies’ ability to strongly participate in reconstruction
projects in Arab countries. In Libya,
Iraq, Gaza and Sudan, we will have the ability
to compete because we produce goods of high
quality and we will be able to achieve price competition
as well, which will strongly reflect on
Egyptian exports, especially building materials,
due to Arab countries’ preference for the Egyptian
product.
As for prices of raw materials, of course any
increase in raw materials will be reflected in production
costs and thus, the product price. The
industry was negatively affected by the increase
in international prices of raw materials and not
the other way around.
How has the construction upturn in Egypt affected
demand volumes of building materials,
and do you expect an increase in the prices of
building materials in the upcoming period after
the rise of some materials globally?
Of course, Egypt’s construction upturn led to
an increase in the demand for building materials,
both in new cities and national projects, but
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this demand was negatively affected during the
suspension of building licenses, especially since
construction represents a significant amount of
demand for building materials, but I expect this
demand to rebound since building permits are
back again with new requirements.
Talking about expectations of an increase or
decrease in prices is no longer as easy as it was
previously, since the price of building materials
is affected by the international prices of raw
materials that move very quickly and sometimes
with sudden movements that are difficult to anticipate,
but in the end any pricing is governed
by the rules of supply and demand.
How has the Coronavirus pandemic affected the
industrial sector, especially building materials?
Has the sector recovered from the pandemic’s
repercussions, and how can all workers be vaccinated
to ensure that production is not affected?
The industrial sector benefited from the Coronavirus
crisis, as exports increased due to other
countries halting exporting. Industries such as
medical supplies expanded, and the food sector
was one of the sectors that made the most profits
during the crisis, but what affected the building
materials sector negatively during the past period
is the suspension of building permits.
As for the vaccinations, the government is
making a great effort to vaccinate the largest
possible number of citizens within a short time
period, which are very appreciated efforts. I expect
that increased vaccination rates will contribute
to keeping the wheel of production turning,
benefiting all sectors without exception.
What industrial projects does Egypt need at the
present time, and how can Egyptian businessmen
exploit and develop public business sector
companies?
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Egypt needs to prioritize technology in all
fields, especially the industrial and high-tech industries.
Technology itself is a starting point for
any other sector. I hope that the technological
industries will witness a great renaissance that
keeps apace with Egypt’s tremendous development
in all fields, and these are great opportunities
for the private sector investment.
As for business sector companies, I see the
ministry’s tendency to involve the private sector
in development projects, which are good opportunities,
especially in companies that work in
profitable fields such as the garment industry,
spinning and weaving, and the real estate sector.
These are attractive sectors, provided that
the partnership is based on strong foundations
aimed at promoting companies and increasing
profitability, thus benefiting both parties.
El Sallab group’s legacy of excellence
Egypt is famous for its multiplicity of family
businesses. Which are the largest and most successful
of these companies, and what are the
most important challenges facing their growth
and continuity?
Egypt has many successful family businesses.
I will not mention specific names, and this exists
all over the world, such as BMW, Mercedes,
Adidas, and others. This type of company has
strong foundations for survival and continuity
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because those in charge of them always fear for
the family’s name and reputation. Family businesses
have a lifespan of more than a hundred
years, including El Sallab Group, which began
in 1912.
As for the obstacles they face, they are no different
from the obstacles and challenges generally
facing investment and the work of companies
in Egypt.
You took over from the leadership of the Mostafa
El-Sallab group at an early age, how were
you prepped to take this position? What qualities
did you inherit from your father, what were
the most prominent challenges you faced at the
beginning of your work, and what are your ambitions
for the group?
In fact, I started working with my father
at a very early age, at the age of 18, and I was
constantly trained in foreign factories, and I
worked with the group in all jobs, stores, marketing,
technology management, human resources,
sales and importing, for about 7 years
before I took any leadership positions in the
company, until I gained the necessary experience
to manage the work. I assumed the position
of Vice Chairman of the Board of Directors
in 2008 after I gained the necessary experience.
With the death of my father, I assumed the position
of Chairman of the Board of Directors, and
it was a great challenge since my brother Tarek
and I were still quite young, but we had a goal
in mind: to maintain the family name, the company’s
advancement, and ensure Sallab remains
the number one name in this field.
I have great ambitions for the group, and
of course we have plans to work in other new
fields; we also have ambitions to increase production
lines and grow the group even more.
The most important thing I learned from my
father is sincerity at work, and dealing with all
employees and workers in the company as part
of the family.
Does El Sallab Group see that the prices of its
current products reflect production costs, and
is there an intention to increase prices in the
upcoming period after demand recovers?
The group consists of Royal Factory, the
group’s industrial arm, and El Sallab Company,
the group’s commercial arm, and they complement
each other. For the factory, of course, the
cost of production was affected by the factors
you mentioned, including rising energy prices.
However, the pricing policy takes into account
all the factors of cost, production, and the market;
a cost is thereby set in proportion to the
factors of supply and demand, which determine
the price. We have no intention of increasing
prices, and this is governed by the rules of supply
and demand.
What is the volume of El Sallab Group’s export,
and how much does it represent in sales? Does
the group have export dues, and what are the
group’s proposals to increase ceramic exports
in Egypt?
El Sallab Group exports to a very large group
of European, Arab, African and Asian countries
as well as the Americas, and we were able
to open markets in all these countries despite
fierce competition due to the quality of the
product and design, distinguishably characteristic
of El Sallab Group and the Royal Factory.
We were able to strongly compete because we
have the latest machines and technology in this
field.
As for export dues, in reality the ceramic industry
in Egypt was constrained because it was
not among the industries included in the export
support program, but this matter was remedied
in the last program that began as of July
1, and the ceramic industry was included in the
export support program, which will bring great
benefit to Egypt during the upcoming period,
especially due to the export opportunities represented
in reconstruction projects. This will
have a major role for Egypt’s building materials
sector, given that it is one of the strongest
countries in the building materials industry and
there is global popularity in this field.
What are the most profitable sectors in Egypt,
and what is a prospective project you wish to
establish?
There are many profitable sectors in Egypt,
although any field will witness a gain and a loss,
but Egypt has more than one hundred million
citizens, a wide consumption market, and any
project can make a profit if it is studied well, but
what any sector needs to achieve the required
profitability is to overcome the investment obstacles
it faces.
The project I most wish to create, which is
my dream, is to establish a technical school in
the name of Mostafa El Sallab to teach Egyptian
workers and train them in the technical skills
needed to succeed in the labor market. It would
be particularly beneficial for the ceramics sector.
Who is your role model among businessmen in
Egypt and outside Egypt?
Mostafa El Sallab [my father].
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In-Depth
Meeting The
Challenge
How the ICT sector took
a global pandemic in stride.
By Christine Salzmann
What will future generations say defined
the COVID-19 pandemic? Most
likely, it will go down in history as
one of the modern world’s largest
health and economic crises, as it should, but also as
a driver for digitalization and innovation.
Throughout history, crises provided stimulating
environments for change, discovery, and accelerated
development compared to stable time periods,
and the ongoing COVID-19 pandemic is no different.
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OBG Covid-19 Recovery Roadmap Graph source: IMF
World Economic Outlook Database, April 2021
Technology adoption on all sides – from
governmental institutions to businesses and its
consumers – has become one of the pandemic’s
most defining features, with the global information
and communications technology (ICT) industry
taking the lead on solving each challenge
the pandemic threw at the world.
Highlighting Egypt’s economic resilience and
pandemic recovery, global research company
Oxford Business Group’s (OBG) latest report
on Egypt sheds light on how the government
mobilized the ICT sector through various initiatives
and programs in a bid to reduce the pandemic’s
effects on the country’s economy.
The State of ICT in Egypt
Egypt is home to a robust and innovative ICT
sector, with growth outpacing broader economic
expansion, writes OBG, adding that the government
has long prioritized ICT development.
Pre-pandemic, the ICT sector’s growth outperformed
the country’s broader economic
expansion. The sector was at “one of the fastest
rates of expansion across all economic sectors”,
growing by 16% in the fiscal year (FY)
2018/2019, reaching LE 93 billion with overall
GDP growth of 5.6%.
It was previously forecasted to continue its upward
trajectory, with the government projecting
growth of 15.2% in FY 2019/2020 yielding an
estimated LE 108 billion in revenue, as well as
comprising 4.4% of GDP.
The Oxford Business Group writes that the
“industry’s strong performance stands in contrast
to that of many other sectors”, projecting
16% growth in FY 2020/2021.
Egypt’s economic reforms and efforts to fortify
and diversify the economy were also central
to the pandemic’s success, providing Egypt with
a more secure economic base in the face of external
shocks and strengthening its ability to respond
to the pandemic.
Aiming to keep apace with digitalization and
meet its heightened need during the pandemic,
Egypt’s Ministry of Communications and Information
Technology (MCIT) launched Digital
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Graph source: IMF
Egypt in mid-2020, a comprehensive plan to
shift towards a more digital society and encourage
innovation.
“The [Digital Egypt] project digitalizes all government
activities and services. As of July 2021,
75 public services were digitalized and are being
offered nationwide, and we plan to increase this
to 170 services by the end of 2021,” Minister of
Communications and Information Technology
(MCIT), Amr Talaat, told OBG.
Through the program, the MCIT worked towards
transforming the country with targeted
investments, capacity-building and training programs,
as well as the adoption of e-government
services and infrastructure improvements, the
report read.
“The pandemic has been an unprecedented
opportunity to encourage the uptake of digitalized
services,” Talaat explained. “As of mid-
2021, more than 1.3 million citizens had registered
for and accessed government services
online.”
Meeting Increased Demand
Highlighting the need to expand both the
ICT infrastructure and capacity, the pandemic
saw a surge in demand for ICT products and services,
as people became ever reliant on digital
Graph source: MCIT
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In-Depth
Infographic source: We are Social; Hootsuite
tools and services.
“People went fully digital in most aspects of
their lives,” Talaat told OBG in September 2020.
“The pandemic caused an immediate surge in
internet usage patterns, both in terms of users
and peak hours.”
According to a report from the National
Telecom Regulatory Authority, in mid-March
and mid-April alone, there was a 40% year-onyear
increase in online traffic.
Peak hours for internet services and online
applications doubled to 15 hours per day, writes
OBG, as web browsing skyrocketed by 131%,
home internet usage climbed by 87%, and mobile
internet activity rose by 18%. ADSL subscriptions
also saw a big jump, as the number
of subscriptions increased by 6.9 million in June
2019 to 8 million in June 2020.
According to the International Data Corporation,
the number of smartphones shipped to
Egypt increased by 16.5% in 2019 to 14.9 million
units, and the OBG report attributes this to
the young generation’s willingness to spend and
buy new consumer goods.
In turn, the uptick in smartphone purchases
boosted mobile internet use, with Egypt witnessing
a 24% rise in the number of mobile internet
users to 42.3 million in January 2020, according
to the MCIT.
To meet amplified demand, the MCIT’s Information
Technology Industry Development
Agency (ITIDA) disbursed over LE61 million in
export subsidies to 106 ICT companies between
mid-April and July 2020 through the ExportIT
program, the report reads.
ICT exports, as well as business process outsourcing
(BPO) and information technology
outsourcing (ITO) services, are an important
source for the country’s revenue, with market
research firm IDC expecting returns to grow
from $3.3 billion in 2017 to $4.7 billion in 2020,
according to OBG.
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In addition to subsidies, the MCIT increased
the capacity of the country’s international gateways
by over 50%, provided hospital staff access
to the internet and data at no charge, and created
digital platforms for public school students
to during the online learning period.
With increased traffic came an intensified
need for an infrastructure capable to accommodating
demand. The MCIT’s previous investment
in prioritizing strengthening ICT infrastructure,
worth $1.9 billion, supported the
country’s ability to the bulk of this additional
demand.
Digitalizing the State
Digital transformation was the star buzzword
Infographic source: ITIDA
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In-Depth
Infographic source: Oxford University Covid-19 Government Response Tracker
Graph source: CBE
of 2020, tackling the pandemic’s challenges
with triumphant results.
Aligning with Egypt’s digital transformation
strategy, which aimed to meet Egypt’s 2030 Vision
goals, various ministries signed new cooperation
protocols with the Ministry of Communications
and Information Technology to digitize
all state-run services.
To meet their needs, ITIDA launched the Our
Opportunity is Digital platform in 2020, writes
OBG, explaining the platform as a place where
“national digital transformation projects are offered
specifically to small and medium-sized enterprises
for either direct implementation or in
partnership with large local and multinational
companies.”
The move towards a more digital Egypt is facilitated
by the government’s requirements for
certain transactions conducted through digital
payments, such as customs duties and taxes,
which has encouraged the private sector to of-
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Infographic source: MCIT
fer similar solutions enabling the transition, the
OBG explained.
With the remote working trends, digital payments
and e-commerce are expected to continue,
and there is plenty of opportunity for public-private
collaboration to strengthen digital
infrastructure, OBG writes further into the report,
with further financial inclusion expected
to be a priority into the future.
“Egypt is working with global leaders in this
space. The Ministry of Public Enterprise Sector
announced in November 2019 that Microsoft
and software solutions provider SAP won a
tender to apply the digital transformation of 60
state-owned firms and holding companies. The
tender, at the time being the largest of its kind
in the Middle East, would facilitate the standardization
and automation of operations to
improve efficiency.
In May of that year, the MCIT and the General
Health Care Authority announced they would
create a framework to facilitate the digitalization
of the authority’s operations in order to
streamline health services and make care more
accessible,” the report also read.
Additionally, OBG mentions the government’s
work towards strengthening cybersecurity
at the national level to protect data, highlight-
Infographic source: ITIDA
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In-Depth
Graph source: Gartner
ing the National Cybersecurity Strategy 2018-21,
and Egypt’s recent ranking as the fourth out of
22 Arab states and 23rd out of 175 countries in
the International Telecommunication Union’s
latest Global Cybersecurity Index. Cybercrime
in Egypt rose by 190% between 2012 and 2017,
according to the Cabinet’s Information and Decision
Support Centre.
It also pointed out the 2018 anti-cybercrime
law and the Personal Data Protection Law, modeled
after the EU’s General Data Protection
Regulation (GDPR), coming into effect in July
2020.
The report stressed that “with more firms conducting
business operations online, a high level
of awareness of data security and the required
protections will be necessary for companies to
thrive in 2021 and beyond.”
The Digital Workplace on the Cloud
The COVID-19 pandemic drastically changed
how organizations work and operate, introducing
a new challenge for businesses around the
world, remote working.
As governments implemented a host of measures
aiming to curb the spread of Covid-19,
businesses were required to shift office traditions
such as face-to-face meetings and open
floor plans to virtual meetings and home office
spaces.
Playing a vital role in facilitating remote work,
the public cloud services market swiftly expanded,
quickly becoming central to the economy’s
home working transition.
OBG calls public cloud services as “core contributors
to the ICT sector’s growth” in recent
years, with a fast expanding market, stating
“Africa [is] expecting more than $15 billion in
data center investment between 2020 and 2025,
much of which will be concentrated in Egypt,
Morocco, Nigeria, Kenya and South Africa.”
Moreover, its MENA region revenues are expected
to grow by 21% in 2020 to reach $3 billion,
according to global research and advisory
company Gartner.
Companies moved their operations to reliable
cloud platforms in order to use video-conferencing
applications and other remote-work
technologies, allowing both employees and customers
to carry out daily operations and transactions
at home, the report wrote.
This allows businesses to effectively manage
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Graph source: Gartner
their resources and reduce costs without any interruption
to workflow.
For today’s workforce, the technology became
invaluable. According to an April 2020 survey by
the American Chamber of Commerce in Egypt,
over 90% of respondents had adopted infectioncontrol
procedures, and nearly all had shifted
non-essential employees to remote work, the
OBG report explained.
“Now the culture of working from home is
prevalent in Egypt, and is increasingly acceptable,”
Talaat told OBG, adding that “hopefully,
when the pandemic is over, people will not go
back to how they learned or worked before”.
“When people had to leave their offices, we
had the capacity to allow them to work from
home, and this left us with over 17% of the
outsourcing market worldwide,” Amr Mahfouz,
CEO of ITIDA, told press outlets in December
2020, adding that the government’s investment
of $1.6 billion between 2018 and 2020 to improve
internet provision facilitated the transitions
necessitated by the pandemic.
Cloud technology will also be prevalent in the
New Administrative Capital (NAC), the report
added, enabling the smart city to provide sup-
Graph source: ITIDA
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In-Depth
New Administrative Capital
New Mansoura City
Smart
Cities
New Alamein City
New Obour City
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Infographic source: Council of Ministers
port to the government ministries, diplomatic
missions, international universities, and residential
neighborhoods that it will soon host.
A continued journey towards digitalization
Like many countries, Egypt is adapting to fasting
changing needs in the continued wake of a
global pandemic, with its ICT sector serving as a
core pillar in its economic resilience and ability
to become one of the only countries to see positive
growth.
The country’s fiscal and economic reforms
in recent years put in place strong foundations
that gave it protection from periods of instability
such as the Covid-19 pandemic, with the government’s
pre-pandemic investment to strengthen
ICT infrastructure and increase internet penetration
empowering business continuity across
several sectors.
Even with the sudden and accelerated demand
for ICT services and products, the OBG’s
report reflects the state’s pre-pandemic and
on-going effort for robust economic impact
through export subsidies, its national digital
transformation program “Digital Egypt,” and so
much more to prepare it for a brighter future.
Digital payment
use in Egypt,
2019
Infographic source: We Are Social; Hootsuite
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63
BT Scene
Altibbi and Reckitt® Sign a Long-
Term Agreement to Spread Awareness
about Common Health Issues in
the Region
The leading digital health platform in MENA, Altibbi, has announced
signing a joint cooperation agreement with Reckitt,
manufacturers of many household brands. The ceremony took
place at Reckitt’s headquarters in the UAE earlier this June.
This prospective collaboration aims to provide consultation
& medical guidance regarding common health-related issues,
such as Gastroesophageal reflux disease (GERD), Sore Throat
Management, Hygienic Habits and Sexual Well-being. The
scope will also highlight the negative side-effects of strong
medications overuse, such as antibiotics and proton pump
inhibitors (PPIs), in addition to introducing healthy lifestyles.
On this occasion, Founder & CEO of Altibbi, Mr. Jalil Allabadi
declared: “We are pleased that a renowned multinational such
as Reckitt has chosen Altibbi for a long-term partnership;
building on the huge success we achieved together amidst the
global Covid-19 crisis. Through our combined efforts, we hope
to engage our customers in discussions about their health &
wellbeing, as well as serve more users in more diverse specialties;
including the range of health & hygiene products that
are Reckitt’s area of expertise.”
Moreover, Co-founder & COO of Altibbi, Mr. Ayman Sharaiha
elaborated: “We are proud that Altibbi is MENA’s leading
platform in providing the latest digital transformation solutions
for businesses, especially FMCGs. Altibbi has already
worked with Gaviscon; a Reckitt brand, and with experienced
physicians to spread awareness about digestive maladies. The
aforementioned online campaigns have reached more than
3 million unique users across the KSA and the UAE, during
Ramadan 2021. “He added “We have also conducted targeted
opinion surveys among doctors & mothers regarding the PifPaf
brand. We are mostly proud of managing to break inhibitions
& psychological barriers preventing users from seeking sexual
healthcare, as well provide them with easy access to critical
information. Free & virtual health consultations were made
available, thanks to Durex’s sponsorship; enabling users to receive
a reliable medical opinions, confidentially and securely.”
On Reckitt’s part, Marketing Director of Reckitt Middle East,
Mr. Imran Yousuf stated: “At Reckitt, we want to use the power
of our brands to protect, heal, and nurture individuals, families,
and communities to live cleaner and healthier lives through our
products and initiatives. Our brands like Dettol, Strepsils, Gaviscon,
and Durex have a clear purpose and role to play in society
and with a platform like Altibbi, we can educate consumers
better on the immediate line of action for prevention and treatment
when it comes to common health concerns. We have a
commitment to invest & support the digital transformation e.g.
telemedicine in the region, and we are glad to be a founder partner
with Altibbi to help people in the Arab world”
Through applying the latest communication technology innovations,
Altibbi platform strives to provide distinguished
telemedicine consultations in all medical specialties; especially
those that affect common health concerns, treatment,
and prevention methods. Altibbi’s telemedicine services
also cover cases where paying a visit to the doctor’s office is
not required, as well as some other cases of sensitive and
a highly-private nature. The offered services take several
optional forms; be it direct contact with specialists via phone
calls, video chats, or text. Users also get to review on-site
articles & webisodes; all at their convenience and at reasonable
prices.
Danone and FAO collaborate to improve nutrition and agricultural practices in Egypt
Danone signed a partnership with The UN-Food
and Agriculture Organization (FAO) aiming at improving
nutrition, agriculture practices and food safety
across Egypt for more sustainable food systems.
The collaboration involved exchanging the most
recent information on developing food safety problems
as well as sharing data on food consumption
and nutritional intakes in order to enhance awareness
and encourage the adoption of better eating habits in
Egypt as a pilot nation.
Furthermore, it included exchanging information
about food systems and nutrition security through
the FAO’s provision of e-learning courses and digital
certification to Danone employees; and promoting
compliance with the Sustainable Development Goals
(SDGs) and responsible corporate behavior in global
agricultural supply chains.
“The collaboration will reinforce the company’s
goal to promote health through food to as many people
as possible through its products,” Mr. Haitham
Sadek, General Manager and Managing Director at
Danone Egypt. “We have a clear set of long-term
objectives that contribute to the United Nations’ 2030
SDGs and inspired by our ‘One Planet. One Health’ vision.
Through these goals, we pledge to, among other
things, impacting Egyptian’s health, laying the groundwork
for healthy generations,” he added.
The UN-FAO Agency and Danone recognize that
sustainable food and farming practices need to be
strengthened, and people need to have access to
more diversified and healthier nutritious meals. “This
partnership will assist in promoting efforts to enhance
food security and nutrition as well as improve
the sustainability of food systems,” FAO Director-
General Qu Dongyu emphasized.
With a plant in Obour city and a world-class dairy
plant in Nubariya city, Danone Egypt, a subsidiary
of Danone company, has many positive contributions
to the Egyptian society that support healthier
lifestyles.
64 July-August 2021
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Bayer Middle East supports German Red
Cross on a COVID-19 humanitarian aid initiative
in Lebanon
Bayer Middle East announced its support to the German Red Cross providing
humanitarian aid together with the Lebanese Red Cross for vulnerable
families through public health services in Lebanon in the context of COVID-19.
The partnered initiative provides financial aid via the German Red Cross to the
health program of the Lebanese Red Cross, which supports communities in
need of health services and resources. To achieve this, Bayer Middle East will
support the German Red Cross program funded by the Federal Foreign Office
of Germany with a donation of EUR 25,000.
In addition to the economic crisis and civil unrest, Lebanon is also affected
by the COVID-19 pandemic. The humanitarian project was crafted to support
the community in Lebanon through health services to help ease the COVID-19
pandemic. In 2020 only, the project benefitted 155,000 people directly and
650,000 people indirectly and now aims to target around 850,000 people of
the most vulnerable communities in need.
The project tries to capture the complexity of context and existing situation
with a multi-sectoral support approach to the Lebanese Red Cross. Most of
the targeted groups will be aided with health-related relief, basic assistance,
and resources, such as COVID-19 awareness sessions, emergency medical
services, food parcels, hygiene kits, recreational kits, disinfection material
for families, training of Lebanese Red Cross volunteers, and cash assistance
given to the vulnerable Syrian refugee communities and Lebanese families in
need.
Samer Al Faqih, Managing Director Bayer Levant &Commercial Area Head,
Jordan & Lebanon stated, “Bayer Middle East is honored to play a role in supporting
this public health initiative and helping the devastated communities
in Lebanon. We are grateful to have the opportunity to assist an organization
such as the German Red Cross, responding to the critical health needs to
achieve a shared vision of improving public health. At Bayer, we believe in
our vision “Health for all, Hunger for none”. This essential initiative will help
us realize the heart of our promise through increasing access to health and
supporting awareness.”
Sami Joost, Head of Communications, Public Affairs, Science & Sustainability
(PASS) – Bayer Middle East, added, “We are particularly proud to have
been given the chance to participate in this public health initiative, which
helps support a much-needed program with resources that aid the underserved
people of Lebanon by continuing the important work being executed
on-ground. At Bayer, we are always keen to fulfill our role as a diligent corporate
citizen, that partakes in regional cooperation that is integral during
this pandemic, particularly in light of the ongoing socioeconomic challenges
in Lebanon.”
Youtube Kids: Summer on
your terms and theirs
Top 4 Parental Controls:
With the summer season officially in full swing,
many parents wonder how they can tailor their
children’s viewing experience on YouTube Kids,
which launched in MENA in April this year. YouTube
Kids is an app built with families in mind, offering a
range of parental controls to help parents customize
their children’s viewing experience based on
their needs. The app offers a range of content for
children under the age of 13 along with parental
controls to customize their children’s experience.
Here are four of YouTube Kids’ most helpful features:
•Hand-pick content
Parents can choose to select which videos,
channels or collections they want their children
to watch on YouTube Kids. You can change the
settings by visiting settings, selecting the child’s
profile and then selecting approved content only.
You’ll then see a range of channels, collections and
videos for you to choose from.
•Search Off
If you would like to restrict your child’s experience
to a more limited set of content, you can turn
off Search using the parental settings. With Search
off, your child can’t search for videos, and your
child is limited to videos from a set of channels that
have been verified by YouTube Kids.
•Block content
You can customize content you see in the You-
Tube Kids app by signing into the app and blocking
videos or channels you don’t want your child to
watch.When you block a video or channel, you will
no longer see that video in the YouTube Kids apps
when you are signed in. You can always clear your
blocked videos and channels from Settings if you
change your mind. Please note that when you block
a specific video, it may still be available in the app
if it has also been uploaded by a different channel.
•Time’s Up! Set a timer
Let us be the bad cop. Our built-in timer lets parents
limit screen time by telling kids when it’s time
to stop watching. The timer will display a friendly
“Time’s up” alert and stop the app when the session
is over. Tap the lock icon and from there, select
“timer” and use the slide bar to set a limit.
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65
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Capiter eyes $1 bln in revenue by 2023
Capiter, a B2B marketplace that brings together FMCGs, wholesalers,
and merchants on one platform, announced its plans to
achieve total revenues of USD 1 billion by 2023. This comes as part
of the company’s ambitious strategy to increase its business tenfold
capitalizing on the remarkable results the company achieved in
2020 despite the COVID-19 pandemic.
By bringing together FMCGs, wholesalers, and merchants,
Capiter introduces a new concept to the Egyptian retail market
through one platform with three different applications. These applications
provide several features that help merchants to gain
insights into the FMCG market, allowing them to develop their
projects and boost their work output. With cutting-edge technology
and machine-learning algorithms, Capiter aims to digitalize Egypt’s
conventional commerce to enhance the efficiency of the whole supply
chain by delivering a fast, high-quality, and user-friendly service.
“We were driven by an ambitious vision to serve a broad segment
of the Egyptian market, which is the FMCG as one of Egypt’s
most important sectors responsible for creating more jobs in
the local market,” said Mahmoud Nouh, CEO of Capiter. “This has
helped us create hundreds of job opportunities for youth across
different sectors. At Capiter, we are always keen to support Egypt’s
labor market by bringing the best talents from across the globe
while giving the chance for young talents and fresh graduates. We
aim to capitalize on the enormous growth the e-commerce sector
has achieved as Egypt takes steady strides towards digital transformation
across all fields,” he added.
Capiter currently provides its services in Cairo and Giza with aspiring
plans to expand geographically in Egypt and cover additional
cities and governorates in addition to increasing the number of
items offered through the platform to more than 30,000 products
by 2023.
“Since we launched our operations last year, we have successfully
expanded our customer network through numerous partnerships
with various companies and government entities allowing
us to serve thousands of merchants and complete millions of
transactions,” said Ahmed Nouh, Chief Operating Officer at Capiter.
“This achievement can be mainly attributed to our unique platform
that offers fast, high-quality, and user-friendly services at the best
prices for all elements of the supply chain through a well-trained
team of more than 800 employees,” he added.
Capiter strives to provide promotional services for all items on
display by highlighting the top-selling products to give consumers
insights into the quality of products they are purchasing. By providing
studies and information on market demands from merchants
and FMCGs perspective, Capiter plans to provide a holistic view of
the market in terms of opportunities and challenges addressing
some of the merchants’ problems such as pricing variance, inadequate
payment terms, poor demand on a number of products and
other factors that negatively affect the merchants. The platform enables
online purchasing, applying for finance, provides a diversified
portfolio of products in addition to technical support for merchants.
It is worth mentioning that the demand for digital payment services
has increased dramatically as a result of the COVID-19 pandemic.
As a result, e-commerce sales in Egypt jumped by 80% and
15% of Egyptian businesses reported a surge in their online sales
compared to pre-pandemic levels. According to a recent report by
the MCIT, the ICT industry was the fastest growing in Egypt during
the fiscal year 2019-2020, with a growth rate of 15.2%, valued at
EGP 108 billion compared to the previous year, and contributing
4.4% to the country’s GDP.
Ramses Hilton Won the “Spirit of Hilton Award”
We are delighted to announce that Ramses Hilton has
won the “Spirit of Hilton Award” during the Global Week of
Engagement 2021 in recognition of the Hotel Commercial
Team continued commitment in making Ramses Hilton
one of the leading hotel in the Hospitality Industry.
During the week the Hotel Commercial Team has
planned lots of activities and initiatives from intensive
sales calls, clients’ meetings to Hotel orientations for the
hotel top accounts to energize and inspire hotel clients to
rise to the possibilities of travel again and to welcome our
customers back and finally make new memories at our
Hilton properties around the world.
The week was ended by a community activity, where
the Hotel General Manager Soha El Torgoman jointly with
the commercial team has paid a visit to “ESMA” charity organization
for animals’ shelter and spend the day feeding,
playing and taking care of the animals.
66 July-August 2021
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Amazon to Launch Amazon.eg Later This Year
Today, Amazon announced that it will be launching Amazon.eg
in Egypt later this year, giving local businesses the opportunity to
reach more customers across the country. In preparation for the
new site, Amazon has announced that Amazon Seller Central, the
company’s seller management tool, is now open for registration
in Egypt via sell.amazon.eg, where they can set up their accounts.
Selling partners already selling on Souq.com, an Amazon company,
can now access Amazon Seller Central. The company is
inviting them to experience the new features of the seller tool and
validate their account information to begin selling on Amazon.eg
as soon as the site is launched. Local businesses ready to begin
selling online with Amazon for the first time can also register their
accounts via sell.amazon.eg.
“The introduction of Amazon Seller Central in Egypt is a key
milestone in our journey to continue supporting local Egyptian
businesses of all sizes, delivering greater opportunities to help
them grow and connect with millions of customers,” said Omar
Elsahy, the general manager of Amazon and Souq.com in Egypt.
“With a wealth of great retailers, sellers, brands, and handicrafts,
we are excited to be working hand-in-hand with the industrial
sector in Egypt to continue serving customers across the country.
Their success is our success, as we remain committed to providing
customers with a great shopping experience supported by what
they tell us they value the most—low prices and vast selection,
paired with fast delivery.”
Amazon’s business model is built around providing customers
with more selection, which means the company champions and
empowers third-party sellers. Today, small and medium-sized
enterprises account for more than 50% of everything on Amazon’s
online stores globally. To fuel the success of selling partners on
Amazon, the company offers a range of tools and programs to
help them grow their business like never before. Among many new
possibilities, they can create campaigns to drive discoverability for
their products and run promotions in the form of coupons any time
of the year. Additionally, sellers can choose from various easy and
stress-free fulfillment strategies when shipping orders to customers,
including Fulfillment by Amazon (FBA), whereby they send
their products to Amazon’s fulfilment center and let Amazon take
care of the rest.
Elsahy said: “The largest household brands, as well as emerging
ones, all sell on Amazon globally, and we’re excited to bring this
experience to the thousands of diverse sellers in Egypt in preparation
of the launch of Amazon.eg.” He continued “Amazon already
has a wide fulfillment network across Egypt and, with FBA, sellers
are now able to store their products in Amazon’s fulfillment centers
for faster customer shipping at the time of the launch of Amazon.
eg.”
Amazon has been operating in Egypt since 2017 through Souq.
com, an Amazon company, and it continues to deliver a great
experience to customers and selling partners in Egypt. Amazon’s
commitment to serving customers in Egypt is reflected in its robust
local operations, which have continued to develop since the
acquisition. Amazon operates a widespread local logistics and operations
network across Egypt, including its main fulfilment center
supported by 15 delivery stations across the country. Amazon also
has established corporate and customer services offices, and a
total local workforce of over 3,000 across corporate, customer service,
and operations in Egypt.
To learn more about selling on Amazon in Egypt, visit sell.amazon.eg.
www.BusinessTodayEgypt.com July-August 2021
67
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Sir Geoffrey Adams steps down as Britain’s Ambassador to Egypt
The British Egyptian Business Association held an event to bid
farewell to Sir Geoffrey Adams, British Ambassador to Egypt. It
was attended by HE Dr. Mohamed Maait, Minister of Finance, HE
Eng. Yehia Zaki, Chairman, Suez Canal Economic Zone, Dr. Ahmed
Kamaly, Deputy Minister of Planning and Economic Development,
and Ambassador Hazem Khairat.
Sir Geoffrey Adams has officially announced that he will leave
his position in August 2021, after serving as British Ambassador,
since September 2018. Sir Geoffrey began his diplomatic career in
1979 and served as the British Ambassador to the Netherlands,
as British Ambassador to Iran, and as the UK Permanent Representative
to the Organization for the Prohibition of Chemical
Weapons (OPCW) prior to his assignment to Egypt.
The event featured welcoming remarks from Khaled Nosseir,
BEBA Chairman, followed by a speech from Sir Geoffrey. It concluded
with a recognition from Khaled Nosseir on behalf of BEBA
and a gift presented on behalf of Dr. Hala El Said, Minister of Planning
and Economic Development, by Dr. Ahmed Kamaly, Deputy
Minister of Planning and Economic Development, and Ambassador
Hazem Khairat.
In a statement, Sir Geoffrey said: “It has been a privilege to represent
Britain in Egypt for the past four years. Britain and Egypt
have a long history of strong bilateral ties and it is my honor to
have played a part in strengthening these ties during my term.”
Khaled Nosseir, Chairman of BEBA, stated in his welcoming
remarks: “It has been a pleasure working with Sir Geoffrey and
the team at the Embassy. His contribution in enhancing Egyptian-
British relations has been invaluable, both in supporting private
sector businesses as well as sectors concerned with Egypt’s
socio-economic development.”
Sir Geoffrey brought unprecedented expertise to the country
through his position as the Deputy Head of Mission in Egypt
from 1998 to 2001. His other previous posts, in a long and distinguished
career, included serving as Director General (Political)
at the FCO, Director for the Middle East and North Africa, Consul
General in Jerusalem, and Principal Private Secretary to the Secretary
of State for Foreign and Commonwealth Affairs.
Raya CX launches FutureTECH accelerator powered by Openner to scale tech startups
in the customer experience domain with investment of up to EGP 1M per startup
Raya Customer Experience (RCX), one of Raya Holding’s companies,
has announced launching its first Corporate Accelerator “Raya FutureTECH”,
powered by the venture builder, Openner.
Raya FutureTECH will power early-stage tech startups that have a minimum
viable product or a solution that addresses a problem in the customer
experience field across all industries. The accelerator’s mission relies on
Raya CX’s strategic vision to drive innovation and digital transformation of its
services and solutions to keep up with the evolving customer expectations
in digital-oriented industries via implementing CX best practices.
Raya FutureTECH has opened the call for its applications till July 31st on
its website www.rayafuturetech.com. After going through the selection process
and a three-day bootcamp, Raya FutureTECH will
announce up to 10 startups that will each receive a cash
investment of up to EGP 1M alongside hands-on support
to scale their business from Openner, the program’s
main partner, in addition to gaining access to Raya CX’s
technical capabilities, customer experience expertise,
and its wide and diverse client base.
The accelerator also provides hands-on design sprints, technology support,
tailored growth plans, and 1-1 coaching for startup founders, guided by
Openner’s expert team. In addition, Raya allocated a team to work hands-on
with participating startups to facilitate more cooperation between Raya’s
stakeholders and the founders.
“We are thrilled to announce the launch of Raya FutureTech in parallel
with Raya CX’s new vision, which aims at encouraging and enabling more
digital transformation and fueling innovation. We started from the comprehensive
development of our internal operations, increasing the share
of technology, and activating more solutions to revolutionize the customer
experience, and now we continue this journey by launching a startup accelerator
that supports emerging technology startups and stimulates innovation,
in addition to enhancing cooperation between tech corporations such
as Raya CX and the startup landscape,” said Ahmed Refky, CEO of Raya CX.
He also added that the collaboration with Openner will help in achieving
the accelerator’s goals through co-investment, designing the best selection
criteria for the participating companies, and providing well-rounded handson
support to the future founders.
Raya Holding’s Head of Venture Investments, Mohamed Nazir stated
that, “The goal of establishing FutureTECH is to power techstartups and
fuel entrepreneurship in the Egyptian Market. We are looking to welcome
the founders that have a vision on how to contribute
to the improvement of customer experience across
all industries. The program comprises all the tools and
workshops needed for these startups to scale their
businesses in addition to the investment that will enable
the application of this knowledge turning it into tangible
outcome.”
Openner’s Managing Director Ahmed Elsherif expressed his thrill about
partnering with Raya CX, “Along with Raya CX, Openner aspires to build a
unique portfolio of tech startups through FutureTECH. We are also looking
to power the growth of founders to enable them to positively contribute to
the domain’s needs and future.”
Elsherif also pointed out, “This partnership comes in light of Openner’s
focus on partnering with leading corporations to help them identify new
business models and investment opportunities. We work with our partners
to co-create, co-invest in, and launch a continuously evolving pipeline of
domain-specific tech startups.”
68 July-August 2021
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The Giant French Transport Operator RATP Dev Mobility Cairo Takes Over Metro
Line 3 in Cairo
Cairo Metro Line 3 is witnessing a major shift and approaching a
new benchmark in optimizing the efficiency and quality of the services
offered to local passengers, being operated and maintained
by the French Transport Operator Giant RATP Dev Mobility Cairo
(RDMC) under the patronage of the National Authority for Tunnels
(NAT).
“As a leading global public transport operator, we are proud to
support the Egyptian authorities in their vision of the city of tomorrow
and the transformation of the urban landscape,” highlighted
Laurence Batlle, President of the Executive Board of RATP Dev.
The French company has considered many measures to provide
the passengers with a world-class experience including user-mobile
app and website to facilitate tracking real-time information on stations
and unified staff uniforms. Residents of Cairo can now enjoy a
line that will improve progressively to be more efficient, innovative,
and sustainable in accordance with international standards.
In alignment with the company’s values, RDMC looks forward to
promoting the cultural and artistic heritage of Egypt through a modernized
graphic identity, aiming to revive the passengers’ memories
of Egyptian epic history throughout various time eras. The prototype
was presented in Heliopolis station where the ‘A New Start for line
3’ Event took place in the presence of Egyptian Minister of Transport
H.E. Lieutenant General Kamel Al Wazir, H.E. Stéphane Romatet,
French Ambassador to Egypt, Dr. Engineer Essam Wali, Chairman of
the National Authority for Tunnels and Laurence Batlle, President of
the Executive Board of RATP Dev.
This cooperation between the Egyptian government and the private
sector is inking a new era in the future of urban transport. With
carefully curated co-ambitious plans that have been set to boost the
local economy, RDMC is committed to hire a minimum of 90% local
workers of its staff and train them in a global training centre to transfer
precise and international expertise.
Palm Hills Club Raises the Bar for the Tennis
Future in Egypt by hosting the Rafa Nadal
Academy’s Camp on its fields
As tennis starts to become an indispensable sport in Egypt with its
increasing popularity day after day, the fans of the game highly anticipate
the emergence of more Egyptian tennis champions participating in wellknown
international tournaments representing their country. Palm Hills
Club has contributed to shaping the talented Egyptian youth to take their
very first step towards this dream by establishing a major milestone to develop
their capabilities through dedicating its field to host the one and only
Rafa Nadal Academy’s six-day training camp. Such intensive camp is taking
place for the first time in Egypt, therefore it was graced by the Spanish
Counsel General Gonzalo Munoz. Furthermore, this camp would greatly
contribute to preparing the upcoming generation to occupy advanced positions
in international ranking in the future.
The camp aims to focus on bracing the future generations of different
regions by targeting children in each selective country aged between 8 to
14 years old with average age being 11 years. Ahmed Hassanein, Head of
Commercial at Palm Hills & Clubs General Manager said: “in light of Palm
Hills’ eagerness to contribute to Egypt vision 2030 through investing in
developing sports talents. We dedicated our club to serve as the ultimate
means by opening its tennis court for Rafa Nadal Academy to run its training
camp for the Egyptian Youth.”
Hassanein further adds: “the mission of this one of a kind collaboration,
which is managed by The Tennis Club Egypt, is to lend these young talents
a helpful hand to unleash their potential in tennis by granting them the
golden opportunity to leverage on the unique training resources of Nadal
Academy that is coming to Egypt for the first time.”
The children receive an exceptional experience from four professional
Spanish coaches that the academy has provided, who also happen to be
dedicated strength & conditioning trainers to train them on the values that
Rafa Nadal has transmitted on and off the court during his professional
circuit. Moreover, five top Egyptian coaches will be present on ground to
support the Spanish coaches in running the camp. What makes this camp
very special is its unique access to the academy’s training philosophy
on modern and creative tennis allowing the participants to benefit from
highly focused training sessions and special insights that extend beyond
the court.
The academy has developed a well-thought-out program for the intensive
six-day camp to prepare the players as per its comprehensive criteria
to reach the optimum level.
The day started with a morning match, followed by endurance training
within the Fitness Skill Zone. The academy also ensures distributing
a healthy meal encompassing all the necessary nutrition, which comes in
line with the program’s mission to prepare children to become athletes.
Then, the day is complemented by the main event “Building a Champion”
program, which includes various workshops that focus on mental training.
At the end of the program, participants will receive an evaluation with
valuable insight into their current performance, and a development plan to
improve their game once they return to their academy or school.
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Mountain View Announces
Completing
iCity’s Phase I
During the visit, the Prime Minister inspects the executed housing
units, as well as the finishing works, utilities, and green spaces,
in addition to the project’s clubhouse.
Madbouly stresses that the iCity project is the fruit of a successful
partnership between the public and private sectors, as the relationship
between both sectors is no longer limited to just allocation
of land plots or delivery of utilities.
For his part, El Gazzar points out that the Ministry of Housing,
represented by NUCA, has expanded during the past six years in
offering land plots for development in partnership with the private
sector, which is part of the ministry’s plan to diversify the mechanisms
of land offering, and to maximize the investment value of
land plots in a sustainable manner.
Moreover, the minister remarks that the number of partnership
projects between the public and the private sectors has so far
reached 18 projects on a total area of 19,250 acres. The first phase
began from 2015 to 2017 and included about nine projects on a
total area of 13,243 acres, with total investments of EGP 315 bn.
He further continues that the second phase was from 2017 to
2019 with seven projects located on an area of 4,997 acres, and
with investments estimated at EGP 150 bn. Meanwhile, the third
phase has begun this year on an area of 5,000 acres, and with investments
of EGP 500 bn.
Additionally, El Gazzar points out that the iCity project is located
on an area of 500 acres, with investments estimated at EGP 65 bn,
besides it provides numerous direct and indirect job opportunities,
noting that the project’s first phase was launched in mid-2016.
In this regard, Amr Soliman, Chairman & CEO of Mountain View,
expresses his great appreciation for the visit of the Prime Minister,
saying, ”This confirms the government’s interest and confidence in
the private sector as an essential partner in the development plan.
This project is the result of the successful cooperation between the
government and the private sector, and it enhances future opportu-
nities for partnership with the government.”
Soliman mentions that Mountain View intends to deliver 600
units in the project during the next two months, in addition to 1,800
units, as part of the first phase, by the end of this year. In a related
context, Soliman explains that the iCity project is the first one of its
kind to be implemented in a four-dimensional system, identical to
the international standards.
The project is executed in four levels, taking into consideration
the environmental standards and includes smart solutions to
separate the vehicles’ road from the residential areas. It also provides
solutions for electricity consumption and supports smart
infrastructure by connecting fiber-optic networks, to ensure the
speed and quality of communications and information technology.
Besides, it provides new smart solutions to create traffic liquidity
for the population, in addition to providing the latest transportation
means.
During the visit, Mountain View has announced its latest partnership
with the Intercontinental Hotels Group, to manage and operate
the project’s hotel apartments according to international standards.
Accordingly, the Intercontinental Hotels Group will be responsible
for the management of Mountain View’s tourist projects, hotels,
and hotel apartments.
Moreover, Mountain View signed a strategic cooperation agreement
with Huawei Technologies to develop technological infrastructure
in the iCity project to become the first smart interactive
city in Egypt with investments exceeding USD 1 mn.
The iCity Project has been implemented by Mountain View, in
partnership with the Ministry of Housing, Utilities, and Urban Communities,
represented by the New Urban Communities Authority
(NUCA). During the visit, Madbouly was accompanied by Assem El
Gazzar, The Minister of Housing, Utilities and Urban Communities,
Amr Soliman, Chairman & CEO of Mountain View, and a number of
company officials.
Badya launches with stunning
Sahel party
Beautiful Nelly Karim made her stunning appearance
by joining Mostafa Amar on stage, earning
everyone’s undivided attention during Badya
Palm Hills Developments exceptional summer
night party at Kiki’s beach, with Disco 90’s perfectly
setting the tone for a nostalgic world.
The City of New Worlds took us for a trip by
having the iconic Mostafa Amar give a full on
performance, featuring a series of his favorite
throwback songs that evoked the 90’s feeling
sending the Sahel’s crowd frenzy summer vibes,
people got to join the wave of summer happiness!
70 July-August 2021
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GROHE supports the “Make a Splash!” partnership between LIXIL and UNICEF to
improve access to sanitation and hygiene for underserved communities
Going to the toilet, washing our hands – these are daily routines that
we don’t think much about. For most of us, sanitary
facilities with clean water are a matter of course,
but many across the globe are facing a different
situation: Two billion people lack basic sanitation,
673 million practice open defecation regularly and
40% of the world’s population do not have access
to handwashing facilities and soap at home. As
a result of unhygienic water and sanitation, 700
children under five die every day from diarrheal
diseases. The lack of sanitation services also has
a particular impact on women and girls who are
exposed to the threat of violence and harassment,
and the COVID-19 pandemic has exacerbated the
vast inequities in access to water, sanitation, and
hygiene.
In 2018, UNICEF and LIXIL created a bold, new
partnership called “Make A Splash!” – UNICEF’s first
global shared-value cooperation in water, sanitation,
and hygiene (WASH). It combines UNICEF’s
WASH sector leadership with LIXIL’s global expertise
in toilet design and innovation to tackle the
sanitation and hygiene crisis.
As part of LIXIL’s brand portfolio, GROHE is
launching its “Energy for Life” campaign, which
will take place from June to August in 13 countries
across EMENA to raise awareness and support
partnership activities: GROHE will donate 20 EGP
for every participating GROHE shower system or
thermostat shower system purchased to help provide
a child with access to a toilet at home or a
school with bars of soap.
“LIXIL makes better homes a reality for everyone,
everywhere. As a global organization, sustainability
is at the heart of what we do, and we have
the responsibility to leverage our expertise to make a positive impact
on the world. But sadly, access to basic sanitation and hygiene remains
one of the greatest challenges today, and LIXIL is committed to make
toilets and handwashing accessible for all through its diverse and inclusive
brand portfolio. GROHE has always supported the ‘Make a Splash!’
partnership through multiple internal fundraising activities but today
I take great pride in reaffirming our support with the ‘Energy for Life’
campaign, that invites end users to help drive change,” says Jonas Brennwald,
Leader LIXIL EMENA and Co-CEO Grohe AG.
“Growing up in a clean and safe environment is every child’s right.
Basic toilets and hand washing facilities at home and school are critical
to keep children healthy and prevent the spread of disease. We appreciate
GROHE’s support to the LIXIL and UNICEF ‘Make a Splash!’ partnership
which will help to ensure more children have access to clean, safe
toilets and hand hygiene so they lead healthier lives”, says Carla Haddad
Mardini, Director, Private Fundraising and Partnerships Division, UNI-
CEF.
A bold mission: LIXIL and UNICEF are tackling the sanitation crisis
The “Make a Splash!” partnership contributes to the Sustainable Development
Goal target 6.2 “to achieve access to adequate and equitable
sanitation and hygiene for all, and end open defecation, paying special
attention to the needs of women and girls and those in vulnerable situations.”
GROHE will support the work of LIXIL and UNICEF to rehabilitate
WASH facilities and promote good hygiene practices in at least 10
primary health facilities, helping 200,000 children and their families stay
healthy by improving access to clean sanitation and hand washing and
promoting safe hygiene habits., The partnership between LIXIL and UNI-
CEF builds on their strengths to realize a shared ambition to tackle the
global sanitation crisis.
As UNICEF changes people’s attitudes about open defecation and the
use of poor, unsafe facilities, people are demanding better sanitation and
hygiene services. LIXIL helps meet this demand through its SATO toilet
products, which provide safe, affordable and sustainable solutions for
communities to improve and sustain proper sanitation and hygiene.
In response to the COVID-19 pandemic, LIXIL devised the SATO
Tap, an affordable and innovative handwashing station for low-income
households that lack access to running water. The SATO Tap consists
of a plastic base with a soap holder and a nozzle that can be fitted with
widely available plastic bottles. It can be operated with a simple nudge,
ensuring minimal contact and releasing just enough water to practice
safe hygiene.
SATO toilets were first introduced in 2013. Featuring a counterweight
trap door that helps prevent unpleasant odors and insects, a SATO toilet
consumes 80% less water to flush than a conventional toilet. SATO aims
to be a self-sustaining social business by establishing a local Make, Sell,
Use cycle in the community – creating jobs and allowing local manufacturers
and stakeholders to continue the business independently to help
communities continuously improve sanitation.
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71
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YouTube Shorts arrives in Egypt
YouTube announced the arrival of the beta version of YouTube
Shorts in the Egypt, the company’s new short-form video experience
to create short, catchy videos from mobile
phones. First announced in September 2020,
YouTube has since expanded Shorts to 26
countries and will now be available across
more than 100 countries - including countries
in the Middle East and North Africa
- where YouTube is available.
While short form videos were already
viewable in the platform, people around the
world will be able to access for the first time
Shorts’ creation tools which include a multisegment
camera to string multiple video
clips together, the ability to record with
music, control speed settings, and more. In
addition, and timed with the product’s international
expansion, we’re bringing a new set
of features to the existing ones such as:
•Add text to specific points in your video
•Automatically add captions to your Short
•Record up to 60 seconds with the Shorts camera
•Add clips from your phone’s gallery to add to your recordings
made with the Shorts camera
•Add basic filters to color correct your Shorts, with more effects to
come in the future
The new features also include the ability to
sample audio not only from other Shorts but
also from videos all across YouTube -- which
includes billions of videos worldwide -- unlocking
a new playground of creativity like
never before. This means that users can give
their own creative spin on the content they
love to watch on YouTube and help find it a
new audience — whether it’s reacting to their
favorite jokes, trying their hand at a creator’s
latest recipe, or re-enacting comedic skits.
Creators will be in control and will be able
to opt out if they don’t want their long form
video remixed.
Supporting mobile creators
YouTube has helped an entire generation
of creators turn their creativity into businesses
and become the next generation media companies. Over the
last three years, we’ve paid more than $30 billion to creators, artists,
and media companies.
SOMABAY Witnesses International School Inauguration Thriving with Educational
Services Across Red Sea Governorate
Egypt Education Platform, the leading education services provider
in Egypt and Somabay announced signing a Memorandum of Understanding
to develop and operate the first international school in
Somabay under GEMS International Schools stream-EEP.
The cooperation aims at providing quality educational services for
the local community and the cities in the Red Sea governorate.
Ibrahim El Missiri, CEO of Abu Soma Development Company commented:
“Our long-term vision is to develop Somabay as a permanent
fully integrated residential community, which also goes in line
with Egypt’s 2030 vision, creating sustainable communities across
Egypt. We are very excited to commence our first school project with
GEMS International Schools under EEP, as a reputable education
partner to develop and manage the school, ensuring a top-quality
education model provided at Somabay; so we can maximize the
value of our prime location by attracting interest of families from
all over the Red Sea governorate looking for a quality neighborhood
education.”
Ahmed Wahby, the CEO of Egypt Education Platform said: “We
are committed to our expansion plan ensuring we touch the lives
of many families across Egypt, via providing a world-class education
service. The partnership with Somabay is another milestone in
our progressive strategy to continue pursuing new opportunities by
which we utilize our global expertise serving different communities
and segments. This includes international educational benchmarks,
advanced information technology infrastructure, academic and operational
experience, and distinguished training capacities.”
“Our plan for the new school is to create long-term value through
conveniently-located quality education provision, which contributes
to Somabay turning into a permanent residential destination rather
than just being a seasonal touristic attraction” Wahby added.
Egypt Education Platform (EEP), the full-fledged educational platform,
comprises several independent streams that cater to different
segments in the educational market. This includes GEMS International
Schools, Prime National Schools, Hayah Schools Enterprise
and two other streams to be launched and announced soon.
The latest agreement with Somabay is a testament to the record
of success that EEP has been demonstrating on all streams’ levels.
Somabay’s school project, apart from its strategic importance derived
by the prime location, is the third accomplishment in a row for
EEP, post a major partnership with The Sovereign Fund of Egypt to
develop and operate two schools in West Cairo with a total capacity
of 5,000 students, followed by a featured integration with Haya
International Academy, as an independent stream under the platform.
The newly developed school in Somabay will officially launch in
September 2023 under the GEMS International Schools stream and
following an international curriculum.
72 July-August 2021
www.BusinessTodayEgypt.com
bt scene
ZED Club Launches Its New
Women’s Football Academy
ZED FC Club, one of Egypt’s top private clubs, announced today the inauguration of ZED’s
Women Football Academy, in partnership with “Empower Women Football Academy”. Through
this partnership, ZED FC Club aims to establish its first football team for women, develop highperformance
athletes, and spread the message that football is a game for women too. This
collaboration aligns with ZED FC’s strategy to introduce a variety of new sports and develop
high-level sports academies. The new cooperation falls in line with Egypt’s vision 2030 aiming
to promote sports as well as enhance youth participation in shaping the future of their country.
ZED Club chose Farida Salem’s “Empower” Football Academy to manage the new academy
to utilize its vast experience in identifying potential talents and following analytical training programs
that help boost the skills of female football players. Farida Salem, founder and director
of “Empower Football Academy”, is an inspirational former football player who has been coaching
for 12 years, with ambitious goals to dispel old beliefs about sport and laying the foundations
of a new generation of athletes which aligns with ZED’s strategy.
“The club is constantly keen to create an effective sports system by introducing various
unconventional sports and laying the groundwork for a new generation of top-level athletes,”
Ahmed Abdullah, the Head of the football sector at ZED club stated. “We are not only interested
in local championships, but also in preparing a new generation with worldwide standards capable
of competing on a global scale. Therefore, we have collaborated with Farida Salem who
is one of the most efficient women’s football coaches because of her experience in the sports
field and the value she can add to the ZED Women’s Football Academy,” he added.
Farida Salem started playing football at an early age and pursued her dream in Canada’s
Vancouver Island University where she received a BA in sports and physical education. Moreover,
she is the first Egyptian woman to play in the Abu Dhabi team.
“I am extremely delighted to cooperate with ZED to launch the New Women’s Football Academy,”
Farida Salem, the founder of “Empower” Women’s Football Academy and the head coach
at ZED Women’s Football Academy stated. “I coached hundreds of female footballers over the
last 12 years and I have seen the progress of many gifted young women with extraordinary
talents and tremendous skills through my work at Empower,” she added.
Registration for the ZED Academy is open to children aged 5 to 8 years old as well as juniors
aged 9 to 17 years old. Furthermore, the academy will hold professional tournaments for players
under the age of 17 and under the age of 19 in order to enhance the performance of female
talents until they achieve a professional level that allows them to join the first team of the ZED
women’s football club.
Tamweely Microfinance won “Fastest Growing Microfinance Company” awarded
by The Global Economics UK
Tamweely Microfinance has won The Global Economics Awards 2021
for “Fastest Growing Microfinance Company” and the announcement
was made on the Global Economics website. And Tamweely CEO, Ahmed
Khorched, has also been awarded “Most Emerging CEO in Microfinance”.
Over the last three years, Tamweely Microfinance has grown into a
viable non-banked financial institution serving over 141 thousand client
with a loan portfolio exceeding EGP 3.6 billion of which 46%
are women entrepreneurs and 79% reside in Upper Egypt.
Currently, Tamweely has over 2,000 employees across a
network of 97 branches in 15 governorates in Egypt and
with a strategy to cover all governorates within the next
few years.
The year 2020 was remarkable year as Tamweely has
witnessed growth in terms of clientele, loan portfolio and
branches. In 2020, 73 thousand clients benefited from the
services offered by Tamweely compared to 52 thousand
client in 2019 and this illustrates a growth of 41%. Tamweely’s
gross loan portfolio has grew by 53% in 2020,
booking EGP 906 million against EGP 593 million in 2019. Tamweely disbursed
67 thousand loan in 2020, an increase of 18% from 56 thousand in
2019. Number of branches has grown by 51% in 2020.
Furthermore, Tamweely has leveraged its expansive network to secure
key strategic partnerships with leading FinTech players that have positioned
Tamweely to provide exceptional tech-driven solutions to promote
financial inclusion.
Commenting on the win, Ahmed Khorched, Chief Executive Officer,
Tamweely Microfinance said, “We are honored for the recognition that has
been given to Tamweely Microfinance for its growth performance and it
is a testament to all the efforts that have been made by the employees
during the pandemic. We are constantly striving to enhance our portfolio
with diversified financial services and products that adapt to the needs of
various target micro-entrepreneurs and ensure a unique
client experience.”
Amr Abou El-Azm, Executive Vice Chairman and CEO of
Tamweely, explained “these awards are testaments of the
success story of Tamweely in just a short time; therefore,
I would like to extend my warmest congratulations to
Ahmed Khorched who played a crucial role in our company’s
success and to all employees who significantly
contributed to the company’s competitive position in the
microfinance sector in Egypt.” Furthermore, Abul-Azm
expressed his aspirations to the continuation of the success
in the upcoming coming years and to become the leader of
microfinance sector in Egypt.
The Global Economics Limited is a UK based financial publication and
a bi-annual business magazine giving thoughtful insights into the financial
sectors on various industries across the world. One of their major highlights
is the prestigious country specific Annual Global Economics awards
program where the best performers in various financial sectors are identified
worldwide and honored.
www.BusinessTodayEgypt.com July-August 2021
73
Last Word
“Egypt responded to the COVID-19 crisis with
timely and prudent fiscal and monetary easing,
which helped mitigate the health and social
impact while safeguarding economic stability, debt
sustainability, and investor confidence.”
— the Executive Board of the International Monetary
Fund (IMF).
74 July-August 2021
www.BusinessTodayEgypt.com