Update Egypt business digest Oct. 18: Egypt says has mustered 60 pct of $6 billion required to secure IMF deal
Prime Minister Sherif Ismail

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Egypt says has mustered 60 pct of $6 billion required to secure IMF deal

(Reuters) Egypt has mustered 60 percent of the $6 billion required to secure a $12 billion International Monetary Fund (IMF) loan, Prime Minister Sherif Ismail said on Tuesday

The IMF in August agreed in principle to grant Egypt the three-year loan facility to back a government reform program aimed at plugging a budget gap and rebalancing currency markets. Egypt needs to secure $6 billion in bilateral support before the deal goes to the IMF board for approval.

“There is a problem with the growth rates, the public debt and the budget deficit…and the resources of the state budget is 930 billion, 292 billion are debt servicing,” …” Ismail told reporters following a cabinet meeting.

“The wages rose from 85 billion to 230 billion and what is left from the budget is for health services, education, and infrastructure…without resources, there would be no projects or new job opportunities for citizens,” Ismail added.

Egypt’s economy has been struggling since an uprising in 2011 ushered in political instability that drove away tourists and foreign investors, major sources of foreign currency.

Ismail also said that his government is working on making the rate of the dollar against the pound more reflective of its real value.

Black market traders said on Tuesday they are selling dollars at 15.5 pounds on Tuesday, up from 15 a week earlier, while the official rate is 8.8 pounds per dollar. The widening gap is increasing pressure on Egypt to devalue its currency and end uncertainty that has discouraged foreign investment.

As part of a reform program that formed the basis of the IMF agreement, Egypt approved a long-awaited value-added-tax of 13 percent. Previously Egypt had no value-added-tax. The IMF also wants Egypt to focus monetary policy on easing the dollar shortage and reduce inflation to single digits.

Egypt’s efforts to defend the pound have drained reserves from $36 billion before the 2011 uprising to $19.6 billion at the end of September.

 

Sisi decrees establishment of Supreme Council for Investment

President Abdel Fatah al-Sisi, has decreed to establish a supreme council for investment, under his presidency, state’s official newspaper al-Waqaei al-Masryia reported on Tuesday.

The council includes the membership of the Prime Minister and Governor of the Central Bank of Egypt (CEB), the Ministers of Defense, Finance, Investment, the Interior Affairs, Justice, and Commerce and Industry, and the Chairperson of the General Intelligence Service, and others.

 

Egypt to gather additional $6 bln required for IMF deal

(REUTERS): Egyptian Finance Minister Amr El Garhy said on Monday his country would gather an additional $6 billion in bilateral funding required to secure a $12 billion International Monetary Fund (IMF) loan within one or two weeks.

The IMF in August agreed in principle to grant Egypt a $12 billion, three-year loan facility to support a government reform programme aimed at plugging a budget gap and rebalancing currency markets. Egypt needs to secure $6 billion in bilateral support before the deal goes to the IMF board for approval.

In comments on a talk show aired by local television channel CBC, he also said the government would submit an investment law to parliament within “one and a half months or more”.

The government has been working on a new investment law it hopes will slice through Egypt’s notorious red tape and make it easier and quicker for foreign investors to do business.

Garhy also said Egypt would issue international bonds in the second half of November or the first week of December. In August Egypt had asked JPMorgan, Citi, BNP Paribas , and Natixis to lead manage its international bond offer. Egypt’s government approved earlier that month an international bond issuance of between $3 billion and $5 billion.

Egypt’s economy has been struggling since an uprising in 2011 ushered in political instability that drove away tourists and foreign investors, major earners of foreign currency.

As part of a reform program that formed the basis of the IMF agreement, Egypt approved a long-awaited value-added-tax of 13 percent. Previously Egypt had no value-added-tax. The IMF also wants Egypt to focus monetary policy on easing the chronic dollar shortage and reduce inflation to single digits.

 

Egypt to receive $1.5 bln fund from World Bank this FY

Egypt is expected to receive a $1.5 billion fund from the World Bank during the current fiscal year as part of a 3yr- fund program worth $4.5 billion, Hafez Ghanme, vice president of the Middle East and North Africa at the World Bank, told Youm7.

The first tranches of the fund was received during the last fiscal year 2015-2016, while the third is expected to be delivered during the next FY2017-2018.

 

EGX opens on varied note Tuesday

The Egyptian Stock Market Exchange (EGX) opened Tuesday on a varied note after a sharp decline on Monday, Youm7 reported.

The main index EGX 30 rose by 0.07 percent, while EGX20 declined by 0.47 percent.

 

2nd Egyptian-Tanzanian Business Forum kicked off in Cairo

The Second Egyptian-Tanzanian Business Forum kicked off Tuesday in Cairo, and is set to last until Wednesday.

The meetings at the forum aims to boost trading and economic relations between both countries, and to promote size of Egyptian investments in Tanzania.

 

167 exploratory wells drilled for oil, natural gas across Egypt: Ministry

The Ministry of Petroleum has finalized drilling 167 exploratory wells to extract crude oil and natural gas in different parts in Egypt, Youm7 reported.

The wells were drilled by 10 companies in areas including Sinai, Western Desert and Suez Gulf, Youm7 quoted sources at the ministry.

 

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