An Egyptian proverb says, “when the merchant goes bust, he starts searching through his old books,” in the hope, of course, of finding a debt or two that he can call in. To many Egyptians, their government is acting like the proverbial merchant as it aggressively pursues, over a tax claim suddenly conjured out of history, two of the country’s biggest businessmen, Nassef Sawiris (pictured), chairman of Orascom Construction Industries, and his father, Onsi Sawiris, former chairman.
If successful, the government could net a few much-needed billions. But to many critics, the action against OCI could seriously damage the prospects of restoring investor confidence in the country. Continue reading »
A delegation from the International Monetary Fund is due in Egypt next week to discuss a much-needed $4.8bn loan seen as a lifeline to an economy battered by almost two years of political turbulence. Crucial to securing the loan will be reforms to be unveiled by the Egyptian government aimed at helping it rein in an 11 per cent budget deficit. Cuts to the country’s costly energy subsidies (which suck in 20 per cent of the budget) are expected to be at the heart of these reforms. Continue reading »
Has the Egyptian government conducted a real social dialogue on its planned economic reforms? The government says it has just finished such a discussion over the programme it will submit later this month to the International Monetary Fund.
But some participants aren’t sure they were properly consulted. Continue reading »
Will Egypt implement much-needed energy reforms to free up government spending? It’s on the agenda given the discussions with the IMF – but Egypt has been here before.
Osama Kamal, Egypt’s oil minister, told Reuters recently that much-awaited energy subsidy cuts were still under review and would only be implemented after the government has conducted a “social dialogue” on the proposed reductions. He gave no time frame for reducing the costly subsidies which swallow up more than twenty per cent of government spending. Continue reading »
Just under a year ago, Vladimir Putin quipped about the resilience of his people noting that Russian tourists continued to head for Egypt even as revolutionary turmoil gripped the country and other foreign nationals fled.
Putin understands how to talk his people up. However, do the numbers bear him out? And how is Egyptian tourism faring? Continue reading »
The political turmoil in Egypt since the start of the year has taken a heavy toll on company earnings as first half results reveal. Compared to the mayhem, loss of life and physical destruction in Libya and Syria, Egyptians consider that they have suffered considerably less in their revolutionary transformation. While 850 people were killed and many others were injured, the state has survived and economic assets have emerged intact.
Even so tourism, investment and consumer confidence have been hit badly. That is largely the story being told, and in particular by one company’s H1 figures: Orascom Development. Continue reading »
A group of Egyptian expatriates who met online are behind a new initiative to support the economy of their home country, damaged by the political turmoil following the revolution which toppled Hosni Mubarak, the former president.
The idea behind the T6T scheme is simple according to Ahmed al-Daly, a software developer in Canada and one of the people who devised it. Continue reading »
Under Hosni Mubarak, Egypt’s construction companies did well from a stream of public sector contracts.
With the former president under investigation and his regime in tatters, one of the country’s most dynamic industries is in the doldrums, its future blighted by the political and economic instability. Continue reading »
Egypt has turned to the International Monetary Fund to help see it through a gap in financing that has loomed larger and larger since the revolution that toppled the regime of former president Hosni Mubarak.
But Samir Radwan, finance minister (pictured), said the hoped-for $10bn-$12bn package from the IMF and other lenders would provide only temporary relief. “I need support for six months to a year, but after that I need investment,” he commented after the IMF said on Thursday it would send a team to Cairo soon to examine the request. Continue reading »
The heady excitement on Cairo’s streets which followed the ouster last month of Hosni Mubarak, the former president, has been replaced by gloom, at least if you are an Egyptian shopkeeper having to cope with a dramatic drop in business.
As tourists fled and local and foreign investors took fright at the political uncertainty which followed the fall of the Mubarak regime, the economy has taken a hit. Continue reading »
After more than five weeks, it’s still unclear when Egypt’s stock exchange (pictured) will reopen. Trading was suspended on January 27, two days after the start of the protests which brought down the regime of Hosni Mubarak. Several reopening dates were set by officials, then missed.
The main reason, analysts speculate, is that the government expects the market to plummet as soon as it reopens. In the meantime, there’s frustration. Continue reading »
The latest delay to the reopening of Cairo’s stock exchange has tipped the impatience that some market players were feeling with the authorities into downright anger.
“They are just looking for excuses,” said one broker from a major firm. “They have no real reason for this. They are just afraid to take a hit. It is like someone who faces an exam, but he is not prepared and his book has been burnt, so he is avoiding it because he doesn’t want to fail.” Continue reading »
Tunisia has for so long been presented as an oasis of stability in a turbulent region that some might find it hard to imagine there is enough pent up anger in its small population of ten million people to fuel weeks of rioting over unemployment which began mid-December.
One need only compare Tunisia with its neighbours to understand the country’s claim to stability; to the east is unpredictable Libya under its mercurial leader Muammar Gaddafi; to the west, Algeria with its opaque regime and recent past of deadly civil strife.
But with the recent protests, should investors be concerned now that growing instability will spread to the markets? Continue reading »
Egypt has just held another of its noisy elections. There are widespread allegations of fraud, violence and intimidation in favour of the ruling National Democratic Party. The Muslim Brotherhood, the banned group considered the largest opposition force in the country, has pulled out from the run-offs after independents it backed failed to win a single seat in the first round.
Is this a prelude to instability that could scare business? Probably not. Yet it is a reminder that Egypt lacks inclusive politics, at a time when there’s uncertainty over who will succeed the 82-year-old president, Hosni Mubarak – the biggest issue raising concerns about the country as an investment destination. Continue reading »