Egypt’s business digest Aug. 14: Egypt, IMF to finance additional financing needed for economic reform – senior official to Bloomberg
Visitors are silhouetted against the logo of the International Monetary Fund at the main venue for the IMF and World Bank annual meeting in Tokyo in this file photo dated October 10, 2012. REUTERS/Kim Kyung-Hoon

CAIRO: No more browsing from site to site, view the top business news stories on August 14 here:

 

Egypt reconsiders grain mega project amid scandal investigation – REUTERS

(REUTERS): Blumberg Grain said its mega project to store Egyptian grains was back in play, with the government to announce a final decision in two weeks, after earlier indications that plans had been shelved and the company might exit the country entirely.

The decision comes as Egypt, the world’s largest wheat importer, remains mired in controversy over its wheat supplies, with industry officials claiming that over 2 million tonnes of the 5 million tonnes of wheat procured locally in this harvest may exist only on paper.

If Egypt’s local wheat procurement numbers were misrepresented, it may have to spend more on foreign wheat purchases to meet local demand – even as the country faces a dollar shortage that has sapped its ability to import.

The grain logistics company has said the tracking and monitoring capabilities of its high-tech storage systems would crack down on the type of fraud seen in this year’s local procurement, which involves private silos sharply overestimating their wheat stocks to boost government payments.

Blumberg Grain completed the first phase of the project earlier this year, delivering 93 systems to process and monitor about a quarter of the country’s crop. But a series of bureaucratic hurdles prevented the sites from coming online in time for the procurement now under investigation.

Egypt’s supply minister said last month that the second phase, which includes an additional 300 storage systems, had been rejected by the state’s Holding Company for Silos and Storage.

Blumberg Grain nonetheless said it is now optimistic about the project moving forward following a meeting with the prime minister and despite the pending resolution of “modest issues that stand in the way”, Blumberg Grain’s CEO for the Middle East and Africa, David Blumberg, told Reuters this weekend.

“Given the high impact of this project, and the Sisi administration’s emphasis on combating corruption, the need to increase hard currency, and help farmers, we are confident that the Egyptian government will do everything in its power to ensure the rapid development of the entire shouna (storage site) network,” Blumberg said.

The company said however that if the second phase is not signed, it would halt plans to establish Egypt as its regional export hub and for a $250 million investment allocation for projects that include a manufacturing plant in East Port Said.

The plant would be the first located in Egypt’s much-touted Suez Canal Economic Zone, on which the government has pinned hopes of building a re-export hub that will draw badly needed hard currency but which has so far struggled to secure foreign investors.

A parliamentary fact-finding committee investigating the wheat procurement scandal is expected to deliver its final report to the head of parliament on Sunday, committee member Yasser Omar told Reuters.

Among the report’s recommendations is that all private storage areas include monitoring capabilities similar to those of the Blumberg sites in order to prevent a repeat of this year’s fraud, Omar added.

The minister of supplies said last month his ministry had finalised inspections at storage areas and that only 4 percent of the value of this year’s harvest was missing.

 

EGX opens Sunday session on variation

Egypt’s stock market began transactions Sunday on variation, where the main indices slightly declined, while the small and medium enterprises index and the large index have seen an increase.

EGX30 declined by 0.80 percent; EGX50 down by 0.21 percent and EGX20 decreased by 0.59 percent. On the other hand, EGX70 increased by 0.41 percent, and so did EGX100 by 0.11 percent.

 

Egypt, IMF to finance additional financing needed for economic reform: senior official to Bloomberg

Ahmed Kojak, Egypt’s deputy finance minister, told Bloomberg website that Egypt in coordination with the International Monetary Fund, “will secure the additional financing needed for the government’s economic program.”

The IMF has recently agreed to a $12 billion loan to Egypt, which will be used to implement its economic reforms plans. Egypt will receive the loan on 3 years and re-pay it over 10 years.

Egypt’s consumption rate of petroleum products and natural gas has reached 87.7 million tons during the financial year plan of 2015/2016, official sources at the Egyptian Natural Gas Holding Company (EGAS.)

 

USD exchange rate ‘stable’ at 8.88 EGP Sunday

The USD exchange rate against the Egyptian pound remained “stable” at 8.85 EGP for purchase and 8.88 EGP for sale, while the Euro reached 9.88 EGP for purchase and 9.90 EGP for sale Sunday.

 

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