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Embassy of India
Cairo
*********
No.CAI/CW/201/02/2010
30 March 2010
Economic and Commercial Report for the Month of February 2010
Overview
The Egyptian Prime Minister, Dr. Ahmed Nazif said in a statement before the
Shura Council that all figures indicate that the Egyptian economy has started to recuperate from
the effects of the global financial crisis. He pointed out that the Egyptian economy is recovering
and in the process giving some positive indicators; the growth rate reached 5 %, inflation
dropped from 20 to 13 %, unemployment remained stable at 9.3 %, foreign currency reserves
are nearing $ 35 billion. Ahmed Nazif, laid out his target for getting growth back on the same
level as it was between 2004 and 2008, when it averaged about 7% per year, in the course of
his keynote address to an Economists’ conference. Other ministers also gave the details about
how this would be achieved—through incremental improvements to the business environment;
new opportunities for private investment, particularly in infrastructure and a doubling of exports
(excluding oil and gas) to US$36bn in 2013. The government acknowledges that there will be a
bulge in the budget deficit, but argues that once the higher growth rates kick in, the deficit will
start to head back down towards the medium-term target of 3% of GDP. The credibility of the
government's plans has been bolstered by the economy's performance during the recession,
with growth slowing only marginally to about 5%, a highly creditable result by regional and
international comparisons.
Egypt's State budget deficit stood at LE57.5 billion from July to December
2009, while the country's overall deficit for FY2009/2010 is expected to hit LE100 billion,
according to the Ministry of Finance. Subsidies in Egypt are expected to hit LE 95 billion in
FY2008/09 whereas fuel subsidies are expected to total LE 66 billion in FY2009/10, according
to the country's Minister of Oil, Sameh Fahmi. Meanwhile, tax revenues are expected to fall to
LE145 billion from LE167 billion in the previous year as corporate results are poised to decline
in the wake of the global downturn. To combat the economic slowdown, the Government has
carried out a crisis stimulus plan featuring fiscal, monetary, and direct support measures in the
form of LE15 billion in additional spending, including higher subsidies and social benefits. On
the monetary side, the Central Bank of Egypt cut interest rates six times last year, reducing
overnight deposit and lending rates by 325 and 275 basis points, respectively. Egypt's inflation
stood at 13.6 % in January, against 13.1 per cent a month earlier, according to the State-run
Central Agency for Public Mobilization and Statistics (CAPMAS).
Egypt's unemployment rate reached 9.4 % in the last quarter of 2009
compared to 8.8 % in the last quarter of 2008, according to a report issued by the state-run
Central Agency for Public Mobilization and Statistics [CAPMAS]. The report noted that some
166,000 Egyptians had lost their jobs during the period, swelling the ranks of the unemployed to
a total of 2.3 million people. According to CAPMAS, last quarter's layoffs represent 12.6 % of
the total number of unemployed, while layoffs during the last quarter of 2008 represented only
5.9 % of the total. Unemployment rose by 12.9 % in urban areas and by 6.7 % in rural areas,
the report stated. It went on to note that 1.3 million unemployed people held high school
diplomas while 898,000 held university degrees, further pointing out that 56.4 % of total
unemployed were females and 43.6 % males. The report also noted that 87.2 % of the total
number of unemployed was between 15 and 29 years of age.
Some experts attributed the rise in unemployment to the lack of a
skilled workforce in Egypt, pointing out that the local textiles sector in particular was
suffering from an acute shortfall of skilled labor. The government has admitted that the
number of unemployed persons in Egypt has increased over the past few months. According to
a report by the Ministry of Economic Development, Egyptians have fewer job opportunities both
overseas and in the domestic private sector. According to the report, employment offices alone
provided 53 % of total job opportunities in the second quarter of the current fiscal year, up from
27 % in the same period last year. Job opportunities created by the private and investment
sectors during the same period have slipped to 35 % compared to 60 % in the previous year.
The report also stated that the percentage of Egyptian overseas labor had dropped to 10.9 %--
or 11,000 Egyptians--down from 13 % in the previous year. Bassant Fahmi, consultant to the
Egyptian-Saudi Finance Bank, said the decline in job opportunities was due to higher education
standards overseas. Fahmi also added that migrant workers from Southeast Asia and
China have become strong competitors to Egyptian labor in the Gulf. As a result,
remittances from expatriate Egyptians have declined to US$1.8 billion during the first quarter of
the current fiscal year, compared to US$1.9 billion during the same period last year.
Economic Indicators:
Monetary Indicators
Total deposits in banking system, (excluding the Central Bank of Egypt), attained LE 859.2
billion during December 2009, increasing by about 10.7% compared with its level during
December 2008. Besides, total domestic liquidity reached LE 866.4 billion during December
2009, attaining a rise of around 9.5% compared with its level during December 2008.
International Reserves
Net international reserves reached US$ 34.2 bn. at the end of January 2010, achieving an
increase of nearly 2.4% compared with its level during January 2009.
Receipts of Suez Canal
Receipts of Suez Canal attained US$ 383.6 million during January 2010 recording an increase
of about 15.4% compared with its level during January 2009.
Electricity
Total generated electricity attained 10748.8 million kWh during January 2010, recording an
increase of about 3.5% compared with its level during January 2009. Total consumption of
electricity reached 9413.5 million kWh during January 2010, recording an increase of about
5.1% compared with its level during January 2009.
Railway Transportation
Revenues of railway passengers reached LE 526.3 million during the period (July 2009 – Jan.
2010) increasing by about 1.2% compared with their level during period (July 2008 –Jan.2009 ).
As for the revenues of railway cargo, they attained LE 148.8 million showing 27.4% increase
compared with their level during the same period of the previous year.
Monetary Indicators
Inflation Rate
(%)
Amount of Amount of
change (%) change (%)
Inflation January December January
Rate 2009 2009 2010 Monthly Annual
Monthly 0.5 -1.3 0.8 2.1 0.3
Annual 14.3 13.2 13.6 0.4 -0.7
(Source: CAPMAS)
External Transactions
(US$ mn)
Item November October November Change Rate Change Rate
2008 2009 2009 (%) Monthly (%) Annual
Exports 1650.0 1904.6 1984.3 4.2 20.3
Imports 4318.5 4142.0 3566.6 -13.9 -17.4
Trade
-2668.5 -2237.4 -1582.3 -29.3 -40.7
Balance
Energy Sector:
Petroleum
Change Rate Change Rate
Item December November December (%) Monthly (%) Annual
2008 2009 2009
Production
of crude oil,
condensates 2978 2791 2885 3.4 -3.1
and butane
(000 tons)
Domestic
Consumption
of Petroleum 2520 2785 2715 -2.5 7.7
Products
(000 tons)
Exports of
Crude oil and
petroleum 214 369 498 34.9 132.5
products
(US$ mn.)
(Source: Ministry of Petroleum)
Natural Gas
(Source: Ministry of Petroleum)
Change Rate Change Rate
Item December
December November (%) Monthly (%) Annual
2008 2009
2009
Natural Gas
Production 3841 3795 4002 5.5 4.2
(000 tons)
Domestic
Consumption 2548 2594 2786 7.4 9.3
(000 tons)
Electricity
Consumption
as % of 55 56.1 54.9 -1.2 -0.1
Natural gas
consumption
Exports of
Natural Gas
and 327 200 234.4 17.2 -28.3
derivatives
(US$ mn)
http://www.eip.gov.eg/Periodicals/Periodicals.aspx?ID=13
Trade with India
Bilateral Trade:
Financial Year: 1 July-30June
(Q1: 06/2009 to 09/2009) (Q2: 10/2009 to 12/2009)
Total Export to India Total Export to India Total Import from Total Import from
in Q2 of FY 2009-10 in Q1 of FY 2009-10 India in Q2 of FY India in Q1 of FY
2009-10 2009-10
$ 384,979,907 $ 508,165,318 $ 324,525,084 US$ 371,313,860
Total Exports to India during December 2009: US $ 161,199,125
[LE 874,569,731]
Total Imports from India during December 2009: US $139,714,332
[LE 758,006,138]
Total Imports from India during the period 1/09 to 12/09 US $ 1,259,330,570
[LE 6,998,351,846]
Total Exports to India during the period 1/09 to 12/09 US $ 1,421,067,533
[LE 7,897,156,495]
Bilateral Visits
Egyptian delegations from General Authority for Investment (GAFI) comprising of Dr.
Tahany.F.Shamlouk, Mr. Ahmed Zohai and Ms. Yasmine Hassanien participated in the
second India Arab Investment Projects Conclave which took place from 8-9
February in New Delhi. General Authority for Economic Zone, North-West Gulf of Suez
delegation, headed by Mr. Ahmed Amin, Chairman and Mr. Tareq Hashem (Promotion
Manger) also went to the event and had meetings with Indian companies. The Conclave
had the participation of over 280 Arab delegates from 21 countries comprising of
Government officials, business leaders and investment houses. Investable project
proposals worth USD 32 billion from both sides were tabled, discussed and evaluated
during the two-day conclave.
12 Indian companies participated in the 12th International African-Arabian Exhibition
for Textile, Embroidery and Sewing Machinery & Accessories (ITCE’12) which took
place in Cairo from 23-26 February. Some of the companies participated directly, while
others did it through their existing dealers or distributors in Egypt.
Mr. R. K. Goel, Director (Finance) and Mr. Rabi Gayen, Deputy General Manager, GAIL
visited Egypt from 1-2 February 2010 to meet with EGPC, E-GAS, and ECHEM.
Indian Hotels Co. Ltd (IHCL), signed a Memorandum of Understanding (MoU) with
Palm Hills Developments, one of the premier real estate developers in Egypt, for
managing three hotels being developed by Palm Hills at the North Coast, Ain El Sokhna
and Aswan. IHCL is the second Indian hotel company after Oberoi Group to have a
presence in Egypt.
Local Trade Enquiries: 25
Indian Trade Enquiries: 30
No. of Trade Dispute correspondences (Indian): 2
No. of Trade Dispute correspondences (Egyptian): 3
No. of ITEC Candidates 8
Market Watch
Egypt, China plan $ 1.5 billion economic zone
Egypt is negotiating with the Tianjin Economic-Technological development Area (TEDA) to build
a similar model near the southern approaches to the Suez Canal. Under the Egyptian law, the
Chinese entity will be allowed to take a 49% stake in the $ 1.5 billion Suez Economic zone.
China’s interest in the manufacturing-focused Suez Economic Zone may be in part due to the
large number of preferential trade agreements that Egypt has with Europe, Africa and the
Middle-East. TEDA, which has secured major investments from multinational companies such
as Akzo Nobel, IBM and Toyota, is expected to set up its first marketing office for the new
Egyptian zone in June. The area could attract up to $ 3.5 billion in investment in the first three
years of operation. In recent years, China has been investing heavily in Africa and the Middle
East in return for access to natural resources needed to fuel its energy-hungry economy.
Chinese Prime minister Wen Jiabao pledged to give African countries $ 10 billion in
concessional loans in November. Chinese firms have been pouring investments into oil and
other raw materials in Africa to fuel their economic growth. Over the past five years, Chinese
direst investment in Africa has soared, from $ 491 million in 2003 to $ 7.8 billion in 2008,
according to Chinese official figures. Total trade between China and Africa surpassed $ 100
billion in 2008, a tenfold increase in eight years
HCL Wins Egyptian SAP Deal
Indian IT services vendor HCL Technologies has won a SAP implementation contract from
Egyptian petroleum services company Sahara Petroleum Services Company (SAPESCO).
Financial terms of the deal were not disclosed. The company said the SAP Enterprise Resource
Planning ECC 6.0 project will enable complete and integrated ERP for SAPESCO's petroleum
business across the MENA region, especially in Egypt, Libya and Syria. The company will also
deploy HCL Axon's Rapid Deployment Toolkit to provide a pre-configured solution that
enhances SAP's ERP package. Virender Aggarwal, senior vice president and head of APAC-
MEA Markets at HCL Technologies, said: "Our strong SAP experience in the Oil & Gas sector,
more specifically in the Oil Field Services, played an important role in winning this engagement.
We look forward to extending benefits like timely management reporting, increased operational
efficiency and centralization of key organizational functions for SAPESCO.
Melrose Resources announces exploration discovery in Egypt
Melrose Resources, an oil and gas exploration and production company has announced a new
exploration discovery and commencement of seismic data acquisition in Egypt. According to the
company, the South Damas no-1 exploration well has been drilled to test a prospect in the Sidi
Salim formation in the southeast Mansoura concession. The well is believed to have
encountered the top reservoir at a depth of 4345ft and penetrated 76ft of net gas pay with good
reservoir properties. In mid-January 2010, the company reportedly commenced the acquisition
of the first 2-D seismic survey to be shot over the Mesaha exploration concession in southern
Egypt.
OTH extends management contract of Alfa
Egypt-based Orascom Telecom Holding, or OTH, has announced that after exceeding the one
million subscriber mark required in its management contract signed with the Republic of
Lebanon in January 2009, OTH has been awarded an extension to the management contract of
Alfa, one of the two Lebanese mobile telecommunications operators, for a period of six months
ending on July 31, 2010. Under this contract, OTH receives a monthly sum of $2.5 million in
addition to 8.5% of total revenues. Out of these amounts OTH is liable to cover all the
operational expenses (OPEX) of the network and is entitled to keep the remainder as
management fees. The Republic of Lebanon is fully responsible for the CAPEX during the
contract period. The mobile network assets of Alfa were transferred to the Republic of Lebanon
with effect on August 31, 2002, following the termination of the build, operate and transfer
contract under which Alfa was constructed.
First Data signs three-year agreement with MSAD of Egypt
First Data, a provider of electronic commerce and payment processing solutions, has signed a
three-year agreement with the Ministry of State for Administrative Development of the Republic
of Egypt, for the extension of the Egyptian government's family card project, which covers
subsidized food and social solidarity pension services in nine governorates/provinces. Under
terms of the agreement, First Data will provide a fully managed service for the issuing and
processing of more than 4.5 million multifunctional, reloadable smart cards. These cards are
used by eligible families to claim subsidized food at grocery stores and social solidarity pensions
at service centers throughout Egypt. First Data said that it will roll out cards during the next
seven months, working with local and government institutes including Masria Card, a card
manufacturer in Egypt, for cards production and personalization, and the Aviation Information
Technology (AVIT), a subsidiary of the Egyptian Holding for Airports and Air Navigation, for the
provision of hardware and networking infrastructure. First Data said that the AVIT will provide
operation and data hosting services from its data centre to support the installation and
maintenance of 11,000 new point-of-sale terminals at grocery stores throughout nine
governorates in Egypt. Additionally, First Data will develop a network of service centers to
support cardholders and grocery outlets. The payment card and processing technology used will
also allow citizens to use the cards to claim a range of other government benefits such as
health, transportation, gas and other subsidies as and when these are launched.
TransGlobe announces exploration project in Egypt
TransGlobe Energy has announced a new exploration project in the western desert of Arab
Republic of Egypt. TransGlobe has signed a farm out agreement with Vegas Oil & Gas to earn a
50% interest in the East Ghazalat Concession in the Western Desert of Egypt, subject to the
approval of the Egyptian government. The 858km East Ghazalat Concession is located in the
Abu Gharadiq basin of Egypt's Western desert, approximately 250km west of Cairo. East
Ghazalat was awarded to Vegas on June 5, 2007 and is currently in the first, three-year
exploration period. There are two additional exploration period extensions of two years each.
TransGlobe has reportedly committed to pay 100% of three exploration wells to a maximum of
$9.0 million in the East Ghazalat Concession. Drilling commenced on the first exploration well
(Gawad 1) on January 14, 2010. The well is planned to reach a total depth of approximately
9,480ft by the end of February. The second and the third exploration wells are planned to be
drilled consecutively following Gawad 1 during the first half of 2010.
EgyptAir selects Rockwell Collins's avionics for Boeing 737NG fleet
EgyptAir has selected a group of avionics from Rockwell Collins for eight Boeing 737NG aircraft.
Deliveries are scheduled from September 2010 through August 2012. The agreement includes
dual Rockwell Collins MultiScan Hazard Detection System configuration and Head-up
Guidance System (HGS) as well as a comprehensive communications, navigation and
surveillance suite including the Rockwell Collins Traffic Collision Avoidance System and Multi-
Mode Receiver. Rockwell Collins said that its MultiScan Hazard Detection System is derived
from an extensive operational experience to create a fully automatic airborne radar system that
reduces pilot workload, enhances safety and passenger comfort by minimizing unexpected
turbulence encounters, and provides optimal clutter-free weather displays. Features of the HGS-
4000 include runway remaining, tailstrike avoidance and unusual attitude recovery. The system
has an instrument landing system (ILS) anomaly detect feature, which will filter out ILS
disturbances during the final approach phase. HGS presents critical flight information in the
pilot's forward field of view.
Egypt extends scope of triple play licenses
Egypt's National Telecommunication Regulatory Authority or NTRA has extended the duration
of telecom licenses to 15 years and increased the number of units that can be connected from
5,000 to 10,000. The deadline for the bids of the licenses has been delayed by two months, with
the bids now due by March 15, 2010. In September 2009, NTRA announced that it would
auction two triple play licenses for cable, telephone and internet services to connect residential
compounds in the suburbs and outlying cities of Egypt. Tarek Kamel, Egypt's
communications minister said that the triple play licenses are expected to generate
about $1 billion in investments over the next five years.
Huawei Expands Regional Training Center in Egypt
Network infrastructure provider Huawei has opened its new Regional Training Center in Smart
Village Cairo, Egypt's prime technology cluster and Business Park, replacing the previous
training center based at Nasr City. The company said the new facility has the latest technology
training programs for WCDMA, GSM, CDMA, NGN, Datacom, Optical Networks, Broadband
and Intelligent Networks, among others. It said the facility has increased capacity to
accommodate 150 trainees at a time. To date, the company has six training centers in Africa,
providing training to 12,000 students each year. In July, the company opened a Long Term
Evolution laboratory in Richardson, Texas, to enable operators and industry partners in North
America to explore the potential of LTE technology for the delivery of mobile broadband
services.
Technip secures engineering services contract from Burullus Gas
French energy sector engineering company Technip has secured a LE65 million lump sum
engineering, procurement, installation and construction contract from Burullus Gas Company for
the West Delta Deep Marine Phase VII development project offshore Egypt. The project is
designed to maintain overall plateau production for the West Delta Deep Marine concession,
located 95km offshore Egypt in the Mediterranean. Technip has said that its operating center in
Oslo, Norway, will execute the contract with assistance from the group's team in Cairo, Egypt. It
covers turnkey delivery of the tie-in structure between a new gas export pipeline and two
existing pipelines, including 'hot tap tie-ins' that allows the work to be carried out without
stopping the ongoing production. The company has said that the offshore installation is
scheduled for the fourth quarter of 2010 using the Wellservicer, a vessel from Technip's fleet.
Credit Agricole Egypt wins approval to acquire EHFC
Credit Agricole Egypt, a subsidiary of the French banking group Credit Agricole, has received
stock exchange market approval to acquire the remaining shares of Egyptian Housing Finance
Company or EHFC. EHFC will now operate as a wholly owned subsidiary of Credit Agricole
Egypt and will run operations independently with the same management and employees. Credit
Agricole Egypt, which now owns 99.98% of the shares in EHFC, has purchased the shares of
IFC (20%), OPEC (20%) and HDFC (10%) through this acquisition, valued at EGP70 million.
World Bank Approves Loan for Cairo International Airport Expansion
The World Bank approved a US$280mn loan for the expansion of the second terminal building
in Cairo's international airport. The aim is to make Cairo into a regional hub, enabling it to
capture growing traffic between Asia, the Middle East and Africa. Cairo's international airport is
the second largest in the continent after the international airport in Johannesburg. The loan has
a maturity of 25 years and a grace period of seven years. This is the second time that the
World Bank has assisted with Egypt's airport infrastructure expansion. The first time was in
2004, through the Airport Development Project. These expansions in infrastructure will enhance
Cairo's position as a regional hub for long haul traffic between Africa, Asia and the Middle East,
a role which is more geographically befitting to Cairo than Johannesburg. The Egyptian Ministry
of Investment announced several ambitious airport projects in the first half of 2009. The plans
include an EGP2bn (US$364mn) project for a new Mubarak Airport in Cairo, an allocation of
EGP6bn (US$1bn) for other new airports (although it is not clear whether that includes Mubarak
Airport), and EGP5bn (US$911mn) towards airport improvements.
Cargill Seeking Permission for US$110mn Plant
US agricultural giant Cargill is requesting permission to construct an EGP 600 million
(US$109.71mn) sugar refinery plant in Egypt. The plant is expected to be operational one year
after approval is granted. Approval is likely bearing in mind that the government is actively
encouraging domestic sugar production to try and tighten the sugar trade net deficit to be
around 0.92mn tonnes in FY09. Present in Egypt since 1994, Cargill is the latest multinational
to target the sugar refining industry. Towards the tail end of 2009, Saudi Arabia's Savola Group
- the Gulf region's largest sugar refiner ahead of the UAE's Al-Khaleej Sugar Company -
announced that it was surveying opportunities in Egypt.
In January 2009, Egypt announced that it would import 1mn tonnes of raw sugar in 2010 to
satisfy demand, with the excess supply rolling over to meet demand into early 2011. At about 35
kilograms per capita annually, Egypt is already one of the world's greatest sugar consumers.
With consumption forecast to increase 4.9% to 2.74mn tonnes, most of the growth opportunities
for the likes of Savola and Cargill (once its license comes through) in Egypt will come not from
headline growth but from plugging some of the sugar trade net deficit. Encouragingly for Egypt-
based producers, the government has been taking a more active stance towards encouraging
domestic production. By 2012, Egypt is aiming to reduce sugar imports by about 60%, which if
realised would significantly lessen its exposure to price spikes. In an effort to keep prices in
check, Egypt announced in January that it would lengthen an exemption on sugar import duties
initiated in August 2009 to June 2010. While Egypt's emerging consumer market of nearly
80mn is a major draw to multinationals, its trade position is what really distinguishes it. As well
as providing a relatively low cost export base, sugar refiners like Cargill can look to take
advantage of the favourable trade terms enjoyed with the wider Middle East region, much of
Europe and a number of promising African markets.
Egypt to sign a wind farm deal
Egypt will sign a deal with Abu Dhabi's Masdar to build a 200 megawatt wind farm, as part of a
plan to generate 20 per cent of Egypt's energy needs from renewable sources by 2020.
Private firms playing a key role
Egypt will rely increasingly on private companies to provide social services and infrastructure
through PPP and expects to offer a string of new projects soon. The Egyptian Government
awarded the first such contract, to build and run a wastewater treatment plant near Cairo, last
May and will invite bids for more wastewater plants and hospitals in coming months. They
typically involve operating the projects 20 years.
Egypt has also simplified the procedures for public-private partnerships and hopes to enact a
law governing the entire process later this year. The ministry of Higher Education has invited
bids for contracts to build and run two university hospitals and a blood bank in Alexandria, with
the deadline for submission in May.
The Ministry of Housing plans to invite bids in March for a 150,000 cubic metre per day
wastewater treatment plant in Sixth of October City, a satellite town of Cairo, and another in
May to upgrade a 1.2 million cubic metre plant in Abu Ruwash.
Seeking to attract more investment, an official Egyptian delegation headed by the country’s
Minister of Investment Mahmud Mohieddin attended the Euromoney Egypt Investor
Conference in Hong Kong. The Euromoney’s annual event on investment in Egypt has
taken place in London for the past five years. But this year, it was relocated to Hong Kong in
view of growing interest in Egypt as an investment attraction from many Asian countries. The
Egyptian Government has reacted quickly in the face of the global downturn by taking a raft of
measures to stimulate the economy by pumping LE 13.5 billion ($ 2.5 billion) into infrastructure
projects: roads, electricity, renewable energy, airports and healthcare. Total investments of the
local private sector hit LE 113.5 billion in the fiscal year (FY) 2008/09, and we seek a 5 %
growth, pointing out that Egypt’s economy grew by 4.7% in FY 2008/09 despite the global
meltdown. Egypt has adopted expansionary financial policies to boost demand in the wake of
the slowdown. Customs duties were slashed to 8.9 % from 14.6 %. Taxes were reduced to 20%
for both individuals and corporations from 32 % and 42% respectively. The ministry of
Investment is working on 46 projects worth $ 25 billion. Egypt has attracted $ 42 .4 billion in FDI
from FY 2004/05 to FY 2008/09. At the crossroads of Europe, Africa and the Middle –East,
Egypt is a dynamic and diverse economy. It has a stable financial system, open and liquid
capital markets and a vibrant corporate sector. The Egyptian delegation comprised Tareq
Kamel, the Minsiter of Communications and information Technology: Ziad bahaa Eddin,
the chairman of the Egyptian Financial Supervisory Authority; Osama Saleh, the
chairman of the General Authority for Investment and free Zones (GAFI); and Chairman
of the Egyptian Exchange, Maged Shawqi.
EgyptAir plans more India flights
The local media is abuzz with reports that Egyptian authorities are in the process of increasing
the number of flights between Egypt and India to seven each week by the end of this year.
Currently, there are three flights between the two countries every week, which are all operated
by EgyptAir and only run between Cairo and Mumbai.
Government plans to cut drug prices
EFG-Hermes says the Egyptian government plans to reduce the price of 40 medications by as
much as 40% starting in May. According to a February 9 report by the investment firm, the
reduction will affect imported brands and foreign brands produced locally under license from
international corporations, and include medications used to treat diabetes, hepatitis,
osteoporosis, mental illness, strokes, asthma, blood pressure irregularities and high cholesterol.
The reductions are part of a system restructuring by the government that will result in higher
prices for some drugs.
Kamel sees IT exports reaching $1.1 billion
Minister of Communications and Information Technology Tarek Kamel predicts that information
technology (IT) exports will reach $1.1 billion this year. The state information service reported
on January 31 that growth rates in the IT sector had contributed to Egypt’s GDP growth of 5
percent in 2009. Kamel was quoted as saying that in order to continue boosting IT exports, his
ministry and the Ministry of Higher education will work together to help prepare university
students for jobs in the information and communications technology sector.
Egypt reinstates tax on capital goods imports
According to a February 21 press report, the government will not renew last year’s tax
exemption on imported capital goods that was part of a LE 15 billion stimulus package. The
move was implemented by the Ministry of Finance in order to assist the private sector during the
economic crisis.
Energy waivers sought for cement factories
EFG-Hermes reported on February 16 that the Ministry of Trade and Industry has asked the
Ministry of Petroleum to allow newly licensed cement companies to import natural gas and oil
without any restrictions. The government is expected to issue licenses for the construction of
eight new cement factories by the end of March. Each licensed factory will have an annual
capacity of 1.5 million tons per year and, according to a report quoted by EFG-Hermes, the
Ministry of Petroleum may not be able to meet the extra demand.
Leases to offer land for agro-business
According to EFG-Hermes, land intended for agro-business and other projects is expected to be
offered for lease this year, though the ministry of agriculture has not yet identified plots. The
February 2 report stated that the ministry has already notified the ministry of trade and industry
that land in Sinai, Upper Egypt and the western desert could be used. Sites must be suitable for
irrigation and the construction of manufacturing or processing facilities. Leases will range from
40 to 99 years and be available to both local and foreign investors. Agro-business projects could
include sugar and tomato paste plants. Other media reports the same day indicated that the
industrial development authority (IDA) will tender 42 million square meters of land for industrial
projects. This land is available to both local and foreign parties and is expected to attract LE 85
billion in investment. The tender includes 8 million square metres in 10th of Ramadan city, 9
million in Sadat city and 7 million in Borg Al Arab.
Petroleum minister signs exploration agreements
The state information service reported on that minister of petroleum Sameh Fahmy has signed
two agreements with Apache, a US company, for oil exploration in the western desert. The
agreements involve 640 Sq.Km of land and a total investment of about $55 million. Media
reports say Egypt’s oil production could grow by 8.4 percent this year to about 720,000 barrels
per day, versus 664,000 last year. Daily natural gas production in forecast to reach 6.5 billion
cubic feet in 2009, compared to 6.3 billion last year.
Anish Rajan
Third Secretary
30.03.2010
