DECODING THE

ECONOMICS OF
COVID-19

IN THE KNOW (10)

A monthly economic update

SEP-21
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Website dcodeefc.com Fax +202-25656385

1
In this issue…

01. KEY ECONOMIC UPDATES

02. ANNUAL HEADLINE INFLATION IN JULY 2021

03. REAL SECTOR PERFORMANCE IN 9M 2020/21

04. BOP PERFORMANCE DURING 9M 2020/21

05. EGYPT’S SUSTAINABLE DEVELOPMENT PLAN FOR FY 2021/22

06. EGYPT’S RURAL DEVELOPMENT PROGRAM

07. EGYPT’S 3rd VOLUNTARY NATIONAL REVIEW

08. NEWS HIGHLIGHTS

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 01. KEY ECONOMIC UPDATES
On the real sector

49.1 117.80 7.3%

Egypt’s PMI* fell to 49.1 in July from Egypt’s industrial production The official unemployment
49.9 in June, as output and demand index* increased by 14.5% rate decreased to 7.3% in June
continued to fall for the seventh time m-o-m to record 117.8 in 2021 down from 7.4% in
in eight months due to a “drop-off in June 2021 compared to March and 9.6% in June 2020
domestic spending as clients remained 102.89 during May and was at the peak of COVID-19
hesitant due to ongoing COVID-19 up 13.1% y-o-y compared to lockdown measures.
measures”. Nonetheless, the index 104.14 in June 2020 .
indicated a rise in employment for the
first time since October 2019.
*Index measures business activity in the non-oil *Based on CAPMAS’ field survey that is
private sector; below 50 = contraction, 50= neutral conducted for 401 companies that cover
Source: IHS Markit 60% of the manufacturing activity in Egypt Source: CAPMAS

On the external sector (Trade performance)

+80.3% +20% +35.4%

Total exports saw a y-o-y increase Suez Canal revenues rose Meanwhile, total imports
of 80.3% in May 2021 to record almost 20% y-o-y in June 2021 increased by 35.4% on annual
USD 3.1 bn up from USD 1.7 bn a to record EGP 7.8 bn, up from basis during May 2021 to record
year earlier. EGP 6.5 bn a year earlier, with USD 6.4 bn, up from USD 4.8 bn
the number of ships passing a year earlier.
through the Canal rising by 20%
y-o-y to 1,656 ships in June.
Source: CAPMAS Source: CAPMAS citing Suez Canal Authority Source: CAPMAS

Note: While imports and exports data published by CAPMAS can differ in magnitude from the CBE’s BoP data (yet to be published), we expect the direction to be the same.

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 01. KEY ECONOMIC UPDATES
On the capital & financial account

USD 22.9 bn -USD 4.2 bn USD 134.8 bn

Foreign Holdings of Decline in Banks’ Gross
Foreign Reserves in Gross External
Gov. T-Bills
Mar-Jun’21 Debt in Mar-21

In H1 2021, foreign holdings of
Egyptian T-bills* increased by
USD 5.1 bn to reach a high of USD
22.9 bn in June 2021 compared to
a pre-pandemic level of USD 19.8
bn in February 2020 and a trough
of USD 7 bn in May 2020.
*Doesn’t include foreign holdings of T-bonds
Source: Bloomberg & statements by the Ministry
of Finance (MoF)
Gross foreign reserves of
commercial banks decreased
by USD 4.2 bn during March -
June 2021 to stand at USD
21.9 bn, while CBE’s gross
foreign reserves increased by
USD 0.3 bn during that period
to stand at USD 39.8 bn.*
*Gross foreign reserves of CBE & banks had
declined by a total of USD 18 bn until Apr-20
before increasing by a total of USD 12.1 bn
until Jun-21 (net decline of USD 5.8 bn).
Source: Central Bank of Egypt (CBE)
Gross external debt increased to
reach USD 134.8 bn by the end
of March 2021 (34.7% of GDP)
compared to USD 129.2 bn by
the end of December 2020
(34.0% of GDP) and USD 111.3
bn by the end of March 2020
(30.8% of GDP).
Source: CBE

Other indicators

15.7 75.2 5.4%

The Egyptian Pound has Global Brent crude oil price In July 2021, annual headline
remained broadly stable at recorded USD 75.2 per barrel in inflation accelerated to a seven-
EGP 15.7 per USD during July 2021, reaching its highest month high of 5.4%, up from
August 2021. level since October 2018, 4.9% in June, with F&B inflation
compared to USD 73.2 per barrel accelerating to a two-year high
in June (m-o-m increase of 2.7%), of 4.8% in July (more details on
as steady demand and tight page 5).
supplies calmed concerns about a
new COVID-19 wave.
Source: CBE Source: EIA & Bloomberg Source: CAPMAS

04
02. ANNUAL
Annual headline inflation accelerated to a seven-
month high of 5.4% in July 2021, up from 4.9% in
June, with F&B inflation accelerating to a two-year

HEADLINE INFLATION
high of 4.8% in July. The rise in fuel and electricity
prices has also contributed to such increase.

IN JULY 2021
Meanwhile, the month-on-month inflation rate
recorded 0.9% in July, up from 0.2% in June, also
driven by higher Housing & Utilities and F&B prices.

ANNUAL HEADLINE INFLATION BY CATEGORY IN JULY 2021

(Y-O-Y CHANGE)

Education 20.0%
Recreation and Culture 12.0%
Miscellaneous 7.5%
Transportation 6.6%
Food and Beverages 4.8%
Housing and Utilities 4.1%
Healthcare 4.0%
Furniture and Equipment 3.4%
Alcohol and Tobacco 2.9%
Clothing and Footwear 2.5%
Restaurants and Hotels 1.8%
Communications 0.1% Source: CAPMAS

MONTHLY HEADLINE INFLATION BY CATEGORY IN JULY 2021

(M-O-M CHANGE)
Recreation and Culture 5.0%
Housing and Utilities 2.4%
Alcohol and Tobacco 1.6%
Miscellaneous 1.3%
Food and Beverages 0.5%
Restaurants and Hotels 0.2%
Furniture and Equipment 0.2%
Healthcare 0.1%
Education 0.0%
Communications 0.0%
Transportation 0.0%
Clothing and Footwear 0.0% Source: CAPMAS

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 03. REAL SECTOR
GDP growth from the demand side recorded 2.9% during Q3
2020/21 (Jan-Mar. 2021) compared to 5.0% a year earlier
and 2.0% during Q2 2020/21.

PERFORMANCE IN On September 1st, Planning Minister Hala El-Said announced

that GDP growth recorded 7.7% in Q4 2020/21, accelerating

9M 2020/21 from a contraction of 1.7% a year earlier (details for Q4 are

yet to be published).

Contribution to Real GDP Growth Rate (%)

According to the Ministry of Planning, during Q3
2020/21, growth continued to be mainly driven by Investment Consumption Net Exports
consumption which contributed to real GDP growth by
15%
7.0 PPT, growing in real terms by 7.6%.
10%
1.0%
On the other hand, investment contributed negatively 5%
2.1% 1.0% 2.8% 10.9%
2.2% 1.7% 9.7%
1.0% 3.3% 1.2% 1.3% 3.1% 5.7% 6.1% 6.5% 7.0%
to real GDP growth by -1.6 PPT, deteriorating by 11.3% 0% 2.3% 0.8%
1.5% 2.3% 2.6% 1.5% -1.1%
-3.8% -3.5% -1.6%
on annual basis (with the severity of deterioration -6.8% -1.1% -2.4%
-5% -11.0%
improving over the past quarters nevertheless), and net -2.2%
-10%
exports contributed by -2.4 PPT, worsening by 35.4% on -1.6%
-15%
annual basis, as higher import demand is outpacing the
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
recovery in exports.
2018/19 2019/20 2020/21

Source: MPED

Real GDP (Annual Growth Rate)

GDP at Market Prices (Demand Side) GDP at Factor Cost (Supply Side)
8% Meanwhile, official data revealed 1.5% growth in GDP at
5.3% 5.5% 5.6% 5.7% 5.6% 5.6%
6% 5.0% factor cost (supply side) in Q3 2020/21 compared to
4% 5.4% 2.9% 4.4% growth a year earlier, bringing the 9M supply-side
4.5% 4.8% 4.4% 2.0%
2% 0.7% growth rate to 0.2% compared to 4.6% a year earlier.
0%
1.5% The difference between GDP at factor cost and GDP at
-1.7% 0.4%
-2%
market prices represents the value of taxes and
-1.3% subsidies applied to goods and services included in the
-4% -3.1%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 GDP.
2018/19 2019/20 2020/21

Source: MPED

Sectors’ Performance in 9M 2020/21

9M 2020/21 9M 2019/20
From a sectoral perspective, Communications sector Total GDP (Supply Side) 0.2%
4.6%
recorded the highest expansion among all sectors Communications 16.2%
16.0%
during 9M 2020/21 (16.2%), followed by Construction &
Construction & Building 6.2%
Building (6.2%), Transportation & Storage (5.2%) and 8.7%
Transportation & Storage 5.2%
Wholesale & Retail Trade (4.9%). 4.1%
A closer look at the quarterly sectoral performance Wholesale & Retail Trade 4.9%
4.1%
reveals positive growth of 2.7% in the Extractions sector Agriculture, Forests & Fishing 4.2%
3.6%
in Q3 mainly thanks to a 10% growth in the Natural Gas 4.1%
Real Estate 4.4%
sector. Meanwhile, Tourism, Manufacturing & Suez
Financial Intermediation 3.5%
Canal sectors contracted at a slower pace in Q3 3.5%
compared to previous quarters. Extractions -1.6%
-1.0%
Suez Canal -5.0%
7.1%
Manufacturing -9.8%
6.7%

Source: CBE citing MPED

06
 According to the Central Bank of Egypt (CBE), Egypt’s overall Balance of
Payments recorded an inflow of USD 1.8 bn during 9M 2020/21 (July-March)

04. BOP compared to an outflow of USD 5.1 bn during the same period a year earlier.
On one hand, despite an improvement in petroleum imports and remittances
and a gradual recovery in non-petroleum exports as shown below, a

PERFORMANCE continued deterioration in Tourism receipts, and an increase in non-petroleum

imports that outpaced the recovery in exports, in addition to lower petroleum
exports have all led to an 81.2% deterioration in the current account deficit to

DURING 9M 2020/21 record USD 13.3 bn up from USD 7.3 bn a year earlier. Meanwhile, the Capital
and Financial Account recorded an inflow of USD 17.1 bn, up from USD 4.1 bn
a year earlier, despite lower foreign direct investments, mainly supported by
rebounding portfolio inflows as well as foreign borrowing.

Contribution to Current Account Deficit Widening  Petroleum exports declined by 19.1% to record USD 5.9 bn
during 9M 2020/21 during July-Mar. 2020/21, down from USD 7.3 bn a year
earlier as global oil (Brent) prices witnessed a y-o-y decline of
31.9% 15.8% during that period due to lower demand amid the
Petroleum Imports
COVID-19 pandemic.
Remittances 20.0%
Other Payments 15.0%  Petroleum imports declined by 28.9% to record USD 5.8 bn
Non-Petroleum Exports 13.8% during July-Mar. 2020/21 down from USD 8.1 bn a year
earlier. As a result, the petroleum trade account recorded a
Travel Payments 11.8%
surplus of USD 0.2 bn, compared to a deficit of 0.8 bn a year
Income Payments 9.4% earlier.
Transportation Payments 4.3%
Other Receipts 2.4%  Non-petroleum exports increased by 7.5% to record USD 14.6
Suez Canal Receipts -1.5% bn during July-Mar. 2020/21 up from USD 13.6 bn a year
earlier which the CBE attributed to higher exports of
Government Receipts -2.2%
household electrical appliances and wires and cables.
Government Expenditures -3.8%
Income Receipts -4.9%  Non-petroleum imports, on the other hand, increased by
Other Transportation Receipts -9.5% 11.0% to record USD 45.4 bn up from USD 40.9 bn a year
Petroleum Exports -19.0%
earlier, which the CBE attributed to higher imports of
medicines, sterilization equipment, spare parts and
Non-Petroleum Imports -61.0% accessories for cars and tractors, and railway locomotives. As
Tourism Receipts -87.8% a result, the overall trade deficit widened (deteriorated) by
9.0% to record USD 30.6 bn during July-Mar. 2020/21
Source: CBE & Dcode EFC calculations compared to USD 28.1 bn a year earlier.
Chart represents the contribution of different items to the deterioration in current account
(annual change multiplied by share in current account). Items with negative signs contributed
to the widening of the deficit & vice versa.  Portfolio investments continued to rebound to record a net
inflow of USD 16 bn during July-Mar. 2020/21 compared to an
 Tourism receipts plunged by more than two thirds during outflow of USD 7.9 bn a year earlier with the gradual easing
July-Mar. 2020/21 to record USD 3.1 bn down from USD 9.6 in global financial conditions and strong investor confidence.
bn a year earlier as a result of travel restrictions worldwide The stock of foreign holdings of Egyptian debt securities have
and in Egypt. Meanwhile, outbound travel payments started a recovery path since the beginning of the fiscal year
decreased by 30.5% during the same period to record USD reaching all-time highs with Egypt still offering one of the
2.0 bn down from USD 2.8 bn a year earlier. relatively-highest real interest rates in the region.

 Private remittances (net) increased by 8.8% during July-Mar.
2020/21 to record USD 23.2 bn up from USD 21.3 bn a year
earlier.
 Suez Canal Receipts declined by 2.5% to record USD 4.3 bn
during July-Mar. 2020/21, down from USD 4.5 bn a year
earlier, due to a decline in the number of passing vessels due
to the slowdown in global trade.
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 Net Foreign Direct Investment (FDI) in Egypt deteriorated by
19.3% during July-Mar. 2020/21 to record USD 4.8 bn, down
from USD 5.9 bn a year earlier, mainly due to a net outflow of
USD 0.3 bn in oil sector investments against a net inflow of
0.8 bn a year earlier. Meanwhile, non-oil investments net
inflows remained unchanged at USD 5.1 bn.
 Disbursements of medium and long-term loans recorded
USD 4.4 bn during July-Mar. 2020/21. This included USD 2 bn
syndicated loans from UAE banks secured in August as well as
USD 1.67 bn 2nd tranche of the IMF’s SBA loan approved in
December.

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05. EGYPT’S SUSTAINABLE
In this section, we present the main
pillars of the Sustainable Development
Plan for the fiscal year 2022/21 as

DEVELOPMENT PLAN announced by Planning Minister Hala El-

Said. It is worth noting that this is the
fourth year of a bigger medium-term

FOR FY 2021/22 plan for sustainable development

(2018/19–2021/22).

Achieve the plan’s targeted growth

rate of 5.4% in 2021/22 based on the
following assumptions:

 Expect the pandemic containment to be tightened by the mid-fifths of the year 2021.
 Implement the second phase of the economic and social reforms program concerned with structural reforms.
 Support the monetary and financial policies to stimulate markets and develop mobility.
 Facilitate policies, financing initiatives and stimulus packages for the private sector.
 Increase public allocations targeting investment in the areas of education and health, and the advancement of
overall human development.
 Follow-up the implementation of the national projects especially in the activities of basic infrastructure and
urban development; thus allowing more room for operation and participation of the private sector.

Enhance the role of public spending on Direct public investments

social protection and gender issues. towards green projects.

Strengthen the ability of state

institutions to face the repercussions Expand efforts to automate services.
of the COVID-19 pandemic.

Expand availability and improve the

Expand availability and improve the
quality of educational services, as well
quality of medical services.
as vocational training.

Increase the rate of coverage of

Increase the rate of coverage of
drinking water and sanitation
services. electricity services.

Increase investments directed so

Expand access to cultural and
productive sectors by 125%, human
youth-targeted services.
development by 70% & services by 30%.

Source: MPED

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 06. EGYPT’S RURAL Decent Life is an initiative that was launched by
the President in 2019 to improve the standard of

DEVELOPMENT
living and quality of life for the most vulnerable
groups in Egypt.
In December 2020, all of Egypt’s 4,658 villages

PROGRAM were included in the initiative to be divided into

three phases.

Achievements of the first phase (January 2019):

 Targeted 375 villages.
 Helped to reduce poverty rates in some villages by 14 percentage points.
 Improved access to basic services by about 50 percentage points in some villages.
 Establishment of 51 health units, 1,534 classrooms, and providing sanitation services in 37 villages.
 Raised the efficiency of 5,339 homes.
 Other developmental interventions with the aim of meeting all the sustainable development goals.

In December 2020, all of Egypt’s 4,658 villages were included in the initiative to be divided into three phases of nearly 1,500 villages each,
with the first phase, whose budget is estimated at EGP 250 bn, to be completed by the end of the FY 2021/22.
The Decent Life initiative aims to:

1. Provide basic needs & establish infrastructure through

 Bolstering food supply chains, and providing subsidized food.
 Including clean water, sewage, electricity, gas, and communications services for houses.
 Introducing infrastructure necessary for micro enterprises.
 Building ceilings for houses that lack them and building residential communities in villages
in need.
2. Enhance services through
 Building 13,000 classrooms, improving the quality of schools and nurseries, and
establishing literacy classrooms.
 Developing healthcare units, constructing new hospitals and equipping them with the
necessary devices and medical staff, and activating the new Universal Health Insurance
System.
 Operating medical caravans, and offering prosthetics.
3. Expand economic empowerment for rural areas citizens through
 Awareness programmes.
 Vocational training programmes.
 Village-based jobs that empower inhabitants, including female-headed households.
 Funding for small and medium-sized enterprises (SMEs): Around EGP 1.4 bn will be
allocated to SMEs prioritizing the manufacturing industries and locally-produced raw
materials.
 Establishing industrial and craft complexes.
Source: MEPD & Al-Ahram online

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 07. RESULTS OF Planning and Economic Development Minister, Hala El-Said,
submitted the executive summary of Egypt's 3rd Voluntary

EGYPT’S 3 rd National Review (VNR) on sustainable development goals

(SDGs) during the meeting of the High-level Political Forum

VOLUNTARY
on Sustainable Development (HLPF), which was held from
July 6th to July 15th 2021. The Minister explained that the
report covers all 17 sustainable development goals, and

NATIONAL REVIEW
includes challenges and gaps, as well as achievements and
success factors. Below are selected highlights.

Goal 8: Decent work and economic growth:

Goal 3: Ensuring health and
well-being for all:
 The launch of the "100
Million Health Initiative" in
2018 to eliminate hepatitis
C and detect non-
communicable diseases.
 The success of the initiative
was evident in a 98%
decrease in hepatitis C
cases.
 GDP growth had accelerated in 2018/19, to hit 5.6%, and
Egypt was one of the very few countries to record positive
growth rates in 2020.
 The unemployment rate decreased to 7.2% in the fourth
quarter of 2020, despite the pandemic, after having
increased to 9.6% in the early stages of the pandemic.
 The government's focus on financial inclusion as a priority,
through supporting micro, small and medium enterprises.
 Establishment of effective partnerships with the private Goal 13: Take urgent action to
sector such as the Sovereign Fund of Egypt. combat climate change:
 The launch of the
"Environmental Sustainability
Standards Guide" to increase
green public investments to 50%
by 2024/25.
 The launch of Egypt’s first green
bonds, worth USD 750 mn.
 Preparation of the "National
Strategy for Climate Change"
and the "National Strategy for
Hydrogen”.

Goal 1: Ending poverty for all:
 Poverty rates in Egypt decreased for the first time
since 1999, to record 29.7% in 2019/2020 (before
the pandemic), compared to 32.5% in 2017 /18
thanks to the country’s economic reform program
and the social protection policies, such as the Takaful
and Karama Program, and the "Decent Life"
initiative, which aims to raise the standard of living
for about 57 mn Egyptians.
Goal 16: Peace, justice, and strong institutions:
 Government’s efforts, including submitting Egypt’s
report under the African Peer Review Mechanism
(APRM) and establishing the National Institute for
Governance and Development Sustainable
Development (NIGSD) and the National Anti-
Corruption Academy, which aims to build capacities
in the areas of good governance and sustainability.

Challenges to SDG How they are addressed

Digital divide between males and Prioritizing the information technology and communication sector (2nd phase of
females structural reforms), as well as increasing women's participation in the workforce.
Environmental challenges Green projects and green recovery.

10
 08. NEWS HIGHLIGHTS
New Mortgage Finance Initiative: The
Central Bank of Egypt stated on July 13th
that it launched an EGP 100 bn mortgage
finance initiative for low- and middle-
income earners, offering 30-year finance at
a subsidized rate of 3% to qualifying
borrowers.
Russia Monitoring Tourists Safety: Russian
news agency Tass reports on July 14th that
Russia is proposing to set up a Russian-
Egyptian group that will conduct “round-
the-clock monitoring” of the situation in
Egypt to protect Russian tourists after
allowing Red Sea flights to resume.
Second GERD Filling: Ethiopia's Water
Minister Seleshi Bekele stated on July 19th
that Ethiopia had finished the second phase
of filling the Grand Ethiopean Renaissance
Dam (GERD) reservoir, which is expected to
generate power in the following months.
Non-Oil Exports: Trade and Industry
Minister Nevine Gamea stated on July 19th
that non-oil exports increased by 23% y-o-y
in H1 2021, reaching USD 15.4 bn,
compared to USD 12.5 bn in H1 2020.
Fuel Prices Hikes: The Oil Ministry stated
on July 23rd that the government raised fuel
prices by up to 3.8% in response to rising
international oil prices.
- 95-octane rose 2.9% to EGP 9 per liter, up
from EGP 8.75;
- 92-octane rose 3.2% to EGP 8, up from
EGP 7.75;
- 80-octane rose 3.8% to EGP 6.75, up from
EGP 6.50.
OPEC+ Increases Production: According to
the Financial Times on July 24th, OPEC+ had
reached an agreement to gradually
increase production until the end of 2022.
Food Exports: According to the Food Export
Council on July 26th, the value of Egypt’s
food exports increased 13% y-o-y during H1
2021, reaching USD 2 bn, against USD 1.8
bn in the same period a year earlier.
11
Water Resources Act Approved: The
Cabinet stated on July 26th that the Water
Resources Act got its final approval by the
House. The new law aims to regulate how
the country utilizes its water resources,
especially in the light of threats from
climate change and the GERD, while
reducing the use of some of the nation’s
canals for agriculture and reducing water
wastage.
Ain Sokhna Russian Industrial Zone:
SCZone Chairman Yehia Zaki announced
on July 28th that Russia will complete its
industrial zone in Ain Sokhna within the
following five months.
E-payments Confidence Growth:
According to a Visa study published on
July 29th, E-payments have increased
sevenfold in Egypt since the start of the
pandemic in tandem with an 85%
decrease in cash on delivery payments
compared with their pre-COVID levels.
Moreover, 74% of surveyed individuals
said they would rely on digital payments
in the future.
Russian Industrial Zone: The Cabinet
stated on July 29th that Egypt and Russia
agreed to expand the scope of the Russian
Industrial Zone (RIZ) within the Suez Canal
Economic Zone (SCZone) with an
additional 5 mn square meters distributed
between East Port Said and Ain Sokhna.
Global Minimum Corporate Tax Rate:
Finance Minister Mohamed Maait stated
in July that Egypt signed on a plan by the
OECD to introduce a minimum global
corporate tax rate of 15%.
EGX Government Treasuries Index: The
EGX stated on August 2nd that it is rolling
out a new index for publicly-traded
government treasuries on August 3rd. The
new 1000-point indices include more
actively traded and liquid government
bonds, with each constituent weighted
based on its market capitalization, to be
reviewed once every month.
Car Sales Growth: According to the
Automotive Market Information Council
(AMIC) on August 2nd, passenger car sales
grew 70% in June 2021, with over 19k cars
sold during that month, up from 11.2k in
June 2020.
Subsidized Bread Prices: The President
announced on August 3rd that there will
be a modest increase in subsidized 5-
piaster bread prices.
CBE Dormant Account Policies: The
Central Bank of Egypt announced on
August 4th new policies under which banks
will have much less leeway to close
dormant accounts, and they must notify
customers with inactive accounts three
months before taking action to freeze
those accounts.
Dopay Virtual Services: Fintech company
Dopay stated on August 8th that it was
awarded a banking agent license from the
Central Bank of Egypt through Arab
Banking Corporation Egypt (Bank ABC).
This license allows it to launch a virtual
banking platform enabling businesses to
instantly open accounts for their
employees & other beneficiaries and pay
them in real-time.
El-Hamam Wastewater Treatment Plant:
Emirates NBD stated on August 8th that it
will provide EGP 2 bn in financing to a
consortium of four construction firms to
build the largest agricultural wastewater
treatment plant in El Hamam, North
Coast.
Liquifying Israeli Natural Gas: According
to the Ministry of Oil on August 9th, Oil
Minister Tarek El Molla discussed with his
Israeli counterpart Karine Elharrar “future
plans” to receive and liquefy Israeli
natural gas at Egypt’s LNG Damietta, Idku
liquefaction plants before it is transferred
to ships for export to other countries.
Source: Enterprise.press
 …CONT’D
Renewable Energy Production: The New
and Renewable Energy Authority (NREA)
stated on August 10th that Egypt’s
renewable energy production from the
NREA projects had increased over 22% y-
o-y in FY 2021/22, due to improved
operational efficiency and maintenance,
reaching around 4.5k megawatts per hour.
Wheat Shortages: Bloomberg reported on
August 14th that crop losses in two of the
world’s biggest wheat exporters (Russia
and Canada, due to unfavourable weather
conditions) and quality concerns in a third
have pushed prices to multiyear highs,
adding to worries about food price
inflation. It is worth noting that Egypt is
the world’s biggest wheat importer.
Sovereign Sukuk Act Approved: The
Official Gazette published Egypt’s new
Sovereign Sukuk Act on August 15th,
paving the way for the issuance of sharia-
compliant bonds on local and
international debt markets.
EBRD Green Projects Loan: The European
Bank for Reconstruction and Development
(EBRD) stated on August 16th that the
EBRD, the Green Climate Fund (GCF), and
the European Union (EU) will loan QNB Al
Ahli USD 50 mn to on-lend to Egypt-based
green projects and individual households.
Electricity Link to Jordan: Electricity
Transmission Company (EETC) Chairman
Sabah Mashali stated on August 17th that
Egypt is looking to increase the capacity of
its existing electricity link to Jordan 2 GW
from the current 450 MW. The new
capacity will then feed into Syria and Iraq,
underpinning the export of power to Syria
and the growth of electricity sales to Iraq.
Mobile Wallets Growth: According to the
National Telecom Regulatory Authority
(NTRA) on August 18th, the number of
telecom-backed mobile wallets in Egypt
jumped 16% y-o-y to reach 16.3 mn in H1
2021. Mobile wallet transactions also
increased by 175% y-o-y to record 81 mn
in H1 2021, up from 29.5 mn in H1 2020.
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Data Centers and Cloud Computing
Regulations: According to a statement by
NTRA on August 18th, the Authority has
adopted a regulatory framework for data
centers and cloud computing designed in
consultation with local and international
data and cloud computing firms that will
help Egypt attract investment and
establish itself as a regional hub for data
infrastructure.
Leasing & Factoring Market: According to
the Financial Regulatory Authority (FRA),
monthly lending in the leasing sector grew
151.3% y-o-y to EGP 10.7 bn in June 2021,
up from EGP 4.3 bn a year earlier.
Meanwhile, the value of invoices factored
in the Egyptian market rose to EGP 2.2 bn
in June, up almost 169% from EGP 831 mn
a year earlier.
USD 2.8 bn SDR Allocations to Egypt:
According to an IMF statement, a general
allocation of Special Drawing Rights (SDRs)
to all 190 member countries equivalent to
about USD 650 bn became effective on
August 23rd to support the global recovery
from the pandemic. Accordingly, Egypt
will receive a foreign currency boost
equivalent to USD 2.8 bn through that
SDR allocation.*
Green Hydrogen MoU: According to a
Cabinet statement on August 24th,
Siemens Energy and state-owned Egyptian
Electricity Holding Company (EEHC) signed
an MoU to jointly build up the green
hydrogen industry in Egypt, potentially
growing and further diversifying exports
of renewable energy. It is worth noting
that a month earlier, the President had
issued a directive to create a green
hydrogen strategy, with an eye towards
launching an initial phase of projects that
could be worth USD 3-4 bn.
Source: Enterprise.press
“Advice
is judged by results,
not intentions”

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