Interviews – Daily News Egypt http://www.dailynewsegypt.com Egypt’s Only Daily Independent Newspaper In English Sat, 25 Feb 2017 15:52:01 +0000 en-US hourly 1 Projects of Matrouh Conference to come into force within 3 months: Governor   http://www.dailynewsegypt.com/2017/02/23/616016/ http://www.dailynewsegypt.com/2017/02/23/616016/#respond Thu, 23 Feb 2017 06:00:40 +0000 http://www.dailynewsegypt.com/?p=616016 Unused fixed assets of the governorate amount to about EGP 100m

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Egypt’s Matrouh governorate prepares to put all projects proposed during the economic conference—dubbed as “Matrouh, The Future of Investment” and held in October 2015—to force within three months, Matrouh Governor Alaa Abu Zeid announced during an interview with Daily News Egypt.

Does the governorate intend to organise a second economic conference in the coming period after the first conference succeeded to attract investment of more than EGP 100bn?

We will not hold another economic conference until we complete the implementation of all the projects of the first economic conference in Matrouh, of which three have already been launched so far. We also expect the launch of a tourism and real-estate project in the ​​Foka area in Dabaa, while other projects will come into force sequentially within 2-3 months.

It is scheduled that the first phase of the Maxim tourism project will be inaugurated in June, at a cost of EGP 14bn in the Sidi Abdel Rahman area. About 45% of the construction works of the first phase has been completed.

The awarding contracts of the economic conference projects were signed in July, received all required approvals from the related authorities, and were incorporated into the strategic plan of the state.

Matrouh Governor Alaa Abu Zeid (DNE Photo)
Matrouh Governor Alaa Abu Zeid
(DNE Photo)

What are the main obstacles facing investors and the role of the governorate in overcoming them?

I feel pity for the investors willing to come to Egypt for investment. When I visited the United Arab Emirates (UAE) for marketing the Matrouh economic conference and offered investment opportunities in the governorate, the Emirati side was surprised by the idea of ​​marketing the governorate. During the visit, I suggested applying the single-window system to facilitate the required measures for investors. We now have many foreign investors wanting to implement new projects in Matrouh governorate.

I suggested making a map of potential investment opportunities in each governorate and the nature of these projects in order to attract investors to establish new projects in Egypt, since investment became the only resort for Egypt—especially after the recent problems of remittances and the decline of tourism, as well as the shortage of foreign currency. So we should offer investment incentives to encourage investors.

What is the size of the investment plan of Matrouh for the current fiscal year?

The Matrouh investment plan for fiscal year (FY) 2016/2017 amounted to EGP 550m, which were directed to development, service, and infrastructure projects in the eight towns of the governorate.

The investment plan of the governorate in FY 2014/2015 reached EGP 75m.

What are the developments of the establishment of the new artisan zone?

We are working to provide the necessary funding for the establishment of the new artisan zone affiliated with the Ministry of Industry. The new zone will be built on an area of 112,000sqm and located at Kilometer 9 on the coastal road, so as to be away from the residential areas. The artisan workshops would include car maintenance, trade, and blacksmiths. The first phase of the project costs about EGP 10m—financed by the Ministry of Industry. The new zone is to be implemented over two phases at a total cost of EGP 20m. The cost of the project is based on supply and demand mechanisms, as we cannot spend EGP 40-50m to establish new workshops without fully exploiting them.

How many lands were withdrawn from non-serious investors recently?

The governorate has not withdrawn any land from investors during the last two years, as we work to eliminate obstacles facing investors and help them finish their projects.

During the evaluation of the investment proposals, we take into account the identity of the investors, their previous work, and financial solvency, in collaboration with the Administrative Control Authority (ACA) to avoid the withdrawal of land from investors.

Are there any projects held by the governorate in partnership with the private sector?

No, but we are studying the establishment of a dates factory in Siwa with a company specialised in this field and other investors using a usufruct system. The governorate will receive part of the profit, and the investor will take over the factory’s management, operation, and maintenance, as it was stalled for more than 10 years, being rehabilitated by the UAE’s side. It is scheduled to receive the factory by the end of February or early March.

Siwa has about 700,000 palm trees, which produce 84,000 tons of dates, with an average of 120kg per palm.

What is the size of the governorate’s unused fixed assets?

The governorate includes three unused assets, including the land of a cinema complex, a dates factory, and the El Salam market, with an investment value of about EGP 100m. Those assets have not been used for a period of 10-12 years in spite of being ready for usage, but they stopped, and the governorate works to attract investors to re-launch them.

The El Salam market was established in 2009 at a cost of EGP 9m, but it has not been exploited. We also launched the Safir hypermarket and signed the contracts of the project using a usufruct system for 25 years. The new hypermarket is planned to provide 300 job opportunities for the residents of Matrouh, with salaries ranging from EGP 3,000 to EGP 4,000.

Cinema Rim was also closed for many years, but we have recently launched the cinema complex beside a new under-construction mall and hotel.

The dates factory was established in Siwa, but it has not been delivered or operated due to technical flaws in the machines. The factory has been rehabilitated recently to provide more than 120 job opportunities.

What is the value of investment projects scheduled to be implemented in the current year?

The upcoming investment projects worth more than EGP 150bn, including industrial, agricultural, recreational, and service projects, as they are not limited to tourism, as some people claim.

The governorate takes into account several points before the establishment of investment projects, including the development of all towns in the governorate, which has a maximum population of 500,000—although it is the second largest governorate in the country. We also take into account that all towns get benefit from the projects to prevent the internal immigration from one town to another searching for jobs.

For example, El Alamein has the largest economic activities in the governorate due to the continuous development and tourist projects. Therefore, we need to balance the distribution of projects and provide jobs for all the residents of Matrouh, the Nile valley, and the Delta region.

 What are the most prominent projects in the governorates?

There are some major projects, including Entertainment World Company’s project built on an area of 1,300 acres in Matrouh. The project includes an open desert zoo and a water park, and it also includes a group of hotels and a hospital.

There are also agricultural and livestock projects in Siwa, as well as Korean IMG Company’s projects to establish three sewage plants in Marsa Matrouh, Siwa, and El Alamein. The Emirati Bin Haider Real Estate Company and the Saudi Arabian Trading and Construction Company (SATCO) also have some projects to develop the Ageeba and Rommel beach areas, through the establishment of hotels, chalets, restaurants, and a dancing fountain.

The governorate has signed with Wadi Degla Company the contracts for establishing a hotel in the Shabib area in Dabaa two weeks ago. It is scheduled to build the planned hotel on an area of ​​116 acres—with an investment cost of EGP 855m—within a period of three years.

The hotel would include 1,316 rooms and 316 villas, in addition to a water desalination station, sewage and power plants, swimming pools, playgrounds, and sports services. The project is expected to provide 1,000 temporary jobs during its implementation and 700 permanent jobs.

What is Siwa’s share of the development plan in the province?

The first and second International Festival for Egyptian Dates were held in Siwa in cooperation with the UAE, which also signed a protocol with the governorate to establish five schools in Siwa, one of which is an agricultural high school.

The protocol includes the establishment of a solar power plant with a capacity of 10 megawatts and two electricity-generating units with a capacity of 10.4 megawatts at a cost of EGP 30m.

In addition, Bakka Company for Building and Construction implemented a number of agricultural and investment projects in Siwa, including a fish farm, an olive tree farm, and a factory for producing olive oil.

Al-Sanabel Company for Poultry and Agricultural Investment launched a project to produce all types of salt, while Delta for Agricultural Development has established a water filling station.

What are the total job opportunities provided by the governorate over the past year?

The governorate provided more than 9,500 jobs in all towns during 2016.

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Decision to relieve expatriates from car customs for a dollar deposit according to car model: immigration minister http://www.dailynewsegypt.com/2017/02/20/decision-relieve-expatriates-car-customs-dollar-deposit-according-car-model-immigration-minister/ http://www.dailynewsegypt.com/2017/02/20/decision-relieve-expatriates-car-customs-dollar-deposit-according-car-model-immigration-minister/#respond Mon, 20 Feb 2017 06:30:29 +0000 http://www.dailynewsegypt.com/?p=615784 The ministry is working on several files in the coming period including insurance, pensions, and subsidies for Egyptian expats

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The Ministry of Immigration and Expatriate Affairs Nabila Makram said that the committee formed to discuss the customs exemption on cars of Egyptian expats and to determine the amount of money according to the car’s model, year of manufacture, and engine size.

Makram told Daily News Egypt the cars will be divided into segments, with each segment being approved a certain amount of money by the committee. The decision will be accepted immediately after the approval of the Ministry of Finance to the cabinet for consideration.

What is new about the decision to exempt customs on cars of Egyptian expats?

Work is in full swing among all collaborators to exempt customs on expatriates’ cars.

There is a committee formed by the ministry, known as the Customs Exemption on Expatriates’ Cars Committee, which includes representatives of the finance and interior ministries; the Central Bank of Egypt (CBE); and the governmental Customs Agency, including its commerce, industry, and taxes departments. The required proposal for customs exemption on cars is to work for at least one year abroad.

What is the number of cars allowed for exemption per family?

The committee determined one car per family can be exempted. The proposal does not require the final return to Egypt in order to apply for customs exemption. The exemption will occur in accordance with guidelines and conditions, including dividing the cars into segments, of which each segment has a specific value of the amount transferred in order to maintain the interest of the state and protect Egyptian expats.

In order to strengthen the national industry, the committee also grants exemption of the same amount to those who choose to buy a new locally assembled car.

What is the value of the amount to be transferred?

A committee was formed under the auspices of the Ministry of Immigration and Expatriate Affairs that includes officials from the Finance, Foreign, and Interior Ministries and from the CBE to study a mechanism for exemption or reduction on customs duties on these cars. The committee is considering exempting cars from customs when they were expatriates are heading to Egypt by transferring specific amounts internationally through national banks in foreign currencies over one year. The expatriates are able to withdraw the amount in Egyptian pounds, depending on the value of the dollar at banks.

The amount of money is determined according to the car model, the year of manufacture, and the engine size. The decision will be transferred immediately after the approval of the Ministry of Finance to the cabinet for consideration.

The Ministry of Social Solidarity asked for a report with the number of Egyptian expats who are interested in the insurance, so the ministry called on Egyptians to register on the website of the ministry in order to determine their numbers.

The minister met with economics and psychology professors at the Cairo University to take advantage of their academic expertise in the draft law before it is submitted to the cabinet.

What are the projects that the ministry is working on during the coming period?

There are a number of files that the ministry is working on during the coming period, especially the Egyptian expats’ health insurance. The insurance includes all the benefits and services of the expatriates to create pensions and insurances, in addition to insuring a part of their treatment, judicial assistance, and financial aid in cases of partial and total disability or death.

The ministry is seeking to complete the file of customs exemption on expatriates’ cars, which will become the first acquired right of Egyptians working abroad upon the completion of the law proceedings.

The ministry is working on registering all Egyptian expats and establishing a database for them, and then linking them to state institutions to take advantage of their different capabilities. This is in addition to the declaration of the National Institute of Expatriates Scientists and Experts, chaired by Magdi Yacoub and a number of Egyptian expat scientists. The institute aims to benefit Egypt with bright minds.

There was an announcement of the merger immigration and manpower ministries. What is the ministry’s statement on this?

The Ministry of Immigration and Expatriate Affairs is working day and night without paying attention to reports about the possibility of merging with the Ministry of Manpower. We seek to work with seriousness and diligence to achieve concrete achievements so that we are always at the trust of President Abdel Fattah Al-Sisi, who has a clear vision for the return of the Ministry of Immigration and Expatriate Affairs again after merging it as a section within the Ministry of Manpower after 20 years.

The ministry has made great strides in the health insurance of Egyptian expats. Why did it stop?

It did not stop. The ministry is working hard to meet the rights and needs of Egyptians living abroad, and therefore the ministry has signed a protocol of cooperation with the National Council for Human Rights. The protocol of cooperation includes the rights of Egyptians living abroad through establishing pensions and insurances for Egyptians who are in different countries around the world.

The ministry also prepares a draft law of compulsory insurance for Egyptian expats to take part of their treatment, judicial assistance, and financial aid in cases of partial and total disability or death. The draft law will be presented to parliament immediately upon its completion.

The ministry aims for insurance to become the responsibility of the state, not the sponsor, because in some Gulf states, insurance is the sponsors’ responsibility and not the state.

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Careem targets expansion in 40 cities nationwide in 2017 http://www.dailynewsegypt.com/2017/02/15/careem-targets-expansion-40-cities-nationwide-2017/ http://www.dailynewsegypt.com/2017/02/15/careem-targets-expansion-40-cities-nationwide-2017/#respond Wed, 15 Feb 2017 06:00:19 +0000 http://www.dailynewsegypt.com/?p=615482 We have agreed with a financing company to fund the purchase of cars for those who want to work for Careem, Shalaby says

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Careem, an online cab-booking app, aims to achieve a monthly growth rate of 30% in 2017, according to the Hadeer Shalaby, general manager of Careem Cairo.

Shalaby says that Careem agreed with financing companies to fund the purchase of new cars for those who are willing to work for Careem and do not have a car, offering financing of EGP 30,000 for each new car.

Hadeer Shalaby, general manager of Careem Egypt (Photo Handout to DNE)
Hadeer Shalaby, general manager of Careem Cairo
(Photo Handout to DNE)

Careem is one of the largest transportation service applications on the regional level, but it faces strong competition in the Egyptian market. How do you see that competition and what are your competitive advantages?

Competition is very important and motivates us to improve our services to provide high quality services for customers. Our service is growing very quickly due to being new, and we aim to increase our growth in Egypt rapidly, so we are not worried about the competition. Actually, it is in the interest of the client, because every company seeks to provide the best quality service at the lowest prices, and this contributes to enlarging the size of the market.

In regard to our competitive advantages, we are a local and regional company; therefore, we focus on Arab clients in general, and Egyptians in particular. We are looking forward to offer the service that fits with the Arab clients’ needs, and we also have the flexibility to modify and develop our application in line with the needs of the Egyptian customer.

For example, after the launch of the service in Egypt we found that most of our customers in Egypt cannot pay by credit card, since only 3% of the Egyptian population owns a credit card. Therefore, we amended the application within less than a month to allow cash payment. The same thing happened when we decided to offer taxi services. This proves our flexibility, especially as Cairo represents the largest market for Careem, amounting to 38% of the company’s total business, so Egyptian customers are a top priority for us.

What are the most prominent requirements by Egyptian customers?

Safety, quality, and affordable prices. For Egyptians, the price is one of the most important points, and it should be appropriate in order to stimulate the Egyptian customer to leave his car and use the Careem service.

Will Careem change its drivers’ commission after the change of service prices?

We did not increase or reduce the prices. We have just modified the pricing system, so as to ensure the customer has the highest benefit. We have reduced the initial fees to encourage clients who want short rides, and we raised the charges of each kilometre. Additionally, we reduced the waiting fees, making our services the cheapest during traffic jams.

How many drivers are working for Careem?

We have about 50,000 drivers and aim to increase their number to 200,000 by the end of this year, as we now recruit nearly 10,000 drivers monthly.

What is the company’s turnover rate?

There was a high turnover rate in the beginning, but it decreased significantly after the drivers now feel that they are partners in the company, as we have provided health insurance as well as discounts at many clothing stores and food markets.

What is the company’s targeted growth rate in Egypt?

We are targeting a growth rate of 30% per month during the current year.

Careem has recently obtained new investments. How do you plan to use these investments?

We obtained an investment of $350m, taking our market value to about $1bn in the fourth quarter of last year. We became the first company in the Middle East, whose market value recorded $1bn. Elsewedy Electric, owned by Egyptian businessman Mohammed Elsewedy, is the main investor in Careem.

We aim to use this investment to develop our services and ensure that they are of high quality by hiring employees who examine the quality of Careem’s service. Those employees would use the service like ordinary customers to test the quality of service provided.

We also aim to expand our services nationwide. Careem currently offer its services in seven cities, and we aim to reach 30-40 cities by the end of this year. We also plan to increase the number of our call centre staff to reach 1,000 employees by the end of this year, compared to 300 now. Additionally, we study offering a new product in the next three months.

One of your competitors has agreed with a financing firm to finance the purchase of cars for those who interested in working with them. Do you have similar plans?

We have already agreed with a financing company to fund the purchase of new cars for those willing to work for Careem and do not have cars—with EGP 30,000 per new car. In addition, we have agreements with Ghabbour Group and Kia to provide special discounts for our drivers in cases of purchase or maintenance.

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Proposed investment projects worth EGP 50bn: Red Sea governor http://www.dailynewsegypt.com/2017/02/14/proposed-investment-projects-worth-egp-50bn-red-sea-governor/ http://www.dailynewsegypt.com/2017/02/14/proposed-investment-projects-worth-egp-50bn-red-sea-governor/#respond Tue, 14 Feb 2017 06:30:48 +0000 http://www.dailynewsegypt.com/?p=615392 Provision of 5,000 jobs for youth as well as 200 feddans for microprojects

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Red Sea governorate Major General Staff of War Ahmed Abdullah said that Hurghada is one of the most important sources of income for Egypt, considering that its tourism comes from its natural wonders. He added that the Red Sea includes other tourism cities, such Marsa Alam, Ras Ghareb, and El-Quseir, all of which make the governorate a place for investments across all fields, pointing out that it was the first to implement the one-stop shop project.

The Red Sea governorate is a fertile soil for investments. What sort of investments have there been recently?

We put forward an ad two months ago to allocate 13 projects, including seven that fit within the investors’ criteria. We are currently undergoing contracting with these projects, which are worth EGP 4.2bn. We also posed another ad to allocate 42 projects worth EGP 49bn. Investors have been asking for the pamphlet’s terms. In the coming period, we will launch a third and fourth ad.

What does the implementation of the one-stop shop for investors within the governorate mean?

We have implemented the one-stop shop project that allows investors to obtain all necessary permits and approvals. We complete all required paperwork before investors sign their contracts; so when they do come, they are granted the licenses easily.

What is the governorate’s current investment plan?

Previously, Hurghada and the Red Sea were only considered tourism destinations, but now investment in the desert around them is ongoing. All of our coming projects aim to benefit from the desert surrounding the province through tourism services, such as educational tourism. This is done by establishing two private universities, in addition to a sports tourism plan, which includes establishing a sports city. Furthermore, we also aim to unlock shopping tourism. Arabs and foreigners have a shopping culture, and we intend to capitalise on that. We also plan to establish cultural tourism by setting up a national museum in cooperation with the Ministry of Antiquities. In addition, there will also be poultry and shrimp farm projects. In Ras Ghareb, there is also a petroleum project. All of these projects will be posed in ads three and four, after receiving some approvals from the government, including approvals from the Ministry of Defense, the Ministry of Environment, and the Egyptian Mineral Resources Authority (EMRA).

What about youth projects?

We have set aside 50 feddans in Hurghada, 50 in Ras Ghareb, 50 in Safaga, and 50 in El-Quseir to start small and micro enterprises for the youth.

We are currently working on the creation of decent jobs for young people and providing trainings for them to pursuit suitable opportunities. The youth refuses to work for the private sector. Yet, I have offered 5,000 jobs for the youth from the Red Sea governorate and from outside of it. It is worth mentioning that over 80% of employees at the governorate are composed of the youth.

How much is the total value of projects in the governorate?

The proposed projects are worth EGP 50bn, in addition to the provisions of El Reef El Masry Company, which will pose 500 feddans of its lands to investors and 1,000 feddans to small-scale farmers to establish packaging and sorting factories.

Is the governorate in need for quarantines or licensed automated slaughterhouses?

We have some investors in Safaga and Hurghada in these sectors. We do not need more than that for now. Even better, we looked further and established an area for automated slaughterhouses equipped with freezing facilities.

What about water desalination projects?

We have the largest desalination plant in Egypt. As for the grey-water project, we are currently working with Al-Reef Al-Masry Company to make sure that plants cover the largest part of agriculture with a capacity of 80,000 tonnes at a cost of EGP 750,000. This plant will be inaugurated in two months. It operates through two phases to produce green water. We are also developing all plants to raise the capacity to 90,000 metres via triple cycles, which can allow for cultivation of tomatoes, cucumbers, and some vegetables, but will not put out drinking water.

What is the governorate agenda for the completion of these projects?

As soon as we sign a contract with investors, they are granted three years to start establishing their project. To other investors, we grant them land without water or electricity at a cheaper price. In some cases, we provide lands equipped with facilities but at higher prices.

How did you help investors rid obstacles?

Thankfully, we do not have any major obstacles. I tried helping investors by postponing due dates for payment of water and electricity bills and ease procedures through the one-stop shop. Over the past two years, we implemented some projects at a cost of EGP 8.5bn, including roads, ports, and barricades. Next week, we are set to hold a conference to offer all the investment opportunities in the governorate.

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Future of Egypt-USA economic relation is brighter under Trump: Egypt-US Business Council Chairman http://www.dailynewsegypt.com/2017/02/09/614977/ http://www.dailynewsegypt.com/2017/02/09/614977/#respond Thu, 09 Feb 2017 09:00:30 +0000 http://www.dailynewsegypt.com/?p=614977 Since President Abdel Fattah Al-Sisi came to power in Egypt, the relations between Egypt and the United States of America has been shaky, forcing some investors to fear that the relationship between both countries would deteriorate. However, since Al-Sisi’s meeting with president Donald J. Trump before he was elected, both of them have shared many …

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Since President Abdel Fattah Al-Sisi came to power in Egypt, the relations between Egypt and the United States of America has been shaky, forcing some investors to fear that the relationship between both countries would deteriorate.

However, since Al-Sisi’s meeting with president Donald J. Trump before he was elected, both of them have shared many common views, such as on the Syrian crisis and on combating terrorism.

Their shared vision on many topics has raised new questions about the future of Egypt-US relations.

In less than a month, Trump seems to be having a large impact on the global economy, by reviewing and rejecting global trade agreements put in place by his predecessors and in the way in which he has dealt with his closest allies.

But how could Trump’s administration deal with Egypt economically? And would he work on deepening ties with Egypt?

Daily News Egypt interviewed Omar Mohanna, the Chairman of the Egypt-US Business Council in Egypt, who believes that the future will be better for the bilateral relations of both countries.

How do you see the bilateral relation between the US and Egypt?

We can say that there are positive signs of a burgeoning friendly political relation between the US and Egypt. The US supports Egypt in its fight against terrorism. Fighting terrorism is one of the most important issues for the new US administration, which could create common ground for deeper relations between both countries.

Could the policies of the new US president affect economic relations between both countries?

Some people believe that Trump, with his promises to revise international agreements and to “make America great again,” would push his country into isolation, reduce cooperation, and also reduce American investments around the world.

I believe that such a thing might happen with great competing countries such as China. The restrictions Trump is going to impose won’t affect us.

Egypt is a very small economy compared to the US, which tells us that such a thing won’t happen to it.

How could the Egyptian government attract more American investments?

I believe that implementing reforms such as the flotation of the Egyptian pound, establishing better investment environment, helping investors solve their problems, and providing important services such as electricity will help Egypt attract more US investments.

Trump’s will to impose restrictions won’t affect the Egyptian-American economic relations.

It is also important to mention that after signing the loan agreement with the International Monetary Fund (IMF), Egypt’s image among investors changed.

Do you think that investors from the US generally want to invest in Egypt?

Egypt didn’t witness any outflows of American investments during its worst cases before the flotation, or even in the previous period when there was an absence of police in the streets, and total lack of security, not even one American company decided to exit the market.

What the government should do is promote Egypt’s investments opportunities with American investors, it’s the only way to convince an investor to pump money into a country. Although implementing previously noted reforms is a must.

What are the most suitable investments sectors for American investors?

American investors work perfectly in sectors of infrastructure, energy generation, and all forms of industry.

Why would Egypt be attractive for investments from the US? 

Egypt is the most important gateway to the whole African market. Investing in Egypt gives the opportunities of benefiting from great agreements that targets huge amounts of consumers in different markets in Africa, the Arab league, and outside of the Middle East and North Africa (MENA) region. Egypt could be a main base and centre for all American products, in order to be exported to all African and Arab markets.

Egypt also has an amazing location between three continents, which makes it very special for exporting, and also has a very trainable and cheap labour force.

There are upcoming decisions that could make Egypt more attractive, such as approving the establishment of the Egyptian Food Safety Authority, and also the revision of medicine prices that would attract medical companies.

We must not forget that Egypt is a market of 92 million consumers, which makes it a very attractive market, because it has a very huge demand that is not available in any other market in the region.

How could Egypt play an important role for American products outside of the MENA region?

I don’t think that Trump will sign the free trade agreement with Europe that former president Barak Obama was negotiating for. He also wants to shut down a lot of agreements such as the North American Free Trade Agreement (NAFTA). Such decisions might affect exports from the US, which might lead investors to put their money in a country like Egypt.

Egypt has agreements that will help any investor in the world export to Europe without any taxes such as the Egypt-Europe Association Agreement, which makes Egypt very attractive for American investors if such a thing happened.

Minister of Investment Dalia Khorshid said that American investments in Egypt have a value of $2.33bn. Will this number increase in the nearby future?

The value mentioned by the minister is incorrect. The total value of American investments is approximately $23bn. We have to be more objective; we have to improve our investment climate in order to attract more investments.

I believe that the current Egyptian administration wants to improve the investment climate, and it has been doing that through the issuance of a lot of decisions such as subsidy cuts and the flotation of the Egyptian pound that gave it its real price. If the government continues at the same rate, we will attract investment from the entire world.

When can Egypt attract investments in technological industries sector?

It’s hard to predict such a thing now when Egypt still has all of its current problems. It’s also important to mention that the country must be committed to its near market needs. This makes it hard to talk about American technological industries in Egypt now. However, Egypt could attract a lot of other important industries, which could be exported to all nearby markets.

Can Egypt attract American investments in the Suez Canal Economic Zone (SC Zone)?

Definitely, the SC Zone was visited by more than 50 different investors, and they held a meeting with Ahmed Darwish, chairperson of SC Zone, and talked about investment opportunities, in spite of the fact that bilateral relations between US and Egypt were not at its best.

We as the Egyptian-American chamber encouraged American companies to conduct that visit, and many old and new companies in the Egyptian market participated in it, either looking to establish new investments or to expand existing ones. We as a chamber are looking forward to more visits in the future.

In Egypt, what are the sectors that American companies have investments in?

Petroleum products and chemical industries come first, then the food industry, medical industry, engineering and motors industries.

American investments in all of these different sectors make them very important to Egypt. It’s important to mention that Coca-Cola’s factory in Assiut is its newest factory in the world, which exports its products to 40 countries.

Are you optimistic about the Egyptian-American economic relationship in the future?

The future of Egypt’s economic relationship with the US will be bright if the Egyptian government is serious about implementing economic reforms.

 

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Finance Ministry presents tax reform plan of 2017 http://www.dailynewsegypt.com/2017/02/09/614924/ http://www.dailynewsegypt.com/2017/02/09/614924/#respond Thu, 09 Feb 2017 08:00:54 +0000 http://www.dailynewsegypt.com/?p=614924 We are working to add amendments to the tax law to postpone capital gains and approve investment incentives in tax law: El-Mounir

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The tax reform is one of the most important economic reforms; therefore the government assigned special priority to the project through the appointment of a deputy finance minister for tax policies.

The government also approved the passage of tax legislation, including the application of the Value Added Tax (VAT) Law and the Law to End Tax Disputes, in recent months.

This is in addition to drafting amendments to the Income Tax Law, in order to postpone applying the tax on capital gains for three years, after the Supreme Council for Investment approved the postponement decision and added tax incentives to the Investment Law, which were approved by the cabinet.

Daily News Egypt interviewed the deputy finance minister for tax policies, Amr El-Mounir, to find out more about the government’s vision on tax reform in 2017.

What are the main tax reforms during 2017?

The Ministry of Finance is currently working on a number of amendments to the Income Tax Law to postpone the tax on the stock exchange for three years, in light of the Supreme Council for Investment’s decisions.

The ministry is also working on drafting tax incentives for the new investment draft law and plans to include it in the Income Tax Law. This comes beside the completion of drafting tax discount rates appropriate for lower-income groups, in order to protect these segments of society from economic reform decisions.

The ministry is currently in the stage of determining the financial impact, according to different scenarios for the discount rates to be applied to all people—employees and non-employees.

What is your point of view concerning the House of Representatives’ approval on tax exemption up to EGP 24,000?

The ministry will meet with the House of Representatives in the coming days to discuss its decision to raise the limit of tax exemption to EGP 24,000 and to find out if this decision will be applied to employees only, marking an increase from EGP 13,500 to EGP 24,000, or whether it will include non-employees, which would mark an increase of EGP 17,500, from EGP 6,500 to EGP 24,000.

We agree with the House of Representatives to reduce the financial burden on lower-income groups and we will consider other alternatives to tax exemptions, such as tax rebate or credits, which will be applied to segments of society according to their incomes.

The House of Representatives approved in its meeting to raise the tax exemption limit for individuals to EGP 24,000 compared to EGP 13,500, the current exemption value.

What about the issuance of executive regulations of the VAT Law?

It is planned to issue the executive regulations on the VAT Law during the first half of February.

Is the Ministry of Finance currently discussing other tax reforms?

The ministry is targeting to establish a unified law for tax measures that seeks the equality of proceedings among income, value-added, and real estate taxes, while these tax laws should include processors in accordance with international norms.

We are working to complete a new customs law that fights smuggling, promotes and protects the national industry, and tightens sanctions.

What is new in the activation of the neutral pricing system, especially since foreign companies have a big interest in applying it?

The ministry will work to activate the neutral price system and it is already participating in a database for the first time to apply the neutral pricing system on people that are currently in the database, and we began to list transactions made between people in the previous years.

He added that the activation of the neutral pricing system would lead financiers to reveal all their business operations through a tax return so that they do not attract penalties and fines as a result of non-disclosure.

The neutral pricing system is known as the price agreed upon among non-connected parties that practice similar business activities under the terms and conditions of the open market.

There are multiple ways to calculate the neutral pricing, including the free comparative pricing method, which determines the price of a commodity or service among the related parties according to the price of the same commodity or service agreed between a company and unrelated persons.

Also, this method depends on the comparison between a commodity and another similar service, taking into account the legal conditions, market conditions, and specific conditions of the process.

While the second method is the total cost plus the profit margin: according to this method, the price of the commodity or service among the parties related to the total cost of the item or service plus a percentage—as a profit margin—for the benefit of the selling company or the company that provides the service. The profit margin is determined according to the profit margin earned by the financier in their transaction, which is completed with independent third parties, or by the profit margins obtained by an independent party in other similar transactions.

The third way is the resale price: according to this method, the price of the commodity or service among the parties is determined according to the resale price to a third party after deducting a reasonable profit margin percentage. The profit margin is specified according to the profit margin obtained by the same seller through their transactions with independent third parties. The profit margin can also be specified based on the profit margin earned by independent financiers in similar transactions.

Is the public tax authority able to apply the neutral price correctly?

Of course, we held a training course during the current month on the implementation mechanism in cooperation with the Organisation for Economic Co-operation and Development (OECD) to educate the authority’s young people qualified to work in this area, and we will continue to hold these courses at frequent intervals.

Do companies suffer from public tax authority delays in completing their tax accountability during the clearance process?

In order to enhance the efficiency of the tax system, we will unify the companies under clearance to complete the examination of these files and its fiscal/tax accountability in a short period.

What about the freelance sector that recorded a high percentage of tax evasion?

We are working on establishing a central unit for freelancers within the public tax authority, in order to ensure the collection of the tax fairly. Self-employed people and freelancers are not committed to tax payment and their tax evasion percentage is high.

Is it possible to achieve tax targets of EGP 433bn this year?

Of course, and we hope to achieve tax targets amounting to EGP 433bn by the end of June, which is equivalent to 13% of the GDP. Collection indicators are good so far, and we have achieved tax assessment by nearly 100% during the first half of the fiscal year. We have large amounts of unsettled adjustments with many authorities, including the Egyptian General Petroleum Corporation (EGPC).

1200 files are being transferred from the shareholding companies to the senior financiers’ centre to complete their examination and pay the due taxes, in order to increase the toll.

In spite of a decline in tax revenues due to the delay in the application of VAT, we managed to achieve these values during December.

Does the Ministry of Finance intend to activate the supreme council of taxes, especially as it is stated in the law?

The Supreme Council for Taxes’ activation is to be conducted through a presidential decree; we should put the tax system back to the right legislative and executive track in preparation of forming the Supreme Council for Taxes.

What about the integration of the unofficial economy into the formal system?

We are studying supply contracts for units of electronic connection between the authority and a number of commercial activities, in which buying and selling processes will be registered directly in the public tax authority. If the probation succeeds, it will be applied on the level of the republic.

The merger of the informal economy is a simplified system for small and medium-sized enterprises (SMEs), and activation of cashless transactions through the National Council for Payments to promote the culture of dealing via a billing system.

What about increasing tax revenues on real estate transactions, especially as its value is estimated at EGP 500m only? 

We formed a central unit for real estate inventory to count these transactions, and we already started in pilot areas, such as Nasr City and Maadi, with computerised programmes to activate and increase their rates.

The tax rate is 2.5% without any reduction on the total value of the transaction of the built-up real estate area. This is also imposed on lands for building real estate, except for villages, regardless of whether or not any buildings have been erected on it.

Inheritance properties are exempted from this tax, as well as providing in-kind property as a share in the capital of joint companies, provided they do not dispose the corresponding shares in a period of five years.

 

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Russian trips to Egypt will reactivate the tourism sector: El Zayat http://www.dailynewsegypt.com/2017/02/09/614917/ http://www.dailynewsegypt.com/2017/02/09/614917/#respond Thu, 09 Feb 2017 06:00:58 +0000 http://www.dailynewsegypt.com/?p=614917 There should be a study for supply and demand, lands should be offered according to this mechanism, sector needs should be determined

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The past six years were the most difficult years in the history of the tourism sector, according to Elhamy El-Zayat, chairperson of Emeco Group. El-Zayat said that those who work in the tourism industry should not lose hope in its recovery during the coming period.

El-Zayat noted in his interview with Daily News Egypt that Egyptian tourism is capable of recovery in a short period, since Egypt is full of diverse tourism resources such as beaches, antiquates, and safari opportunities. He noted that we should expect the return of Russian trips to Egypt during the upcoming few days.

How do you see the future of tourism in the coming period in light of the challenges experienced by the sector?

Despite the challenges experienced by the sector over the past six years, the sector is still capable of recovery in light of a significant improvement in security indicators over the past two years.

An important aspect to be noted is that Egypt is not the only country suffering from terrorism in the whole world; the only difference is that Egypt is located in a volatile region in the Middle East, with Libya to the west, and Syria and Iraq to the east.

Following the improvement of security procedures at Egyptian airports, the resumption of Russian trips to Egypt is expected in a short period. Germany resumed its flights to Sharm El Sheikh, which already raised hotels’ occupancy during the last two weeks.

There are complaints from workers in the sector that hotels are suffering, especially in replacement and refurbishment processes. What do you think about that?

The complaints are real, and I think that the Central Bank of Egypt (CBE) launched an initiative worth roughly EGP 5bn to fund the replacement and renewal processes for floating hotels and car fleets. The initiative will be a step forward to resolve such problems.

The launch of this initiative indicates that the banking system supports the state and aims for the sector to recover within a short period of time.

I know that hotel revenues declined during the last period, but the surrounding circumstances are very difficult. We are better than others, but Egypt is fighting a media war targeting its tourism sector.

I believe that the recovery of the tourism sector will impact many economic sectors, such as industry and agriculture.

You need to know that every room in a hotel provides a job opportunity to three individuals, which is a high employment rate, and this will reduce the unemployment rate in Egypt.

The employers in the tourism sector invested their revenue surpluses in tourism projects at the sea or in South Sinai six years ago. The investment at the time provided more employment opportunities.

How do you evaluate the low ratio of skilled labour in the sector during the recent period?

During the recent period, the tourism sector has lost one of its most important elements: skilled labour. Skilled labourers left Egypt and travelled to other countries in the region to find jobs. The unskilled labour remained, which necessitates beginning the training operations.

The tourism sector before 25 January 2011 registered more than 3.5 million workers, whether direct or indirect, but the situation now is completely different.

Hotels and businesses stopped the training programmes during the last period due to the decline in tourist influx to Egypt.

How do you judge the tourist influx to Egypt during the last year?

The Ministry of Tourism doesn’t provide us with data about the tourist influx, but it certainly declined; however, I expect the indicators to rise again during the current year.

In the last period you opposed the offering of lands for the establishment of new tourism projects. What do you think of the offerings implemented by the General Authority for Tourism Development?

There were more than 225,000 rooms operating in Egypt during the recent period, and there are 200,000 rooms under construction. We also saw how high hotel prices were in Egypt during the past period.

We cannot continue renting hotel rooms in Egypt at a price of $12. What is the service level provided to guests at such low prices?

The current prices will not continue because of hotels’ capacity in light of the decline of tourism.

I wonder: What if the 200,000 rooms under construction entered operations right now? Is there a demand in Egypt to capitalise on the current hotel capacity? I do not think so.

There should be a study of supply and demand, and lands should be offered according to this mechanism to determine what the sector needs. Egypt needs three-star hotels, especially in Cairo, Alexandria, and other touristic areas, such as at the Red Sea and in South Sinai.

I sense optimism in your words. What is behind that?

Egypt is unique in the region as it possesses special tourism resources. In the winter, tourists wish to enjoy its temperate climate, its proximity to Europe, and the short duration of the trip with a low cost of transportation.

The cost of accommodation and tourist services provided to guests is affordable. You can have a week off in one of the excellent tourist areas at the Red Sea for only $400.

Despite the advantages Egypt possesses, there are still a lot of problems: traffic, media, travel bans, terrorism in the region, and a lack of encouraging events.

 

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HTC sales increased by 40%, although overall market sales dropped by 10%: HTC Middle East & Africa President http://www.dailynewsegypt.com/2017/02/08/614743/ http://www.dailynewsegypt.com/2017/02/08/614743/#respond Wed, 08 Feb 2017 07:00:38 +0000 http://www.dailynewsegypt.com/?p=614743 More than 70% of our employees are focusing on R&D

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The Egyptian market is still important, despite the devaluation of local currency and monetary issues, according to Nikitas Glykas, HTC Middle East & Africa President (MEA). In an interview with Daily News Egypt, Glykas said that despite a drop in general phone sales by 10% on the Egyptian market, HTC was able to achieve an increase of 40% in its sales. He also noted that over 70% of the company’s employees are working on research and development (R&D) of products.

What are the opportunities you see in the Egyptian market?

We have studied the Egyptian market, and even though there is purchasing power in it, it is not very strong because of the currency devaluation and monetary issues. Respecting our brand, we are enjoying big growth, more than 35% last year.

What about the challenges?

They are everywhere. For us, the most important thing is how to fight the challenge. We have raised our market share in some categories to more than 20% of the local market; and this is a success.

Nikitas Glykas, President, HTC Middle East & Africa (Photo Handout to DNE)
Nikitas Glykas, President, HTC Middle East & Africa
(Photo Handout to DNE)

What is your plan for Egypt?

We are interested in having a high-end market share, but it is not big in Egypt because most consumers would not want to pay EGP 15,000 for a phone. Consumers’ needs are what matters. This is about the nature of consumers. Innovation is a part of our brand, and we will continue to innovate because what we do different than others is listening to customers regarding to what should be changed.

What are the mother company’s plans in R&D?

More than 70% of our employees are focusing on R&D. It is in the heart and soul of HTC. This is what we have been doing for the past 20 years and what we will continue to do. We are competing with big players in the market.

What is your targeted market share?

We are targeting more than 10% of the market share for all of our products.

Does HTC plan to open a factory in the local market?

In general, phones do not have a long life-cycle; so the more diverse production facilities are, the less competitive you will be. It is important to offer the consumer the products at a very reasonable price. We prefer to keep the production facilities close together.

How do you plan to compete in the Egyptian market?

Basically, our whole plan is very straightforward: we want to be visible. We want our audience to always be able to see and hear us. We have new phones, designs, and innovation, and we also have a very good availability in the market.

Do you have a plan to launch products in lower market segments which might be more suitable for the Egyptian customers’ current circumstances?

This has been our strategy for the past two years. We have released a lot of products in the lowest price range of HTC. What you need to understand is that you need to succeed on the high end, because if you do, you are able to meet other segments too. Because high-end is where innovation starts and nobody makes money from lower-end products.

Are there any strategies to bring in more service centres?

We are increasing the number of service points. In some regions, we offer better services than we have to. We take services very seriously, but I do not have specific calculations of the number of these centres; however, we cover all of Egypt.

2016 saw a drop of 10% in the market of mobile phones in Egypt. How has that affected you?

We increased our company’s sales by 40%. In order to gain more traction in the market, we need to get to the lower-end products. We enjoyed almost a 40% increase on the phones with 5.5-inch screens.

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Accelerating issuing of laws will help improve business environment, attract investments http://www.dailynewsegypt.com/2017/02/07/614786/ http://www.dailynewsegypt.com/2017/02/07/614786/#respond Tue, 07 Feb 2017 20:00:20 +0000 http://www.dailynewsegypt.com/?p=614786 We should think about integrating incorporating entities before preparing the public offerings programme to increase efficiency

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The Egyptian Financial Supervisory Authority (EFSA) has almost completed its preparation of laws and regulation amendments of the past three years, which have been sent to ministers from various ministries.

Amendments to the executive regulations of the capital market law were completed, besides the micro-finance law and the executive regulations of the moveable collateral law.

The legislation of the capital market law, amendment to insurance law No.10, amendments to the executive regulations of the Insurance Law, and the leasing and factoring law are all awaiting the approval of the Ministry of Investment to be sent to the cabinet, the State Council and then the parliament for passage.

What is the role of EFSA in the legislative reform?

There are a number of laws and regulations that are being worked on that do not belong to the EFSA; however, there are some fundamental issues that need to be put up for community discussion to take some points into consideration, especially as they are general laws governing all companies and will subsequently affect the activity of the non-banking financial sector.

The EFSA is currently preparing for the competition protection and monopolistic practices law, which includes the need for prior approval for any sort of acquisitions. The authority met with a group from the Egyptian Competition Authority (ECA) to discuss the law and clarify the extent of the difference in sectors.

The nature of sectors differ in terms of the maximum limit proposed by the ECA, which is EGP 250m. This might be a large amount for some sectors, but it represents a very small value for the banking sector and oil companies. There are entities and authorities that already oversee acquisitions in some sectors, such as the EFSA which oversees non-bank financial activities, and the Central Bank of Egypt (CBE) which oversees banks.

The bankruptcy law, which was approved by the cabinet without presenting it for community discussion, has some aspects that must be consulted by all sides. The law intervenes in determining the responsibilities of board members of large economic sectors. It also addresses the nature of transactions among companies that hold and manage accounts between depositors and owners of interests and the industrial and commercial companies, in which the risks of trading on third party funds decrease.

Do you think that presenting legislations for community discussion with related parties is important?

Laws must be put up for societal debate through sessions to find out the reasons some articles are included and the because of the possibility of finding better solutions. This should be done so that legislation does not harm business.

We are trying to communicate with the authorities based on the preparation of various laws so that we can discuss them before they are presented to the parliament.

The EFSA posted many demands to the Ministry of Investment two years ago for amendments to the Companies Law, which is the parent law for the establishment of companies in Egypt.

On the other hand, the EFSA is awaiting the issuance of a large number of legislations that were sent to the government by the end of 2016. Legislations include the leasing and factoring law, the capital market law—which was sent a year ago—as well as amendments to the current Insurance Law, and insurance law No. 10.

The EFSA completed the legislation that increases the efficiency of the control processes, regulates the establishment of companies, develops financial tools, and organises the unorganised markets. We are waiting for the legislation to be passed in order to enhance the efficiency of the capital market system and to improve the ranking of Egypt’s Business Performance Index. A delegation from the EFSA visited those who are in charge of preparing the index in the US to brief them on the latest updates in the legislation and business performance improvement file.

There are some financial tools that have not been added to the market, such as short selling and futures, which are included in the capital market draft law. The EFSA can activate the rest without the need for a legislative amendment—if the amendment’s requirements are available.

We included the futures exchange in the capital market draft law amendments and passing the law will allow the interested parties to establish futures exchange.

What is the situation of index funds so far and what are the latest updates?

In light of the presence of a real demand on Egyptian stocks, I wonder why Egyptian indicators are not registered in foreign exchange to be traded in foreign exchange.

Bold decisions are taken and foreign investors, especially in the financial services sector, have shown a great interest. The current challenge is to take advantage of this interest by attracting investment for projects.

The general climate has become more encouraging, which is appetising to investors following the decline of asset prices after the Egyptian pound’s flotation.

What do you think about offering state-owned companies in the stock exchange in the coming period?

The government’s planned initial public offerings (IPOs) must attract foreign institutions interested in the Egyptian capital market, so their restructuring plans, share ratios, and IPO sizes must be clear. The IPOs will definitely be affected by the consequence of the pound’s flotation, and the IPOs that are less than EGP 1.5bn-2bn require the offered company’s value to be not less than EGP 5bn.

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IDWBE negotiates with international companies to reform administrative structure http://www.dailynewsegypt.com/2017/02/05/614148/ http://www.dailynewsegypt.com/2017/02/05/614148/#respond Sun, 05 Feb 2017 08:30:56 +0000 http://www.dailynewsegypt.com/?p=614148 I assumed chairmanship of the bank in April 2016 with deferred losses of EGP 1.5bn and a supportive loan of EGP 2.5bn from CBE, says Fahmy

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The Industrial Development & Workers Bank of Egypt (IDWBE) is negotiating with one of the biggest international companies specialised in the field of corporate restructuring, to conduct a comprehensive administrative reform to the bank, according to chairperson of the bank Maged Fahmy.

Fahmy said, in an exclusive interview with Daily News Egypt, that he assumed the position of chairperson of the bank in April 2016, when the bank was suffering deferred losses of EGP 1.5bn and supported by a loan from the Central Bank of Egypt (CBE) worth EGP 2.5bn.

He added that by the end of 2016, the bank had achieved high growth rates across all its indicators, where the bank financial position increased by 32%; 87% in deposits, 34% in loans, 114% in small- and medium-sized enterprises (SMEs), and 42% in retail banking.

Maged Fahmy chairperson of The Industrial Development & Workers Bank of Egypt (IDWBE) (Photo by Nagy Youssef)
Maged Fahmy chairperson of The Industrial Development & Workers Bank of Egypt (IDWBE)
(Photo by Nagy Youssef)

What is the situation of IDBE in the market now?

I assumed my duties as chairperson back in April 2016. The bank was suffering several problems at the time, as a result of the conditions following the merger with the Egyptian Workers Bank.

The merger resulted in a weak financial status of the bank, and was required to configure many allowances for non-performing debts.

The size of deferred losses in April was estimated at EGP 1.5bn. The bank was living off a supportive loan provided by the CBE worth EGP 2.5bn.

Besides the problem of the bank’s financial position, it was also suffering a major problem with its administrative structure, next to a problem in its infrastructure.

The main administrative structure was problematic—most of employees were seniors, while, at the same time, salaries were very low compared to market standards.

How did you deal with these problems?

The first step was to identify the problems and their degree, which was what we did, followed by putting together a vision for dealing with them. We penned a work plan for a number of years and submitted the plan to the CBE for approval. We have already started implementing this plan.

What are the main features of that plan?

It may not be appropriate to disclose the exact details of the plan yet.

But, let me tell you that with regard to the reform of the administrative structure of the bank, which is very important for fixing the financial position and starting the next phase. We are currently negotiating with one of the largest international companies operating in the field of corporate restructuring to design a new administrative structure for the bank. This will also be supported by another financial institution that will pay the cost of restructure. This plan is expected to take about six months.

Hamdy Azzam deputy chairperson of The (IDWBE)
Hamdy Azzam deputy chairperson of The (IDWBE)

As a start to the reform process, the board of directors has recently issued a decision to promote Hamdy Azzam, executive board member, to deputy chairperson. We also brought in experts from outside the bank to lead several departments that should improve, such as human resources, risk management, and legal affairs. I also hired 100 new graduates, who were carefully selected, to benefit from their ideas along with the experienced employees.

The reform process has also included putting together a medical healthcare scheme for the bank’s employees and changed the fleet to look after our employees, as the old fleet consisted of mostly dilapidated and unsafe vehicles.

With regard to the reform of the financial structure, I submitted an unconventional idea to the CBE for this regard. We are currently waiting for its approval. Yet, we do have alternatives that we may resort to if the CBE does not grant the green light.

One solution which we turned to, is to exploit the main building of the bank located on 90 street in Fifth Settlement.

This building is of an area of 29,800 sqm. It was nothing but a concrete establishment abandoned for years. I signed a contract with the National Service Products Organization (NSPO) to renovate the building. We were lucky to sign the contract before the flotation of the Egyptian pound. The company has already started its work and expects to be completed within the coming 18 months.

All main departments will be moved to that building; however, only half of it will be utilised. The other half will be used through leasing or similar means. Moreover, we also plan to sell the department buildings in other places, such as Galaa, Talaat Harb, Emad El-Din, and Maarouf streets in downtown.

In order to also exploit the assets of the bank, we have revived our subsidiary International Co. For Leasing (Incolease) which was established with a capital of EGP 170m. The company has had a licence for financial leasing for months but never actually operated yet.

We appointed Eman Ismail as chairperson to the company. She was granted full powers and independence from the bank. Ismail is a renowned figure in the field. She is currently selecting her work team and designing the strategies. I expect the company to have a bright future in financial leasing during the coming period.

What about the bank’s performance indicators since you assumed its duties?

The bank has achieved great growth rates and results thanks to the efforts of all its employees.

By the end of December 2016, the bank has achieved a growth rate of 32% in its financial position, an increase of 87% in deposits to reach EGP 4.2bn, and 34% boost in loans to register EGP 5bn. The bank also increased its support to SMEs to reach EGP 1.2bn, and realised growth of 42% in retail banking to reach EGP 500m.

Furthermore, the bank also achieved significant growth in profits during the last year, but it is too early to disclose the exact figure at this time, especially as our statements are being reviewed by the Central Agency for Public Mobilization and Statistics (CAPMS).

What are the main sectors that were granted loans from the bank?

As a bank specialising in the financing industry, it is natural that this sector takes the largest proportion of the bank’s loans.

Industry accounts for about 55% of the total loan portfolio of the bank, and the rest goes to retail banking, mortgage finance, real estate, and other sectors.

The bank is also ranked fifth among the banks participating in the mortgage finance initiative launched by the CBE to finance housing units for low- and middle-income citizens, supported by a portfolio of EGP 125m. The funds were channeled to finance purchasing of 1,350 residential units, with more in the pipeline. We also signed an agreement with Gharbiya governorate to finance projects there to sell real estate units to low- and middle-income citizens.

What about SMEs?

We are also ranked fifth in financing SMEs with a portfolio amounting to EGP 1.2bn. This goes beyond 20% of our loans, which is the ratio stipulated by the CBE early 2016 over four years.

We continue to fund and support SMEs due to our belief in their importance in the revitalisation of the Egyptian economy and the elimination of unemployment, reducing imports and increasing exports, thus supporting the country’s foreign exchange resources.

Also, the bank will grant funds to organisations to relend them to micro enterprises. We are very interested in these projects, but they are very difficult to finance directly by the bank, as they require large administrative apparatus and high costs.

What about the retail banking activity?

I personally do not believe in retail for consumption purposes. We are facing circumstances in which you should not support consumption. Hence, the bank focuses on financing retail development, whilst making good profit. This way, we are serving our country while easing the burden on low-income citizens.

In this context, we are strongly taking part in the mortgage financing initiative. We also signed several contracts with governorates to connect houses to natural gas.

Under these agreements, the bank pays for the full cost of connecting gas, while owners repay instalments for this cost over a period of up to seven years. This supports low-income citizens, help the government’s plan, and bring benefit to the bank itself.

We are currently negotiating with the Holding Company for Water and Waste Water to install consumption metres, as well as talks with Egyptian Electricity Holding Company for similar deals.

Besides retail activity for the purposes of development, we have started issuing credit cards in 2016, which was the only retail activity accepted by the bank, considering the role they have in supporting the state’s plan to rely further on electronic payments. We hope to obtain a proportion of the electronic payroll system implemented for public servants.

The bank also grants personal loans to employees of some companies in very limited circumstances to help them.

What about the geographic expansion of the bank?

We currently have 18 branches in 16 locations.

We aim to increase the number of branches to 50 branches over the next five years, focusing on Upper Egypt and some Lower Egypt provinces outside Cairo. We want to reach SME owners.

A large number of these branches may be small so that we do not have to pay huge investments.

What about the bank’s proceeds of foreign exchange after the flotation? And does the bank have any pending requests?

I want to explain that the size of collected hard cash mainly depends on a bank’s geographical expansion, its locations, and clients.

Due to the nature of the bank, most of the existing branches are located in the industrial places. However, the proceeds of the bank after the flotation increased, reaching $0.5m per day sometimes.

We, like the rest of the banks, cover customer requests on the US dollar according to the size of liquidity available. We only have pending requests of $5-6m, which is very little.

Where do you see the bank in the future?

The bank has a role that I try to maintain: supporting industry. We also hope to expand in financing SMEs even more.

In addition, we are working to change the mental image of the bank, own a strong financial position, spread further, and carry a non-conventional role to serve the national economy.

What are your expectations for the future of the US dollar, and the Egyptian economy after the flotation?

Some thought once we float the Egyptian pound, we wait for results—but this is not true at all.

The flotation was just a step. We should take more steps now, including work to boost resources and revenue of the state and coordinate between all state bodies to achieve this goal.

When we succeed in achieving this, the economy, the state, and citizens will all become better and the Egyptian pound will reach its fair value against the US dollar.

My last word would be that we have to work, produce, lower imports, boost exports, and pay taxes to serve this country; thus, fixing our conditions.

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Trump has a good chemistry with Al-Sisi, but what matters is the situation on the ground: Kamal Abou Okeal http://www.dailynewsegypt.com/2017/02/01/613703/ http://www.dailynewsegypt.com/2017/02/01/613703/#respond Wed, 01 Feb 2017 09:00:30 +0000 http://www.dailynewsegypt.com/?p=613703 I am optimistic about the return of Russian tourists soon, but I am against the nuclear power plant, says Kamaal Abou Okeal

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As the world is closely watching the new policies of US president Donald Trump, there are several questions yet to be answered about how the new US administration will affect the rest of the world, particularly concerning the turmoil in the Middle East and the Israel-Palestinian peace process.

Egypt, being an essential regional player, is also at the heart of international relations among superpowers, especially in light of its openness and cooperation with Russia.

Daily News Egypt conducted an interview with Kamal Abou Okeal, member of the Egyptian Council for Foreign Affairs and a member of the German Council for Foreign Affairs (DGAP), to discuss the latest developments on Egypt’s foreign relations with Israel, Europe, the US, and Russia.

Do you agree that the Egyptian-Israeli relations are “at their highest levels” in history?

This is a very complex subject that has very deep roots and it is very important to understand the origin of the Egyptian-Israeli relationship. Here is a look at what you need to know about the Camp David Accords as I was an observer of the agreement that took place between former president Anwar El-Sadat, former Israeli prime minister Menachem Begin, and former president Jimmy Carter in Washington on 17 September 1978. Before the signing of the agreement, I received a call from the secretary of El-Sadat at the time, Fawzy Abo Hafez, who informed me that they would not come to an agreement with Israel as they are very hawkish and want an agreement on their own terms.

However, El-Sadat insisted on certain terms. Egyptian expats in Washington were alarmed that we were prepared to make so many concessions to the Israelis. Each party saw worthiness in resolving the dispute through negotiations under an American umbrella, but the two sides still had fundamentally different approaches to peace.

Suddenly, it was announced that the agreement was signed. Later, I was invited by the Egyptian ambassador in Washington to meet with El-Sadat together with some activists living in the US at that time. El-Sadat explained that he did not like the treaty and was not happy with most of its terms; however, that this agreement will give Egypt equality with Israel, meaning that if they will get a US dollar, we will get the same and if it will get an F16 or tanks, we in return will get the same. The agreement also guaranteed the complete withdrawal of Israeli armed forces and civilians from the Sinai Peninsula.

When I met with Carter, I discussed with him if this treaty will allow for parity between Egypt and Israel vis-à-vis the US. He explained that this never happened because El-Sadat never broached the subject of parity. El-Sadat was a patriotic man, a man who fought and was a political activist. He did what he could do under very difficult and debatable circumstances because part of our country was occupied; however, in my opinion, this treaty set the stage for a negative image for us as it allowed Israel to become a superpower in the region.

More recently, Israel considered former president Hosni Mubarak their biggest strategic asset. Now, they are making use of our security concerns and our fight against terrorist elements. There is a definite cooperation between Egypt and Israel which makes us able to increase the number of forces in Sinai, more than the treaty would allow because in many parts of the Sinai Peninsula, the Camp David Accords stipulate that Egypt is allowed a limited military presence, and closer to the border, Egypt is allowed to field police officers only.

In order to have peace in the region, first we should have parity between Egypt and Israel. Egypt is a big country with a great history which goes back thousands of years. Unless Egypt has its natural state of power, there will never be real peace in the region. What kept peace in Europe for over fifty years is parity; they call it Mutual Assured Destruction (MAD). For example, the North Atlantic Treaty Organisation (NATO) has enough destructive capabilities to destroy the nations under the Warsaw pact and vice versa. This balance of power is what kept the peace. In the Middle East, if we have a balance of power between the biggest countries, it will keep the peace and allow us to reach an agreement regarding the Palestinian issue.

The Palestinians cannot negotiate with the Israeli side, because in order to have an equitable agreement, you have to have more or less equivalent power. Negotiations that take place between a very powerful party and another weak one, turn to be a dictation, and this is not a recipe for peace. A proper recipe for peace is equality.

You were among the very few intellectuals in Egypt who predicted the victory of Donald Trump. Do you think he will change the long-standing US policies on major issues and crises in the region?

I was able to predict this unexpected victory because I lived in the US for years and I know the mentality of American people and how they think. They like to have change. They voted for Barack Obama, a democratic black man who was the polar opposite to George W. Bush. In history, they voted for Nixon who was a crook, then for Carter, who was a man of purity. Now, Trump is different than Obama. He is a white businessperson, extremely rich, and speaks the language of the common and blue collar people.  Americans were upset with so many issues, such as the North American Free Trade Agreement (NAFTA) and the faltering economy as companies moved their factories overseas. Trump was able to ride the wave of American discontent and win the race.

In order to understand his attitude, we should wait and see how he will confront all major issues in the Middle East. His cabinet members make me a bit anxious; his secretary of state Rex Tillerson, who was the CEO of EXXON and a well-known businessperson, is practical and a pragmatist. He is also known to have a good relationship with Russia, which represents a positive signal for peace in the world. Tillerson is a neutral person regarding foreign policy and does not have much experience.

On the other hand, Trump’s nomination of David Friedman as ambassador to Israel is very much worrying, because he is a proponent of settlement construction in the occupied Palestinian territories, not just theoretically but also practically. He spent $58,000 of his own money as donations to build new settlements there. Also, Trump promises to move the US embassy from Tel Aviv to Jerusalem, which is a position not accepted by anybody. Even though congress has often suggested and demanded this move on several occasions, it never took place because it is against international law as it is an occupied territory and it has to be negotiated.

Turning to Egypt, Trump has a good chemistry with President Abdel Fattah Al-Sisi, but from my experience the personal relations are only part of the equation. What matters is the situation on the ground and what is good or beneficial for each country, so let’s wait and see. When we think about the US presidential administration and policies towards the Middle East, we have to be practical and pragmatic about how the world goes and evaluate what we can do and what we cannot. If Trump has good relations with us, then let’s hope for the best.

What does the British-Gulf reconciliation indicate and how would it affect Egypt?

I do not think there is a direct relationship. Britain next March will start negotiating the Brexit, exiting from the European Union (EU) which is expected to take two years. Britain is the second largest economy in the EU, Germany is number one.  Britain’s exit is hard as it will be considered a foreign country. They will be required to have visas, pay customs, and so on. Britain is going to have a transition that is not as they expected it to be. They thought it was going to be a soft exit which would allow them to metaphorically “have their cake and eat it,” meaning that they would retain the common market while restricting free movement from the EU. The main reason which made 52% of British people decide to leave the EU is the free movement of workers, the idea that if you are Polish or Hungarian, you can set up a shop in England or apply for a job in any British factory. This made British people upset because they think Eastern Europeans are taking their jobs.

When the British discovered that they were going to lose lots of money, they had two options: either to be independent or rely on the facilities provided to them through the EU were they do most of their business. Independently, they have to play on two main parts in the world, the US and the Gulf. I expect that British prime minister Theresa May and Trump will be very close to each other. May went to the Gulf to maximise business ties with them, and to soften up the negative effect of their exit from the EU and this has nothing to do with Egypt.

How do you evaluate Egyptian-British relations and the position of the members of the House of Commons adopted toward the Muslim Brotherhood in Egypt? Do you think they will change their attitude?

I do not think that Britain will change its attitude towards the Muslim Brotherhood. It has been this way for a very long time. Change is probably going to take place in the US. I do expect that Trump will take a much harsher stance towards all sources of political Islam including the Brotherhood. The British don’t change their opinions often. They are very conservative, and they have certain rules and regulations. Britain is changing and there will be fundamental changes later. The clashes taking place between May, who is a conservative, and Labour deputy leader Jeremy Corbyn, who is liberal and the leader of the opposition, is an example. There is a breakdown in the UK. Scotland is edging to leave together with Northern Ireland in order to stay in the EU. On the other hand, Germany did not want Britain to leave; however, they are very strict in making any concessions to the British.

Why are hard-line right-wing parties making gains in Europe? How will this affect the Middle East in general?

This is a very important question because the most far-right parties in Europe have increased in popularity during the past period. You have the Alternative für Deutschland in Germany, the UK Independence Party (UKIP) in Britain, and the National Front led by Marine Le Pen in France. All these far-right parties achieved electoral success along with the migrant crisis and unstable economic growth.

Syria’s civil war has generated the worst humanitarian catastrophe of our time. Half the country’s pre-war population with more than 8 million people have been killed or forced to flee their homes. About 4 million stayed in Syria and the rest went to Jordan, Turkey, Egypt, and Europe.

The far-right claim that Europe is facing a Muslim invasion; on the other hand, negative opinions about Muslims are much more common among European citizens in general. When I was in Germany, I realised that all the posters on the streets were bearing anti-migrant messages. The fears that the flow of refugees will lead to more terrorism and will affect the economy are considerably more pervasive among UKIP supporters and the National Front in France. There is a hidden feeling of Islamophobia, and I do not know who is feeding this notion. However, such feelings hinder democracy by not accepting one of its fundamental principles which is equality before law. The problem is that such hateful feelings may lead to violence against minorities.

Are there any European intentions for financial aid or investment in Egypt?

We should depend on ourselves rather than aid. The EU is the largest economy in the world, followed by the US and China. However, I still remember in the past when Egypt used to give Britain aid and assistance. After the first world war, Britain owed Egypt over $100m and after the second world war, Egypt was a creditor to the British with $5bn, which they never paid back.

It could be beneficial if we negotiate easier terms for constructions of power stations such as the Manzala and Beni Suef stations, which will provide us with 4.8 MW of electricity and will cost around EUR 3m.

What we really need from Europe is training for our workforce because they are experts in all fields such as mechanics, carpentry, etc. The most important thing we need is to receive appropriate vocational training, which will give the required technical knowledge and hands-on experience in different jobs, and they can provide us with this intensively.

What about Egypt-Russia relations in 2017? Will they remain the same or will there be a breakthrough, especially after so many agreements have been signed between the two?

Our relationship with Russia is not bad, plus there is chemistry between Al-Sisi and Russian president Vladimir Putin. I am optimistic about the return of Russian tourists soon. Russia knows our weight in the region; however, I am against the nuclear power plant because of its very high cost and its high risk such as slow leakages of radioactive material, long emergency shutdowns, and meltdown due to overheating. Unfortunately, nuclear power plants have a long record of industrial incidents and is never far away from the next nuclear catastrophe. That’s why I am not with this project; however, they may help us in many other things such as solar production, tourism, and wheat.

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Samsung agrees with major outlets to enable instalment services for home appliances and mobile devices http://www.dailynewsegypt.com/2017/02/01/613612/ http://www.dailynewsegypt.com/2017/02/01/613612/#respond Wed, 01 Feb 2017 06:00:43 +0000 http://www.dailynewsegypt.com/?p=613612 5% expected decline in value of mobile sales in 2017

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Samsung expects the mobile market to see a slight retreat in sales value through 2017. The company expects a retreat of 5%, while the last year came to an end with a retreat of 10% year-on-year, affected by the Egyptian pound’s flotation and the retreat in the purchasing power.

According to Sherif Barakat, executive vice president of Samsung Electronics Egypt, the company is planning to begin enabling instalment payment services in February for all the company’s products whether they are home appliances or mobile devices, with the aim of minimising the effect of the reduced purchasing power of the Egyptian consumer.

After the pound’s flotation, there is a significant retreat in the purchasing power of the Egyptian consumer. How is Samsung facing that?

First, I have to stress the importance of the Egyptian market for Samsung. We are committed to our investments in it. After the pound’s flotation, a retreat has occurred in the consumers’ purchasing power, in addition to an increase in inflation rates. So, we are working on enabling our products for the consumers by offering payment facilities.

Our plan is to launch an instalment payment campaign for all devices, whether they are home appliances or mobile devices, starting February.

We are working on conducting agreements with big outlets such as Raya, B.Tech, and the outlets affiliated to Delta company—which includes Mobile Shop, Computer Shop, Radio Shack, and Compu Me—to enable the sale of our products in instalment payments. We have already started taking real steps to reach an agreement with B.Tech.

Some of these outlets already offer instalment payment services; however, through our cooperation with them in that field, we will facilitate inquiries, as well as other procedures that come before selling in instalments.

In addition, we are working to enable products with varying specifications and prices to meet the needs and financial capacities of all customers. Moreover, we are working on selecting a specific device in each price segment to offer it at a lower price in order to alleviate the retreat of the consumers’ purchasing power and absorb the price increases as much as possible.

Sherif Barakat, executive vice president of Samsung Electronics Egypt (DNE Photo)
Sherif Barakat, executive vice president of Samsung Electronics Egypt
(DNE Photo)

What are the pillars of the company’s strategy in 2017?

The Egyptian market is going through harsh economic circumstances; also, the inflation has affected all segments of society. However, we are continuing to invest in the Egyptian market whether through our screen and television factory in Beni Suef or manufacturing air conditioners in cooperation with Raya. Moreover, we are working on increasing the number of products manufactured in the local market.

In spite of these circumstances, I see that the Egyptian economy is strong and promising, especially because it is backed by a large unofficial economy; such kinds of economies have the ability to absorb crises. Moreover, floating the pound makes Egypt an attractive country for investments due to the retreat in the pound’s price against the US dollar.

In the coming period, we will work on increasing our presence and spread in all sectors; we have been discussing expanding our manufacturing activity in the Egyptian market with our parent company since mid-2016. Now, we are studying the market to look into the mechanisms of manufacturing some of our products locally, whether home appliances or mobile devices.

However, there is a major important point the state has to take into consideration to encourage manufacturing mobile phones locally: lifting customs on their components. There are customs varying between 5-10% imposed on these components, while the mobile phones are imported without customs.

Also, we are working on carrying out our plans to develop schools technologically in the next period; 35 schools were developed last year.

Recently, companies have been setting new prices for their devices almost weekly. Do you expect the prices to stabilise?

The periodic pricing of devices is a result of the fluctuation in the dollar’s price; however, we expect the prices to stabilise in the second half of this year. The dollar’s price is expected to reach EGP 15-16 by that time.

Does fixing the price of the customs dollar affect the prices’ stability?

Fixing the price of the customs dollar (the dollar’s price upon which the customs on products are calculated) positively affects the price of home appliances and will cause the prices to stabilise for a while. However, it will not affect the price of mobile phones because no customs are imposed on them, or on computers.

How do you see the Egyptian market’s growth?

The Egyptian economy is going through difficult circumstances; nevertheless, it achieved an economic growth of 4% which is an acceptable rate, while the government is targeting to increase it to 7%. If that happens, a tangible jump in the economic situation will occur. The circumstances Egypt is going through now are like the circumstances South Korea lived in the 1990s to a large extent, after which its economic boost occurred.

The Egyptian mobile market saw 5-6% retreat in sales last year until November; however, November saw a significant retreat in sales after the pound’s flotation, as the retreat rate reached 20%.

According to our expectations, the total sales of the mobile market in 2016 is expected to retreat by about 10% compared to 2015, while the market in 2017 is expected to see a similar rate of sales or a retreat by a maximum of 5%, in terms of the financial value of the market’s sales. That is because the Egyptian consumers make the buying decision in such circumstances based on the availability of a “good deal.”

What is your share in the mobile market?

December sales have not been announced yet by the specialised bodies; however, we expect that we acquired 40% of the mobile market in 2016, keeping on our position in first place. We are also targeting to increase our market share to 50% in 2017, while our share in the television market is expected to be 35%, with a plan to raise it to 40% in 2017.

You talked about manufacturing air conditioners locally in cooperation with Raya. What are your plans in that regard?

We produced about 10,000 air conditioners from October to December, and are targeting to increase sales in the next period; however, we cannot determine accurate numbers because it is a new market for us.

In addition to the flotation, what measures does the investment climate need for more improvement?

We are waiting for the investment law, which I expect to improve the investment climate a lot, based on the law’s drafts that have been published.

What are your plans to stimulate sales in the mobile market?

We restructured the incentive plans of the mobile traders: traders get commission based on their sales to customers, not the size of their purchases from the distributors.

How do you expect the competition of the A family devices in the market to be?

We launched the A family mobile phones two years ago; they aim to attract young customers by providing the specifications they need at competitive prices when compared to the specifications. So, we recently launched the A5 and A7 of 2017. We equipped these two phones with the newest in advanced technology; both of them come with water and dustproof screens, all made of Gorilla glass.

Both mobile phones are equipped with two strong cameras that suit the youths’ use, as well as the battery. Also, the design of the two phones is not less than the designs of Samsung’s first class devices.

We contracted with three Egyptian artists to lead the advertising campaign of the A family mobile phones: Aser Yassin, Maged El-Kedwani, and Yasmine Sabri.

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Egypt, Turkey now have same stance on Syria; both support Al-Assad: Saeed  http://www.dailynewsegypt.com/2017/01/31/613484/ http://www.dailynewsegypt.com/2017/01/31/613484/#respond Tue, 31 Jan 2017 07:00:20 +0000 http://www.dailynewsegypt.com/?p=613484 Trump’s administration will have its cons that may affect Egypt, though it is better than Obama’s administration, says Saeed

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Egypt has managed to secure several posts in international and regional institutions in 2016. The most significant ones are its membership in the United Nations (UN) security council and its membership in the Peace and Security Council in the African Union.

Nonetheless, Egypt’s foreign policies were not smooth and flawless altogether. 2016 marked severe tension in the relations between Egypt and Saudi Arabia, following significant boost over the past few years. This can be added to the tension between Egypt and Turkey which basically started since the ouster of the Muslim Brotherhood in 2013. The same goes for the United States and Egypt’s unstable relation with the administration of former US president Barack Obama.

Daily News Egypt interviewed political analyst Abdel Moneim Saeed to review 2016 in terms of the bilateral relations between Egypt and countries with which relationships have cooled in recent times, and what 2017 may bring for Egypt. Saeed is the head of Al-Ahram Center for Political and Strategic Studies, and a former member of the Shura Council.

How do you view 2016 in terms of bilateral relations between Egypt and Saudi Arabia and the tension that surfaced at the end of the year?

In 2016, the bilateral relations between Egypt and Saudi Arabia witnessed two things. The first thing was that the relations were at their strongest. This was indicated by the visit of Saudi Arabia’s King Salman bin Abdulaziz Al-Saud to Cairo and the way he was welcomed in Egypt. The Egyptian side was praising Saudi Arabia for its contributions and donations to enhance the Egyptian economy. However, and since the beginning of October 2016, bilateral relations between the two countries have gradually started to deteriorate and the media in both countries have started a war against one another. Both public and official relations between the two countries have been subject to a negative wave. However, after this tension, the relations started to restore again after the Egyptian cabinet decided to refer the maritime demarcation deal regarding Red Sea islands Tiran and Sanafir to parliament. 2016 marked both a significant up and severe down between the two countries.

What caused the diplomatic tension between Egypt and Saudi Arabia?

I surmise the tension resulted from diplomatic failure, because there were obvious differences in the policies of each country. However, there was a failure in administering the different perspectives that turned into crises and tensions. The bilateral relations will never be as strong as they used to be in the past. Another reason for the tension are the opposing factions, both in Saudi Arabia and in Egypt. These factions shed light on the defects in the bilateral relations between the two countries; hence, pressuring the ruling power and incite it against the other country. Numerous Saudi liberals and writers believe that giving Egypt loans and investing in it is futile and will not benefit Saudi Arabia whatsoever. Those liberals have a problem with the ruling power in Saudi Arabia. The same goes for Egypt with leftists, liberals, and nasserists, who took advantage of the Tiran and Sanafir case to use it against the ruling regime in Egypt and direct public opinion against Saudi Arabia. The third thing is that it is normal that the two countries may have different visions and policies. Gulf countries misinterpreted what Egypt’s President Abdel Fattah Al-Sisi meant when he said that it won’t take the Egyptian army too long in case of danger. I believe that Al-Sisi meant the Egyptian army will instantly move to help in case there is a direct invasion or danger in any of the Gulf countries, but the Egyptian army will not intervene if the Gulf countries want to make military interventions in other countries. The blurred stance of Egypt has resulted in several tensions between the two countries, because Saudi Arabia was waiting on Egypt to take steps in Syria and Yemen.

Another thing is that Saudi Arabia has recently found itself in a position where it has to ally with the Muslim Brotherhood because they are against Syrian president Bashar Al-Assad. Egypt has demonstrated its stance on the Brotherhood and its full rejection to cooperate with them.

Egypt and Saudi Arabia could have avoided all this instability if they had smarter diplomacy towards this tension. I hope that the improvement that happened in the past few weeks continues.

Regarding the tension with Turkey, do you think there will be any difference in bilateral relations?

The bilateral relations with Turkey are rather complicated, because the tension is mainly based on explicit ideological disagreement since the ouster of former president Mohamed Morsi and the Brotherhood. The Turkish regime, led by Turkish president Recep Tayyip Erdogan, took a rather aggressive position from Egypt. This led to Turkey’s obvious siding with the Brotherhood and giving space in their media to Brotherhood members and some liberal to attack Egypt and its regime.

Do you think that bilateral relations between the two countries cannot be restored?

Egypt and Turkey’s relationship is odd. While on the political level, the relations are rather tense, the economic cooperation is strong and good. Also, Turkish Airlines is very active in Egypt. Practically, the two countries now are taking the same stance on Syria as they both support Al-Assad, after Turkey retreated from its previous support to the Syrian opposition, so Egypt and Turkey are on the same side. Maybe 2017 will witness a compromise between Egypt and Turkey because the current tension is not the norm. I don’t personally have what may confirm that the relations may thrive, but I believe that it is the rational progress of the events.

How will the bilateral relations between Egypt and the US change under the administration of Donald Trump?

I said during the presidential campaign in the US that it doesn’t matter if Hillary Clinton or Trump won the elections, because the administration of both would lead to better relations with Egypt and alleviate the tension. Obama was against the ruling of the armed forces in Egypt, or their contribution to ruling the country. He personally opposed the Egyptian administration. Both Clinton and Trump didn’t have this personal stance, particularly Trump because he is in line with Al-Sisi regarding several issues, including combating terrorism and Islamic State (IS). It is now more valid to form an effective international coalition to win the war on terrorism. Also, Trump’s administration is relying on Egypt not only regarding the military, but in terms of the ideology to combat terrorism, because Egypt has religious institutions and media figures that may play a role in engaging with people and spread moderate religious ideas to combat terrorism.

How do you view Trump’s anti-Muslim statements and what may be the downsides of his administration?

Egypt may not accept and agree with the anti-Muslim statements. He also has a negative stance on Gulf countries. Trump has a negative attitude towards international trade, and he wants barriers between countries and opposes large global trade deals. This will badly affect Egypt because it benefits from international trade to get major resources. We also benefit from international trade especially after widening the Suez Canal. Furthermore, he has a negative attitude towards the United Nations (UN) and the policies of US aid. He is a businessman and doesn’t want to keep giving aid to other countries.

From a more inclusive perspective on Egypt’s foreign policies, do we consider 2016 a year of success of Egyptian diplomacy or diplomatic failure?

I believe that Egypt’s policy in 2016 was tactical. For example, when it refused to proceed with a voting session at the UN security council on a draft resolution that condemns the illegality of Israeli settlements within Palestinian territories, Egypt’s vision won. Egypt drafted the resolution, and Trump demanded Egypt not to file the resolution so Egypt decided to win a point because it knew that the US will abstain from voting. Then, it voted in favour of the resolution that was filed by other countries after it scored two positive points with the US and Israel. Egypt was positive that New Zealand and the other sponsors will file the resolution, so it decided to play it smart.

However, it wasn’t really in favour of Egypt when it voted on two different draft resolutions of the UN security council. When Egypt voted on resolutions regarding peace in Syria, the first one was filed by France and the second one was filed by Russia. This vote ignited tension between Egypt and Saudi Arabia. The circumstances and context of the vote didn’t help Egypt score positive points. Egypt knew that the French resolution will not pass because Russia will veto it. Also, Russia’s resolution didn’t have a chance in the council because most of the member states will not vote in favour of its resolution.

Trying to please all factions is not always smart, but I do understand the motives behind what Egypt is doing in the international arena. It is going through hard economic conditions and had to go through two revolutions, so it seems rational that it seeks benefits and tries to win over all countries.

 

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Ayadi invests EGP 750m to develop 307 feddans in Qantara: managing director http://www.dailynewsegypt.com/2017/01/30/613336/ http://www.dailynewsegypt.com/2017/01/30/613336/#respond Mon, 30 Jan 2017 08:30:11 +0000 http://www.dailynewsegypt.com/?p=613336 Signing final contract with General Authority for the Suez Canal Economic Zone in April; completion of constructions in 2018

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The managing director of Ayadi for Industrial Development, Moataz Baha El-Din, told Daily News Egypt in an interview about the future plans of the company and its new projects during 2017.  Investing EGP 750m to develop 307 feddans in El-Qantara is one of the most important projects this year.

What is the size of investments of equipping the area of El-Qantara West with utilities and when will the final signature take place?

Ayadi for Industrial Development expects the final contract to be signed with the General Authority for the Suez Canal Economic Zone in April to develop two areas in El-Qantara West, as well as equipping them with utilities. The areas amount to 307 feddans and investments will reach EGP 750m.

The operations in both areas include development and the provision of utilities. The first area amounts to 197 feddans and is dedicated to small- and medium-sized industries in the sectors of food and building materials, while the second area is on an area of 110 feddans and is dedicated to be a logistical area.

When was the first memorandum of understanding with the General Authority for the Suez Canal Economic Zone signed?

The memorandum of understanding was signed in October. The company presented three plans for development and providing facilities, and the General Authority for the Suez Canal Economic Zone is studying them now.

Chairperson of the General Authority for the Suez Canal Economic Zone Ahmed Darwish signed earlier a memorandum of understanding with Ayadi for Development and Investment, with Ayadi for Industrial Development being an industrial developer to conduct technical, economic, and social studies for the general plan of the area in Abu Khalifa in El-Qantara West. This is part of developing the economic zone in El-Qantara West as well as making it ready for investment. According to the general plan of the economic zone, that area will be dedicated to establishing labour-intensive small- and medium-sized enterprises, as well as commercial and logistical services that help in creating more jobs.

How long will the constructions take and under what system will the lands and units be offered?

The period of developing and establishing the units will not be more than a year, especially since they will be steel constructions with steel frames. The lands and units will be offered through a usufruct system for a period of 49 years and will be for Egyptian investors only.

When was Ayadi for Industrial Development established and what is the size of its capital?

The company was established in May 2016 with a registered capital of EGP 5bn and an issued capital of EGP 500m. It is owned by Ayadi for Investment and Development and one of the companies of the National Investment Bank. The company’s chairperson is Osama Saleh, while Ashraf El-Ghazaly is the CEO of Ayadi for Investment and Development.

The financial and technical consultant of Ayadi for Industrial Development is NI Capital, the investment arm of the National Investment Bank. Ayadi for Industrial Development contributes to Damietta Furniture City company by 15%. The first phase of the company is decided to be completed in December 2018. The requirements for 1,530 workshops and 140 factories with investments of EGP 1.1bn will be announced in April, in addition to the services area that includes hotels, a fair ground, and business centres with investments of EGP 3.3bn.

What are the new projects the company is contributing to in Upper Egypt?

Ayadi for Industrial Development will begin to develop Tahta Furniture Complex in Sohag with investments of EGP 350m in May.

The area of the complex is 70 feddans and the Industrial and Mining Projects Authority, affiliated to Ministry of Industry and Trade, has carried out the mission of equipping the lands with utilities, and will complete that project in April.

Ayadi will receive the area to develop it and build the workshops, facilities for exhibitions, and service places, as is the case in Damietta Furniture City.

When will the constructions be completed and what is the number of targeted units?

The number of units targeted to be established in the complex is 1,600 units, and the constructions will take about 1.5-2 years. The company presented to the governor of Sohag an initial work programme for developing the industrial complex.

When will Ayadi for Industrial Development start the execution of the “Your job next to your home” initiative?

Ayadi for Industrial Development is intending to execute the first four industrial complexes in Upper Egypt within the “Your job next to your home” initiative with the aim of developing four villages in Fayoum and Aswan, on an area of one feddan for each village.

What is the available size of investments to develop four villages?

Ayadi for Investment and Development has dedicated EGP 60m to Ayadi for Industrial Development with the aim of developing four villages. The target in the first place was to develop five villages. However, the high cost of developing each feddan—EGP 12m initially, but may reach EGP 15m—has contributed to deciding to develop four villages only as a model for the project to apply it in all governorates later.

When will the project be completed?

The company completed the feasibility studies in early January and is targeting to build 1,000 industrial units in 1,000 poor villages, namely one feddan in each village, in the first phase of the project.

The construction will be on 70% of the area with two floors, and the constructions of the industrial complexes are decided to be completed in six months, once the prime minister approves some procedures that would execute the project.

What are the procedures needed from the prime minister?

Ayadi for Industrial Development wants to communicate with the prime minister through an official memo to set a legal framework for the project and to approve changing the use of the lands from agriculture to commercial use, and to limit their usage for industrial activities. The aim is not to put the company in an illegal position, as the law criminalises building on arable lands.

There will be cooperation with the Industrial Modernisation Center, Federation of Egyptian Industries, and the cabinet to present the villages suggested to be developed.

What is the economic and social aim of “Your job next to your home” initiative?

The project aims at employing 350-500 workers in each unit on a land plot. That contributes to stopping immigration from villages to cities, which is the foundation of development. It also aims to create jobs for women who are the breadwinners in their homes, instead of them facing the dangers of travelling long distances in an inhumane manner in poor transportation for work.

The company’s market studies concluded that 40% of the females in the villages of Fayoum have to go to work in 6th of October City in trucks.

Moreover, it aims at preventing illegal immigration abroad and increasing the youths’ loyalty to the country, in addition to increasing exports to EGP 100bn as a result of increasing production, which contributes to increasing the national income.

What are the industries that will be established in these complexes?

The company will not determine the kind of industries that will be established in these units. This will be left for the advantage each village has in a specific industry or activities. Also, the company is conducting market studies to determine the needs of the villages’ residents and the industries they work in.

He said also that there are villages in Mansoura that manufacture products for international brands like Polo and Lacoste, such as Tanamel village, and the foreign companies send delegations to follow up on the production quality, in addition to Fowa in Kafr El-Sheikh, which is specialised in producing and exporting carpets.

What system is adopted for offering the units and what are the sources of financing?

The units will be offered through a renting-by-metre system with no maximum area for the units. The company provides the needed financing to start the projects through the initiative of the Central Bank of Egypt to finance small- and medium-sized enterprises with an interest rate of 5%.

The company presented the project to the Tahya Misr Fund to participate in the financing, especially since the fund invests its money with zero interests or profits.

How can vocational people be qualified to manage the projects?

There will be cooperation with training centres to qualify them to be able to manage the projects and establish successful administrative and production units, under the umbrella of the formal economy, especially because one of the goals of the project is to turn the informal economy into a formal one.

The company presented the suggestion and the feasibility studies of the project to the government as a model, and does not stipulate executing it. It works on encouraging the companies, especially that it is a non-profit project, while no development and management company agrees to get involved in projects with a profit ratio of less than 20%.

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CIAM targets to manage 2 equity funds during 2017 http://www.dailynewsegypt.com/2017/01/30/ciam-targets-manage-2-equity-funds-2017/ http://www.dailynewsegypt.com/2017/01/30/ciam-targets-manage-2-equity-funds-2017/#respond Mon, 30 Jan 2017 07:30:21 +0000 http://www.dailynewsegypt.com/?p=613332 Egyptian economy in 2017 will reflect a better overall picture, says Abol-Enein

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CI Assets Management (CIAM), subsidiary to CI Capital Holding, is seeking to manage new equity portfolios and funds, in addition to pension and insurance funds, to promote the company’s assets portfolio that currently amounts to about EGP 8bn.

The company also aims to diversify those assets and to compensate the impact resulting from the decisions of the Central Bank of Egypt (CBE) to set a limit on cash capital funds and fixed income by 2% of the bank’s deposits in local currency, which caused big losses for the quality of the company’s funds.

Daily News Egypt sat down with managing director and head of asset management at CI Capital Holding Amr Abol-Enein to talk about his expectations for 2017.

What is your vision for 2017?

I’m generally optimistic about 2017, and I think it will see economic recovery supported by bold economic reforms initiated by the government. The recovery is expected to reflect on the budget of the state and will gradually bear fruit and become visible in the day to day life. So I think that this year will reflect an overall better picture for the Egyptian economy.

Why are you optimistic?

There are good changes, such as the increased remittances of Egyptians abroad that supported the balance in foreign exchange. Also, the size of foreign investments in the Egyptian Exchange (EGX) increased after the currency crisis was resolved, which is expected to be followed by foreign direct investments and is also supported by the devaluation of the Egyptian pound.

The recovery of tourism is also expected this year.

What do you think of the current exchange rate and what are your expectations for the US dollar prices by the end of 2017?

Currently, the exchange rate is determined according to a correct mechanism; however, the current increases reflect the accumulated demand on US dollars, as well as the speculation that had surrounded the currency. This has led to a massive increase in the US dollar price.

I expect that the crisis of the dollar will gradually end with the influx of foreign investment and the return of tourism, which would support the supply of the dollar and drop its price.

What about the interest rate and what are your expectations for the coming period?

I expect interest rates in banks and the US dollar price to decline. They will reach attractive levels and encourage borrowing, which will support the corporate direction for expansion and increase production.

The decline in interest rates will ease the burden of debt on the state budget because the cost of funds paid in the form of benefits would be reduced.

How do foreign investors see the Egyptian economy?

Foreign investors’ thoughts of the Egyptian market dramatically and positively transformed after the country obtained the loan by the International Monetary Fund (IMF). The government’s seriousness about its economic reforms also contributed to that. Also, the resolution of the remittances crisis and the decline in the value of acquisitions which ​​resulted from the devaluation of the currency helped.

Such things support the investment attractiveness of the Egyptian market, so I expect large foreign inflows during 2017, 2018, and the following years.

What is the size of assets managed by the company?

The size of assets under management now is worth EGP 8bn.The company is working to support these assets in the coming period and to compensate the amount that decreased as a result of the CBE’s decisions to set a limit on the size of monetary funds and fixed income, which caused the company heavy losses.

The company plans to compensate these losses through diversifying the size of assets through funds or portfolios.

What are your plans for the future?

We seek to add two new funds to invest in equity and capital funds during the current year. We also compete to manage portfolios of equity of large enterprises, and we are currently negotiating to manage private insurance funds, after the Egyptian Financial Supervisory Authority (EFSA) obliged the funds that exceed assets of EGP 100m to appoint a specialist investment manager.

What about index funds and real estate funds, which the EFSA recently allowed?

The company’s current plan does not include any intention to establish an index fund, but the company is interested to manage real estate funds and would seek to seize any opportunity to manage this kind of funds that invest in an important and vital sector.

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Index fund under study; focus in 2017 on portfolios: Al Ahly Fund and Portfolio Management Company http://www.dailynewsegypt.com/2017/01/30/613323/ http://www.dailynewsegypt.com/2017/01/30/613323/#respond Mon, 30 Jan 2017 07:00:53 +0000 http://www.dailynewsegypt.com/?p=613323 The low price of the Egyptian pound guarantees the continuation of foreigners’ purchases and the EGX’s vitality, says Khalifa

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Essam Khalifa, the managing director of Al Ahly Fund and Portfolio Management Company, sat down for an interview with Daily News Egypt to discuss the economic situation in 2017 and growth opportunities for various funds. He believes that the increase in the dollar price is credited with the restoration of the foreigners’ investments in the Egyptian Exchange (EGX) and the achievement of huge profits for the investors in the recent period.

Mahmoud Naglah, executive manager of money market and fixed income funds at Al-Ahly Company, also spoke to Daily News Egypt about the expectations of the interest rate and its effect on the economic performance in general, as well as on money market and fixed income funds.

What is your expectation for the Egyptian economy in 2017?

Khalifa: I expect the US dollar shortage crisis to continue affecting the economic situation negatively with the continuation of the weakness of dollar resources. This had resulted from the retreat in the revenues of the Suez Canal, the weakness of Egyptian exports, and limited direct foreign investments. However, we may see the economy recover in the last quarter of this year, backed by the restoration of Russian tourism in Egypt, which will encourage other nationalities to resume their visits to Egypt. I also expect the tourism sector to lead the reform movement.

How do you see the repercussions of the foreign exchange rate issue for the situations in Egypt?

Khalifa: Although the retreat in the Egyptian pound’s price against the dollar has been a disaster for the people and is the main reason for the increase in inflation rates, it is credited with the rise in the EGX. The decrease in companies’ value resulted from a decrease in the Egyptian pound’s price which has made them more attractive for investors. This has manifested in the intensive purchases by foreign investors in the recent period and has played the major role in the rise of the EGX and the increase of trade volumes.

Do you expect the EGX to continue rising in 2017?

Khalifa: As long as the dollar maintains its increases against the Egyptian pound, the EGX will remain attractive for foreign investors and consequently will continue its increases to higher levels, as the foreigners’ purchases now are the strongest pillar in supporting the market’s performance. I expect the market to reach 16,000 points; however, once the dollar’s price retreats against the pound, foreigners will be inclined to sell in order to benefit from the differences in the currencies’ prices, because continuing purchasing shares while their prices are increasing and the prices of these investors’ currencies are decreasing will pose a threat to their profits.

What is your advice to investors?

Khalifa: Selective purchasing is necessary; it should be based on good financial analysis of the strong shares that have good growth chances, such as those companies that have benefited from the flotation, those that have good balances in foreign reserves, and also the companies backed by a large number of land plots under development, or shares of companies which are focused on exporting and consequently do not suffer from the foreign currency shortage crisis, in addition to the shares of industrial companies in general. Also, these shares must be purchased carefully, because we do not know when foreigners will switch to selling, which will lead to decline in the market.

How do you see the funds’ growth opportunities in the current time?

Khalifa: I see that growth opportunities will mainly benefit index funds; that kind of fund attracts foreign investors who prefer to purchase a fund’s certificates that represent the entire Egyptian market instead of following and buying specific shares.

Closed-end funds also have good growth chances, and I call to expand their establishment. Out of experience, Al-Ahly has been successful in managing such funds through the financial sector fund which has shown strong performance. The size of that fund’s investments increased in 10 years from EGP 190m to EGP 450m; moreover, it distributed EGP 556m.

Closed-end funds do not have to face the pressures of certificate refunding, as they are closed, which means that they do not receive any subscriptions or refunds.

What are the reasons behind not having real estate investment funds in Egypt?

Khalifa: Although the regulations have been amended by the Egyptian Financial Supervisory Authority, the economic situation in general is not encouraging to invest in that kind of funds.

What is the expansion plan of Al Ahly during this year?

Khalifa: We are planning to expand in managing portfolios, especially those of institutions. We are also looking into establishing an index fund. As for the other kinds of funds, we may wait for the economic situation to improve first before considering expanding in them.

What are your expectations about the interest rate in 2017?

Naglah: I expect the Central Bank of Egypt to increase the interest rate this year to curb inflation. We are now suffering from the most dangerous kind of inflation, which differs a lot from previous inflations. In normal situations, inflation is a result of an increase in demand; however, this time inflation is driven by supply as that supply is facing a crisis because of the significant increase in prices because of the dollar shortage and the critical economic circumstances. As a result, the price increase is continuing, while the demand on products is retreating.

I also believe that increasing the interest rate will contribute to collecting the liquidity from the market and further reducing demand, which may contribute to solving the inflation crisis.

How do you evaluate the way the government is handling the dollar crisis?

Naglah: The government has managed to decrease imports and consequently support the foreign exchange reserves. Also, it is intensifying its efforts to attract as much direct foreign investments as possible, through which it will compensate the government spending that is expected to decrease this year with the aim of decreasing the budget deficit and meeting the requirements of the International Monetary Fund (IMF). The IMF has demanded strict economic measures, including decreasing the country’s budget deficit.

How did the performance of the money market and fixed income funds managed by the company jump to the forefront?

Naglah: The work strategy of these funds has been completely changed. The money market fund of the National Bank of Egypt has achieved a sharp leap in its performance, thanks to a careful study of the market and the current economic situation. The bank has prepared for the economic hardship by liquefying part of the portfolio, and significantly depending on the trades that have made good revenues for the fund, pushing it to take the first place now with a return of 13.35%, which is a return that has effectively contributed to attracting institutions, as it is exempted from taxes, unlike their investments in the bank deposits that incur a tax burden.

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Naeem targets 30% growth in managed assets portfolios: Saleh http://www.dailynewsegypt.com/2017/01/30/naeem-targets-30-growth-managed-assets-portfolios-saleh/ http://www.dailynewsegypt.com/2017/01/30/naeem-targets-30-growth-managed-assets-portfolios-saleh/#respond Mon, 30 Jan 2017 06:30:17 +0000 http://www.dailynewsegypt.com/?p=613310 Head of Naeem’s financial portfolios reveals expected scenarios in a year of critical economic fluctuations 

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In a year expected to be difficult on all economic levels, Ahmed Saleh, head of financial portfolios at Naeem Holding, told Daily News Egypt about possible economic scenarios in 2017, as well as the possible challenges and opportunities of the year based on the speculations of the foreign exchange rate, interest rate, volume of cash flows, and hoped results during this critical phase of an expected shift.

To what extent will the economy bear more pressures in 2017?

It is clear that the reform decisions will continue throughout 2017 in a way that creates more economic pressure on all sectors. However, it will represent the foundation year for an economic take-off. It is likely for the US dollar price to decline during the second half of the year as an initial sign of economic reforms because it is difficult for conditions to improve with the continuous breakdown of prices, which leads to further recession.

How do you see the future of the US dollar after the liberalisation of the exchange rate?

The dollar changes have become the main indicator of the economic climate in Egypt. It is expected that there will be a balance between the currency’s supply and demand by the end of 2017 with a hope of refreshment of dollar resources and support from the gradual return of tourism, starting with Russian tourism, the increase of natural gas production, and foreign investments flow.

Foreign investments began to flow through the Egyptian Exchange (EGX). What are your expectations for these investments in 2017?

Capital markets are always ahead of economic speculations and events, reflecting a clearer picture of the near future. This emphasises the importance of an optimistic outlook of the rates of foreign investments and economic activities in 2017. The EGX should continue an upward pattern with more investments flow; however, the EGX indices will not achieve the same leap with a 70% increase, but will continue in hopes that a new leap is achieved once the dollar declines against the Egyptian pound. There is room for achieving more capital investments in the EGX as long as economic reforms are continuing down the right path.

What about the way international funds view the EGX? Do foreigners feel like they have achieved enough profits?

Foreign investors are not content with what they have achieved from the EGX profits during the past period. Moreover, there are many investors, portfolios, and foreign funds that have not taken their first step towards Egyptian shares after waiting for the local currency to stabilise. However, they have a positive outlook of the economic situation. The moment the local currency announces its strength, the market will witness higher unprecedented investment inflow.

What economic challenges are more vicious during this phase of shifting?

The exchange rate and the interest rate are the most vicious challenges, as they are considered the spearhead in the war to achieve economic transformation. The exchange rate must create a solid ground for receiving investments. The interest rate cannot continue at these high levels, and it is likely to decline during the second half of 2017. If any increase occurred, it would be very limited and temporary, as the general direction shows that the interest rate will decline. This is necessary for liquidity flowing into the economy instead of banks, and the difficulty of liquidity in financing investments.

How do you face the challenges as one of the most prominent companies at asset management? What are your future plans?

The company has recently completed wide-scale restructuring processes and has obtained many licences. It has also expanded in foreign markets and is currently looking into a number of thoughts and products to be launched in 2017 in a way that suits this current phase. Its fund management also aims to achieve a noticeable growth in 2017, creating one of the largest five revenues on investment funds. The company also aims to increase its managed funds by 30%, which is from EGP 2.5bn to EGP 3.235bn.

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Rasmala Egypt plans to increase size of its AUM to EGP 7.5bn by end of 2017 http://www.dailynewsegypt.com/2017/01/30/613266/ http://www.dailynewsegypt.com/2017/01/30/613266/#respond Mon, 30 Jan 2017 06:00:37 +0000 http://www.dailynewsegypt.com/?p=613266 Interest rates are expected to stabilise during the first half of 2017, and will decline gradually 

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Rasmala Egypt for asset management targets to increase the size of its assets to EGP 7.5bn by the end of 2017, a growth of 15.4% over assets under management (AUM) by the end of 2015. This comes in light of the company’s optimism about the Egyptian market and its ability to attract direct and indirect foreign investment, which motivates the company to focus on attracting financial institutions and different customers.

Ahmed Abou El-Saad, managing director at Rasmala Egypt, told Daily News Egypt in an interview that 2017 will see the results of the government’s economic reform procedures undertaken at the end of 2016. He pointed out that the government is still facing challenges, and it is necessary to deal with the current economic conditions to gradually resolve all problems related to investment.

How do investors see the economic situation in Egypt?

Investors are watching the economic performance of the country, and are putting the Egyptian market under the microscope to ensure the seriousness of the Egyptian government about moving forward with its economic reforms and resisting the people’s pressure, which is caused by the high rates of inflation. The completion of the government’s bold decisions will strengthen the confidence of investors in the Egyptian economy and thus, enhance cash flows generated from direct and indirect investment.

What is the fastest solution to stabilise the foreign exchange price?

Indirect investment is the fastest solution for attracting foreign currency that contributes to the stability of the foreign exchange price, through the foreign investors’ interest in injecting huge investments into treasury bills and bonds. This is in addition to paying attention to the Egyptian Exchange (EGX) by promoting new government initial public offerings (IPOs) which attract an important segment of investors who were unwilling to invest in the Egyptian market for a long time.

Is the EGX still capable of attracting large corporations? 

The EGX has a lot of growth opportunities and is still capable of attracting institutions and new customers, especially as the current market capitalisation did not reach the minimum of the markets, which allow a lot of big investment funds to deal with it. The new IPOs will increase the market capitalisation of the EGX to be a fertile ground for major institutions.

Will 2017 see an inflow of direct investments?

Direct investments are required to revive the Egyptian economy and the increase of cash flow. The size of direct investments are expected to increase by the end of 2017, after being sure that the government will follow through with the economic reform programme compared to the previous year, which saw the depletion of those investments.

How does the Egyptian pound’s flotation impact the performance of investment funds?

The impact of the pound’s flotation decision on funds’ performances varied between equity funds, and money market and fixed income funds. Equity funds celebrated their outstanding performance, while money market and fixed income funds were negatively affected by the decision as a result of the effects of the flotation and increase in interest rates.

The money market and fixed income funds yields declined compared to other alternative opportunities in deposits and savings certificates, so they need some time to restructure investments in order to be able to compete and attract investors.

What are your expectations regarding the interest rates during the current year?

We expect the interest rates to stabilise during the first half of 2017, and to gradually decline during the second half of 2017, in case of the stability of the foreign exchange rate.

How do you evaluate the performance of the company in 2016?

Rasmala Egypt ended 2016 with an outstanding performance after the Arab Banking Corporation (ABC)—of which the equity fund is managed by the company—topped the list of Egyptian funds in terms of performance by achieving a 74.75% growth rate, in addition to its success in attracting new customers and its focus on the financial portfolio which contributed to the increase of AUM by 47.7% over 2016, to register EGP 6.5bn.

What is the company’s plan for 2017?

The company plans to increase the size of AUM to EGP 7.5bn by the end of 2017, which is an increase of 15.4%. The company also targets to attract different customers and to focus on major institutions, in addition to the existence of opportunities for non-traditional investment funds.

Rasmala is managing two funds in Egypt during the current period: the ABC Fund, and Banque Misr’s Exports Development Fund, which is a money market fund.

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Economic reform programme was a necessity, Egypt reached point of no return mid-2016: Abou El Oyoun  http://www.dailynewsegypt.com/2017/01/29/economic-reform-programme-necessity-egypt-reached-point-no-return-mid-2016-abou-el-oyoun/ http://www.dailynewsegypt.com/2017/01/29/economic-reform-programme-necessity-egypt-reached-point-no-return-mid-2016-abou-el-oyoun/#respond Sun, 29 Jan 2017 09:30:46 +0000 http://www.dailynewsegypt.com/?p=613144 It was either reform or the halt of serving loans and an end to economic life

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Mahmoud Aboul Oyoun, the former governor of the Central Bank of Egypt (CBE), professor of economics at Zagazig University, and chairperson of the Egyptian Financial Advisory Group (FA Group), said that Egypt’s economic reform programme was needed, as Egypt had reached the point of no return mid-2016.

“The only options were to reform or to stop serving external and internal loans and put an end to economic life,” he added.

He told Daily News Egypt that keeping the exchange rate unchanged following January 2011, despite the loss of $12bn worth of investments, required justification by the government and CBE officials at the time.

He noted that some people still try to thwart the new system currency exchange system by not dealing with banks and resorting to the unofficial market.

Despite the emphasis on the power of the Egyptian banking system, he predicted that the current year will come with challenges for the banking sector, due to the high cost of deposits and the possibilities of borrowers defaulting.

How do you see the Egyptian economy now and in 2017?

It has been six years since the 25 January Revolution in 2011. Yet, there was no government able to come clean about the economic problems. All measures taken were shallow to meet the demands of certain segments without fixing root problems. This accumulated the problems, causing more issues in production, investment, and financing.

What are the most prominent of those problems?

Many factories stopped production, while the state failed to fix the problems facing local investors. The governments refused to pen clear plans to fix the real problems in the industrial and agricultural sectors.

Hence, private investments moved to real estate and savings were used for speculation in the foreign exchange market. Investors dropped the maintenance of their existing investments, which spiked problems in many services and confined the ability of industries to expand.

At the same time, the state could not even assist in bringing in new investment, amend worn-out legislation, or encourage foreign investments.

Consequently, productive capital eroded, due to depreciation and the lack of maintenance and renewal in factories, infrastructure, and communications.

Moreover, no new jobs were created, even though thousands of youth poured into the labour market every year. This caused unemployment to rise, while the ability to meet local demand depreciated. Egyptians then replaced the local goods they needed by higher-quality imported ones, which stressed the balance of trade in absence of substantial amendments in the exchange market system for about four years.

What about the financing sector?

In the finance sector, the public treasury and government pressured to increase wages, but refrained from modifying the foundations of pricing subsidised commodities in fear of low income citizens—not to protect them as it is said. Meanwhile, the government expanded in financing national projects and financed its spending by borrowing from domestic and external sources.

None of the successive governments had the desire or the ability to control the growth of public spending or to increase public revenues. Therefore, fiscal deficit reached unprecedented levels amid increased issuance of government debt instruments to finance this gap.

Of course this meant that domestic public debt would grow to the size of the GDP. The cost of serving those loans ate a third of public revenues, while external debt ceased to stop hiking.

At the time, Egyptian banks became the main financiers of the budget deficit, as government debt instruments are considered sovereign safe investments with good return, unlike borrowing production and the services sector which are high-risk investments.

What about the external sector?

Keeping the exchange rate unchanged in the first year after January 2011, despite the loss of $12bn worth of investments, requires an explanation by the then government and CBE officials.

This led to the collapse of the state’s foreign exchange reserves. We had to seek foreign aid and deposits from Arab Gulf states with maturity periods of more than a year so they can be included within the CBE’s assets.

Worse, exports did not grow in value and tourism revenues kept on declining. The exchange rate was the only constant put to face all of these circumstances. This led the unofficial market to rise and stole hard cash from official channels.

Many entities refused the measures of the CBE in 2015, related to curbing imports and outlawing the unofficial market.

Banking missions went to Arab countries to beg Egyptian expats to send remittances through official channels, even though everyone knew it was pointless in light of the presence of two exchange rates.

Without the aid of Arab and foreign deposits and loans that appeared in the capital and financial balance, the external situation would have reached a dangerous stage much worse than the current situation.

By mid-2016, Egypt had reached a point of no return, as the only paths available were to either implement reform or stop serving external and internal debt, setting the tombstone of Egyptian economic life.

Was our economy really that bad?

Yes. We, as Egyptians, could not comprehend the proverb “cut your coat according to your cloth”. Our cloth was not enough and demand was bigger than supply.

I stressed back in 2016 that no government will be able to face these structural problems and dare to convince the Egyptian people to swallow the bitter medicine unless it sought the help of the International Monetary Fund (IMF), and so it did.

What is the active ingredient of this medicine?

The bitter medicine is fixing problems that have been accumulating since the financial crisis in 2008, which was when the government claimed Egypt will not be impacted by the crisis. But in fact, we blindfolded ourselves for nine years. We must swallow the medication in doses to open up the arteries of the Egyptian economy, which were once partly clogged.

In the production sector, we have to reach the highest level of self-sufficiency to develop the production of industry and agriculture.

This must be accompanied by a quick and immediate action to deal with government bureaucracy, corruption, and authoritarianism to boost confidence in the private and national sector, rather than intimidating it, to increase investments.

Furthermore, the government must also adopt new controls and rules for establishing companies and granting licences without favouritism or bribes. Litigation procedures and access to credit must be enhanced, while unnecessary interventions of regulatory authorities must be halted. More laws should also be passed to increase local and foreign investments in the framework of incentives linked to development strategies.

It is also necessary to encourage private enterprise owners to merge with the official economy by issuing laws for one-man companies and similar legislations, encourage micro, small-, and medium-sized enterprises, facilitate bankruptcy proceedings, and improve the overall public production not by selling it or its assets, but by helping the sector provide local production that competes with international brands.

In terms of fiscal policy, the recommended actions are even bitterer and less popular as they are linked to different segments of the society, but they must aim to bridge the budget deficit in a specified period.

Therefore, they will be of two parts: public spending and state revenue.

The most important of those measures will be shifting to the cash subsidy system instead of the traditional scheme in the current fiscal year. We should also provide a clear, stable organisation to explain the new system.

The government should also refrain from providing support to those who do not need it across fuel, electricity, and all other commodities. We should know who needs subsidies and who does not. Even better, we should be smart in choosing which commodity to subsidise and when, so it does not reflect on the market’s unsubsidised prices of these commodities and services.

In addition, the state should stop the unaccounted increase in salaries and wages, apply the Civil Service Law efficiently, and channel spending on investment to infrastructure. Also important is the government being an example of austerity to manifest seriousness.

Moreover, the state should also review customs tariffs on luxury goods, activate real estate and value-added taxes, work to quickly issue their bylaws, and speed up deciding on appeals filed from those who were affected by taxes to shorten the cycle of collecting taxes.

We also have to move away from selling the state’s assets, even residential units and lands, to stop speculation on land and real estate prices. The government should rather encourage low-cost investments and sell usufruct rights, which would guarantee the inflow of cash.

Local councils should also be pushed to collect the state’s revenues to maximise tax collection, while protecting the most vulnerable—after excluding those who do not deserve protection—by implementing target-specific mechanisms that are reviewed on an annual basis. Those who deceive the state to obtain undeserved funds should be strictly punished.

As for the external sector, my opinion is to assist the decision of amending the exchange rate system and management of the foreign exchange market. This could rectify the behaviour of economic players and the future of economic changes.

But, in return, we should also face external liabilities with accuracy, whether by paying dues, or obliging to repay foreign debt in a timely manner. The only thing we need in the coming period is the return of tourism.

What do you think about the factors needed by the Egyptian economy to kick off in the coming period?

What we need is the will of government-backed popular belief. This is linked to clarity, candour, and frank confrontation.

The government is not just a fire fighter, but a planner and executive.

The current government has taken the courageous decision to go for reform, but it needs more government coordination, particularly between the ministers of the economic group, through the presence of a person responsible for a set of economic ministers at a CBE governor level. This person must be a supporter of free market economies. There should also be a deputy prime minister for services affairs.

In addition, the government has to announce the reform strategy and the timetable without waiting for the IMF to announce that information. The government should be clear without putting the head of the state in the position of defence.

Local councils must be activated to face violations without fears, unlock quick justice measures, and move towards unity to achieve a unified announced goal, which is improving the living standards of Egyptians.

What are the features of the monetary policy needed by the Egyptian economy?

Inflation rates that have occurred recently as a result of the direct impact of exchange rate adjustments are exaggerated. This is caused by the simulation conducted by service providers and producers in Egypt.

But it is like throwing a stone in a lake; the prices will decline in the coming period, unless the government takes any other measures that push the prices further upwards.

According to Law 88 of 2003, the monetary policy aims to achieve price stability. As long as the CBE does not have a reason to defend the currency exchange rate, the monetary policy will become restrictive.

But, in fairness, I have to say that the success of monetary policy is linked to the government’s success in limiting financing the budget deficit through issuing debt instruments leading to inflationary monetary expansion.

How do you see the Egyptian banking sector?

Since I took the responsibility of the CBE in 2001, my efforts went to strengthen the banking system. This continued with all successive governors.

I can say with confidence that the Egyptian banking system is strong. It has a good level of capital adequacy with low defaulting rates.

However, this year will be challenging for the banking sector. The cost of deposits increased on the back of the interest rate hike. There is also a higher level of potential defaulting in loans, which would impact capital adequacy rates at a number of banks.

I believe that the CBE has recently supported public banks and those it owns through injecting supportive financing to maintain the level of capital adequacy.

I also believe that the experience of Egyptian banks and their leaders boost my confidence that they will overcome the phase of restrictive monetary policies.

Can Egyptian banks well manage the foreign exchange market despite lack of experience?

It is true that Egyptian banks did not manage the Egyptian exchange market alone before, but they have treasury leaders and dealers who are very efficient and knowledgeable.

I believe in the ability of those dealers to coordinate to manage the exchange market as soon as the current wave ends.

What do you mean by the current wave?

It is the stage of overshooting following any flotation.

We saw this before in January 2003 when the government amended the exchange rate. The US dollar price hiked to EGP 7, while banks were selling at EGP 5.2. This is happening again in Egypt and it happens everywhere following flotation.

In my humble opinion, there are many in the market who bet against the success of the new system; hence, they are trying to thwart it by continuing to deal in the unofficial market, saying that banks are not able to meet their needs.

Even if some are allowed to in light of the CBE’s import priorities, the imports of luxury and non-essential goods, as well as foreign tourism, registered over $4bn last year. This should stop by increasing the cost of imports, not by quantitative prevention.

All of this will stop when tourism is back to normal and the gas fields begin producing.

If the government succeeds in implementing the requirements and procedures for the reform in the productive sector through 2017, local production capacities, exports, and foreign direct investment indicators will all improve, which would support the value of the Egyptian pound against foreign currencies.

What message would you like to convey through us?

I am optimistic. I ask everyone to work for the success of our economy and to stop pointless talks and debates of non-experts or those who are sceptical that do not aim for reform.

 

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2016 saw positive legislations for Egyptian media: Yasser Abdel Aziz http://www.dailynewsegypt.com/2017/01/26/2016-saw-positive-legislations-egyptian-media-yasser-abdel-aziz/ http://www.dailynewsegypt.com/2017/01/26/2016-saw-positive-legislations-egyptian-media-yasser-abdel-aziz/#respond Thu, 26 Jan 2017 10:00:33 +0000 http://www.dailynewsegypt.com/?p=612576 Country's economic crisis will lead journalists and media workers to face dismissals or salary reductions

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Yasser Abdel Aziz is a journalist and media analyst who gave several speeches on the importance of media in the world. Daily News Egypt spoke to Abdel Aziz in interview on media performance on 2016. The analyst provided an overview about the Egyptian media’s current situation and its expected developments under the new legislations approved in late 2016, as well as his view regarding them.

How do you evaluate the performance of the Egyptian media throughout the past few years, particularly in 2016? 

First of all, if we come to evaluate the performance of the Egyptian media in the past period, we should view it from four angles and distinguish between positives, negatives, challenges, and fears.

Regarding the positives seen last year, let’s start with the legislative level which introduced a new legal system regulating Egyptian media as stipulated by the Constitution. Two important laws were issued which established new regulations for the press and media institutions: the media institutions law and media syndicate law. These two laws were not available before.

For the first time, these legislations allowed independent authorities to manage the media field in Egypt. Also, for the first time a regulatory body was assigned to administrate the Egyptian media, after the executive body kept regulating it for decades.

Additionally, for the first time since the 1960s, the audio and visual media outlets owned by the state will be managed by independent authorities and not executive bodies. Previously, they had been working under the supervision of the Ministry of Information, which was annulled. The same goes for Egypt’s eight national newspapers managed by Supreme Press Council affiliated to the Shura Council.

Media outlets are currently being supervised by the National Authority for Media, while the press is supervised by the National Authority for Press. Both are independent in accordance to the media institution law.

Moreover, it is also the first time in Egypt’s history for the media to have its own syndicate, as it was the only profession that did not have one. This had meant that there was an absence of the media’s code of conduct, and no means to hold journalists accountable or to discipline them.

The Media Syndicate will officially be established within the first quarter of 2017.

In addition to all that, many new media institutions have been established throughout the year. Their establishment brought hope to media workers and generated new content for readers.

Yasser Abdel Aziz is a journalist and media analyst
Yasser Abdel Aziz is a journalist and media analyst

In terms of issues that arose in the media sphere, the Egyptian media had seen a wave of consolidation, monopolies, and ownership transfer in 2016.

The second issue is the violation of press freedom, and the concept of relating freedom of expression to national security. This caused the arrest of journalists on charges of terrorism suspicion, the issuance of closure warrants for newspapers, pressuring TV anchors, and confiscating printed issues. On the top of that came the unprecedented court sentence against the Press Syndicate leaders.

Thirdly, a remarkable reduction was seen in content quality, as well as the deterioration of the performance of those working in the media. There were a lot of cases of invasion of privacy, as well as the usage of offensive phrases which was frequent throughout the year and was not widely addressed.

Fourthly, until now we do not have a wise media voice to address regional or world media.

Despite all the positives I have mentioned about the new legislations, there are articles that are not concluded yet. Those are significant as they include the work regulations, rights of media workers and journalists, and their freedoms.

Do you think that new legislations will crack down on the field in the upcoming years?

No, I do not. The Constitution bans punishing people for freedom of expression. We are still waiting on the government to annul certain punishments in the penal code for media violations that are unconstitutional. This legislation was recommended by the national committee that prepares media projects through the unified media law.

In addition to that, we still don’t have a law that determines what kind of information in Egypt can be circulated, and what is restricted.

In 2016, several media outlets were owned by businessmen. Do you think this will be a trend in the upcoming period to unify the media agendas?

No, it is normal that private media is owned or led by investors and businessmen. We always say that in every country, there should be both types of general and private media outlets. However, it is preferred that those investors or businessmen be from the same field, but in Egypt there are only economic investors and businessmen.

Following the flotation of the Egyptian pound, Egypt is facing hard economic conditions. Do you think that those would lead to work dismissals or cutting printed issues?

Definitely yes. Media workers and journalists are witnessing the worst period in their professional life, due to reduction in the money allocated for the media industry, and also due to the reduction in economic activities that used to supply media institutions with money. Journalists or media workers will face dismissals or salary reductions due to their institutions’ expenses and the hike in prices. That is also one of the reasons why businessmen ownership for media outlets is needed.

Do you believe that the independent media is leading a campaign against the state with the aim of exaggerating problems?

I don’t have any information about whether there is a political agenda behind any media content or not, but there are rules to the profession that should be applied. However, I did see media ethics and guidelines violated. I suggest controlling media standards, not content.

How do you see the future of media amid the political conditions?

The country is facing terrorism, economic fears, disputes over the Constitution, internal and external pressures, and examining development projects. If all these challenges become resolved, the relation between the state and the media will improve. But if not, the opposite will occur, which we do not wish. It is normal that such disputes occur between the state and the media amid all these challenges.

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Helwan Company for Metallic Appliances aims to double production of household appliances in 2017: chairperson http://www.dailynewsegypt.com/2017/01/26/612545/ http://www.dailynewsegypt.com/2017/01/26/612545/#respond Thu, 26 Jan 2017 09:00:03 +0000 http://www.dailynewsegypt.com/?p=612545 Military production factories do not crowd the private sector, aim to offer high-quality products for low prices to reduce the burden on citizens, says El-Gendy

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Helwan Company for Metallic Appliances (Military Factory 360) seeks to double the size of its production of household appliances during 2017, according to Darwish Mustafa El-Gendy, chairperson of the company.

El-Gendy stressed, in an exclusive interview with Daily News Egypt, that military production companies do not crowd the private sector, but rather aim at offering high-quality products and low prices in order to ease the burdens on citizens.

He revealed that the company produces gas cookers with 100% local components, and aims to apply the same policies on the rest of its products in cooperation with other military production factories and private companies in order to stop importing any production inputs from abroad to ease the pressure on foreign currency.

According to Darwish, the profit margin of the company’s products does not exceed 8%. The company has also taken harsh technical measures in order to avoid being affected by the Egyptian pound’s flotation.

Darwish is a civil engineer, graduated from the faculty on engineering at Cairo University. The start of his work in military production began in a factory to produce and repair armoured vehicles. He received a number of training sessions abroad, after which he returned as the chairperson of Helwan Company.

Photo by Mahmoud Fekry
Photo by Mahmoud Fekry

First, we would like to get introduced to the origin of the company and its activities. 

Helwan Company for Metallic Appliances is one of the companies affiliated to the National Corporation for Military Production. It was established in 1962, and is specialised in engineering industries with about 1,300 employees.

The beginning of military production factories’ establishment was in 1954. This trend was quickly pushed forward by the revolution of July 1952. The phase of the 1950s and 1960s witnessed large nourishment of these factories, whether in the production of military or civilian products.

Military production companies support the industry in general, and military industry in particular, because this is the main aim of their establishment.

What are the company’s products?

Military Factory 360 has two types of activities. The first is related to military products; the second is related to the production and maintenance of durable home appliances, such as gas cookers, gas water heaters, refrigerators, air conditioners, and automatic washing machines.

The gas water heater production line of 10 litres and 5 litres is the oldest production line in the company. These heaters are produced with a licence of a German company with the highest quality standards.

The company also produces cookers of different types, and has begun to produce the three-flame furnace, and still produces it given the demand for it. The company also manufactures the four-flame, five-flame, and six-flame furnaces, besides the flat cooker.

We also manufacture air conditioners that are environmentally friendly with 1.5-, 2.5-, and 3-hp capacity, under the name Archos. They are produced in cooperation with Chinese Galanz Company.

The company also produces Helwan 360 No-frost deep freezers with seven vertical drawers, and Helwan Refrigerator 360 of 16 feet.

The air conditioners, full-automatic washing machines, and refrigerators are in fact the latest lines in the companies, as the air conditioners line was established in 2011 with a production capacity of 40,000 units a year. The washing machines line was established in 2013 with 20,000 machines per year, and the refrigerators line was also established in 2013 with a production capacity of 90,000 units a year.

The refrigerators production line is characterised by being a manufacturing and assembly line at once, in which materials are formed using special devices until the refrigerator reaches its final form. Moreover, there is an inspection room with the latest global technology in the field of refrigerators’ security and testing.

Photo by Mahmoud Fekry
Photo by Mahmoud Fekry

What are the new products aimed to be offered by the company over the upcoming period?

We are currently looking into producing mini-bar fridges and microwaves in 2017. We also aim to produce display refrigerators and water dispensers over the upcoming period.

It is important to note that these new products will be on the same production lines we currently have, without the need to inject new investments.

What is the company’s plan in the new year?

The company aims to double its production by 100% in 2017. These are the orders of the Minister of Military Production. We are doing the best we can to achieve this aim through the optimum utilisation of the capacities we already have without increasing costs.

Does the company depend on domestic or imported components in its production?

The amount of domestic components in the company’s products varies depending on the product. For example, cookers depend 100% on domestic components.

We aim to increase the rate of domestic components in the production of water heaters to 98% by the end of this year. The same thing goes for the rest of our products.

The company had been importing some raw materials to produce water heaters, such as copper-free oxygen, but after the currency crisis, we began to cooperate with sister factories, including 63 military factories to produce these components in order to prevent the need for import.

In terms of deep freezers, the company used to import their components, but now we are targeting that all their components will be 100% locally manufactures by the end of 2017.

The policy of military production companies aims to rely on its own efforts to find alternatives to what is being imported, both in cooperation between sister companies, or in cooperation with private sector companies.

Are military production companies open to deal with the private sector?

Yes, we always welcome cooperation with the private sector, as we serve the same goal which is to promote the national industry. The private sector is a national sector and we must support it.

Instead of importing some of our production components, it is better to get them from the private sector, especially if the products are of high quality and at suitable prices.

Some criticise the army’s involvement in the economy and commodities production that competes with the private sector. How do you respond to that?

We must reaffirm that the aim of the establishment of military production plants is the production of military equipment, but why not work on the production of high quality, efficient, and low-price products to help citizens and reduce the burden of living?

What is the problem of having a hand that builds and supports the national industry?

We do not compete with the private sector at all, but let us agree that the presence of more than one product or company in the market is in favour of the production process and in favour of the consumer.

I believe that the military production companies must increase their production size and quality during the coming period to maintain the balance of the market and goods prices, which is what we are already working on at the moment.

We do not compete with the private sector, but we are integrating to serve our homeland and the citizen at the end. Companies produce by doubling the profit margin; however, the products’ quality cannot be compared to that of military products.

Some people believe that the company’s product prices are not much lower compared to imported or private sector products.

I want to explain that the product pricing policy inside military production companies is one of the most important pillars monitored by the minister of military production himself, because the minister and senior leadership care about easing the burdens on citizens.

I emphasise that the profit margin obtained by the company from its civilian products ranges between 5% and a maximum of 8%, and we are not allowed to get more than that.

Citizens believe in the armed forces and the armed forces work hard to live up to the responsibility. We are always working on reducing the cost of our production to the maximum extent possible, without affecting the quality of the product.

Ironically, the decline in profit margins of the company’s production hinders the expansion of products’ marketing process. The major shopping centres insist on obtaining ratios of up to 20% of the product price or profit margin to display the product, which is not achievable. Our profit margin is very limited; therefore, we rely on our showrooms or our presence within government bodies and syndicates to market our products.

How did the Egyptian pound’s flotation affect the company?

The decision has definitely affected our company—in the end, we are an economic entity managed by self-efforts and we do not obtain any support from any parties. We faced a problem initially in securing foreign currency; however, our prior import agreements on certain production components eased the crisis.

We depend on local production inputs in most of our products, and we are working to reduce spoilage and waste on the production lines, which reduced the impact of the crisis on the size of our production and commodity prices as well.

 

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IS terrorism born out of outlawed Muslim Brotherhood: former Unit 777 chief-of-staff  http://www.dailynewsegypt.com/2017/01/25/612569/ http://www.dailynewsegypt.com/2017/01/25/612569/#respond Wed, 25 Jan 2017 20:30:27 +0000 http://www.dailynewsegypt.com/?p=612569 Recent arms deals are necessary even if they negatively affect the economy, says Hatem Saber

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President Abdel Fattah Al-Sisi recently inaugurated the Red Sea-based southern navy leadership, which consists of a special navy forces brigade. The step was viewed as a measure that would foster military efficiency between the Egyptian Armed Forces and navy based in the Red Sea.

The establishment of the southern navy leadership is considered a “quantum leap” for the Egyptian navy armament and formulation as it grants the army full control of operations carried out in the Red Sea at a time when many threats surround Egypt’s borders, especially from the Islamic State (IS) and its affiliated group “Sinai Province”, which has conducted numerous terrorist operations in North Sinai against the army and on police checkpoints.

The reasons behind the sudden rise in the number of those militants who allege that Islam is the main impetus of their actions remains vague and propagated by variations of analysis. These actions include violent attacks against army, police conscripts, and recently such acts have targeted civilians.

Local and international media outlets have questioned the motivations behind the appearance of such groups, which use killing as a means to achieve what they deem as “Islamic rule” on earth.

Despite the intensive security campaigns carried out by army and police forces inside the tumultuous governorate of North Sinai, the IS-affiliated group “Sinai Province” is still active and is launching attacks against both civilians and security members. The security campaigns have not contributed effectively to decreasing the group’s membership or the recruitment process, which attempts to allure young men from North Sinai and outside the peninsula to join its ranks.

Several local intellectuals and experts echoed that the crisis inside North Sinai will not only reach an end through the dependence on military campaigns and called for the activation of education and health services in the peninsula; moreover, they asked that the needs of youth be met in order to avoid their being attracted to the forces of extremism.

To better understand the situation in North Sinai and the way militant groups think, Daily News Egypt sat down with international terrorism expert and former Unit 777 chief-of-staff Hatem Saber, who was known by the name “Unknown Leader” during the 25 January Revolution.

International terrorism expert and former Unit 777 chief-of-staff Hatem Saber
International terrorism expert and former Unit 777 chief-of-staff Hatem Saber

First of all, can you explain to us the reason behind the title “Unknown Leader”?

The name “Unknown Leader” dates back to the outbreak of the 25 January Revolution when I was serving as a high-ranking officer in Unit 777. At that time, Unit 777 received orders to deploy a number of our members in the streets of Cairo’s suburb of Nasr City following the riots that erupted during the days of the revolution,.

With state of the art weaponry and special forces uniforms that Egyptians had never seen before, Unit 777 stood in the streets of Nasr City in front of bystanders who thought at first glance that we were US forces that had been deployed to Egypt.

When they knew we were Egyptians, they started to take photos from afar, as it is forbidden for members of the unit to appear in photos. These photos of the masked officers, including me as an officer who led the unit, were circulated through social media outlets. One of the photos that was taken of me, in which I appear in a full special forces uniform, including a facemask, was entitled “Unknown Leader”. This was the source of that nickname, which followed me even into retirement.

What are the reasons behind your retirement? 

I retired from military service due to multiple injuries that I had endured through trainings, these injuries resulted in me not being100% fit and this violates the requirements of the Egyptian Armed Forces.

Currently, I’m working as a visiting professor at the Egyptian Military Academy and as an expert in international terrorism movements.

In your opinion, what is the classification of Unit 777 on the international scale?

Frankly speaking, the Egyptian Special Forces Unit 777 does not have a independent classification as it is part of the Egyptian Armed Forces. The international ranking system is being conducted on the armies as a whole, not its special forces.

Unfortunately, several local military experts disseminate false information to the public and exaggerate the ranking of Unit 777. Therefore, I would like to note that any special forces that occupies a place in any international ranking should have precedent in combating international terrorism.

However, we all should agree that the Egyptian special forces maintain a privilege that is not present in any other counterpart forces, which is the physical efficiency of its personnel, unlike other forces that highly depend on technology instead of improving their physical abilities.

Do you think that the recently signed arms deals by the Egyptian government are vital to improving the efficiency of the armed forces?

It is important for Egyptians to be aware that the recent signed army deals are necessary and Egypt was in dire need of them. This is the case even if they will negatively affect the Egyptian economy.

Egypt is surrounded by numerous enemies, who are working actively to destroy the only powerful army inside the Middle East, which is the Egyptian Armed Forces. For those who oppose these deals, I would like to say that if your home is surrounded by thugs you would give priority to having arms for the sake of foiling any invasion instigated by them. This is the situation in Egypt.

Egypt bought the Mistral warship, which only carries helicopters, and not fighter jets. This has made clear that Egypt does not have any plans for invasion, but rather it is only preparing to curb any assault against it. Also, the recently purchased Rafale fighter jets are an important step to achieving the superiority of the Egyptian Air Forces.

Israel, which is the first and only enemy to Egypt, owns the latest-made F35 fighters, which are provided to it by the US. Thus, Egypt should guarantee its fighting efficiency to face any potential assaults.

Let’s move to a different point, which is the Islamic movements and the ongoing terrorism operations across the country. What is your opinion of the Muslim Brotherhood? 

Since the establishment of the outlawed Muslim Brotherhood, its actions have been based on how things were settled during the beginning of Islam.

Under these views propagated by Muslim scholars, any ruler who receives orders from an occupier or applies their special version of Sharia law should not receive atonement. Through these viewpoints, many extremist groups, such as “Sinai Province” are, are carrying out their operations. This also includes previous groups that committed terrorist actions in Egypt during the 1990s, as they consider the current regimes apostates due to the absence of the application of Sharia law.

I consider the Brotherhood the source of all current extremist militant groups.

Regarding the conditions inside North Sinai, what do you believe are the reasons behind the appearance of such militant groups and who finances them?

The appearance of the IS-affiliated group “Sinai Province” in North Sinai is not haply as rumored. This group receives finances from intelligence apparatuses from different countries that seek the destruction of the Egyptian army.

Regarding how to deal with terrorists and their ways of thinking, you will find that the US government has divided these groups’ ways of thinking into six stages. This includes the establishment of small militant groups to carry out limited operations, then the groups grow into larger operations, then the groups unite under one brigade to carry out large-scale operations, after which it will then occupy a space, which will be followed by the declaration of a state.

All of these steps were applied in Iraq and Syria, and all of them took place in North Sinai, except for the last stage, which has been foiled by the Egyptian Armed Forces. The US administration during the era of Barack Obama should be labelled as responsible for these steps and there was an apparent confession from former US secretary of state Hilary Clinton about financing extremist militant groups in Afghanistan.

Do you agree with what is being circulated by some media outlets regarding unfair treatment by security forces and marginalisation as being reasons behind the emergence of such militant group in North Sinai?

The discourse being circulated, whether by local or foreign media outlets, regarding marginalization and the unfair treatment of North Sinai residents is not true and should be labeled as foreign propaganda.

The evidence that this discourse is not true is that residents inside North Sinai are effectively co-operating with army and police during current ongoing operations. To those foreigners who promote this discourse, I say: please have a look at human rights conditions inside European countries and the way Europe treats terrorists following any terrorist attack carried out on European soil.

On that point, I would like to say that western countries have innovated new torture techniques and committed numerous violations against human rights, particularly inside the Guantanamo Bay detention camp.    

Do you think the only way to end the crisis in North Sinai is through military and security operations? 

It will be difficult to settle the situation in North Sinai only through the military confrontation; however, the state is currently only dealing with people who oppose it through violence, and I disagree with those who consider poverty, illiteracy, and illness as central reasons behind extremism and terrorism. This is evidenced through the young man who detonated himself as a suicide bomber at the Coptic church in Cairo in December. He was an educated man who studies at the faculty of science. Not to mention, the founder of Al-Qaeda is Osama Bin Laden, who was a very rich man. The case here is not related to poverty or wealth.

From my point of view, the case is mainly due to an information war and this is apparent in the video releases by IS that are prepared according to the plans of external intelligence apparatuses in order to directly deliver messages through these videos and social media outlets.

Consequently, Egypt must carry out prompt changes in religious discourse and initiate social media campaigns to eradicate religious preachers in Egypt that disseminate a negative discourse of Islam. The basics of the true Islam should be disseminated to combat such ideas, such as focusing on the subtle issues, such as love.

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What will happen to terrorist groups once president-elect Donald Trump assumes power in the US? 

President-elect Trump said it frankly that the US will stop playing the role of world’s police, so the upcoming US policy will depend on lifting the support provided to the militant groups. The suspension of this support will lead to these groups returning to the countries where such groups were established.

Also, the absence of US as the world’s police will push the Gulf countries to consider the UK as an alternative [the UK will thus be the new protector of Gulf countries].

In your opinion, what would Egypt look like if the Brotherhood were still in power?

Inevitably, in the case that former president Mohamed Morsi was still in power, Egypt would play an important role in supporting terrorism and militant groups. Morsi supported this idea, which was supported when he clearly stated that Egyptians and the Egyptian army support the Syrian revolution, which was and is still based out of takfirist groups. He intended to engage the Egyptian army in a conflict with the Syrian army, which is currently facing numerous extremist groups.

Finally, I would like to say that Egypt will remain unified and that current economic decisions are considered a bitter medicine that will lead to the speedy recovery of the Egyptian economy.

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We are optimistic about 2017, we will continue to grow: Xerox Egypt http://www.dailynewsegypt.com/2017/01/23/optimistic-2017-will-continue-grow-xerox-egypt/ http://www.dailynewsegypt.com/2017/01/23/optimistic-2017-will-continue-grow-xerox-egypt/#respond Mon, 23 Jan 2017 06:00:57 +0000 http://www.dailynewsegypt.com/?p=611700 We have over 30% share in the A3 printing and copying market, says Duffelen

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Amid the economic fluctuations in 2016, and the prospects of 2017, Xerox Egypt stands firm in its optimism about what the future holds for its business and the Egyptian economy. Mark Duffelen, vice president and general manager of Xerox Middle East and Africa, believes that Egypt will continue to expand in different sectors, considering it a major hub for Xerox in the entire region.

Duffelen sat down with Daily News Egypt in a joint interview with Haitham Abdou, the general manager of Xerox Egypt, and revealed the company’s strategy for 2017. They both shared their opinions and views about the current state of the economy as well as their expectations for Xerox Egypt throughout the few upcoming months, with a general state of excitement about what the future brings.

Haitham Abdou, the general manager of Xerox Egypt
Haitham Abdou, the general manager of Xerox Egypt

What business strategy will Xerox adopt in 2017?

Duffelen: First of all, it is worth noting that Xerox has been the top company in the sector worldwide in terms of revenues for seven years, for each quarter in a row with a revenue share of around 22%. We have a plan to continue to grow across the world in four key areas.

First, the A4 Multi-function printer, which we are already doing very well with here in Egypt, and marrying this with the managed print services, which we are number one in worldwide, will result in a great leap for growth.

The second area is the production market, which is growing by about 5%, and within that, inkjet printing is growing by about 10%. We have developed a range of inkjet devices to grow the size of the inkjet market, not just to grow our business in inkjet. This was especially true after we acquired IMPIKA company. We were able to take Xerox’s expertise in print outputs and marry that with the engines that IMPIKA has.

The third area is increased market coverage. We are doing a good job covering the market here but we are going to get even better at it. We are changing our distribution model here, and focusing on different product groups rather than a number of distributors. We will engage two major distributors, Raya and Aptech, who can cover two different product groups. We signed a contract with the two companies a couple of weeks ago to become one of our main distribution arms.

The fourth area is our document outsourcing proposition where we rationalise and control costs as well as create mobility and security.

Xerox has recently separated from Conduent Incorporated. In what way does this impact Xerox globally and in Egypt?

Duffelen: While this split had no impact on Xerox Egypt, we consider it very positive for Xerox in general, as it created two market-leading, publicly-traded companies. This allows Xerox to be completely focused on documents, workflow, and making the lives of our customers simpler, eventually enabling better workflows that drive down costs and improve processes. Now, there is a massive focus on Xerox technology. All the investments in Xerox will be directed towards Xerox technology and document outsourcing.

Mark Duffelen, vice president and general manager of Xerox Middle East and Africa
Mark Duffelen, vice president and general manager of Xerox Middle East and Africa

Where does Xerox Egypt stand in the region and on a global level?

Duffelen: With 89 countries in the Middle East and Africa (MEA), Xerox Egypt is the only company directly operated by Xerox, while other Xerox companies in the region are managed by our distributors, so Xerox Egypt certainly stands out and is a strategic hub for the entire region. We always make sure that Xerox Egypt is well-prepared to support anything that happens in the MEA region.

In fact, the regions of Europe and North America are now copying the Xerox Egypt model. The way we operate here is now being replicated across the rest of the Xerox world, which is a testament to how successful we have been here.

Xerox Egypt has the number one market share across virtually most parts of the portfolio. It is the market leader in the digital printing and graphic communications sector. We have almost 74% of the market share with production printers, as well as almost 34% market share in the Egyptian industry for A3 devices for small- and medium-sized businesses. We have acquired the largest share of sales in the third quarter (Q3) of 2016, nearing 31%.

Abdou: Xerox Egypt also accounts for about 90% of the managed printing services in the banking sector; some of these banks include Emirates NBD and the Arab African International Bank (AAIB).

Duffelen: On a more general level, Xerox is leading multifunction printers (MFPs), which we plan to focus on more over the upcoming period, and get multi-function devices to become part of the process rather than an output device.

What is Xerox Egypt’s target growth rate for 2017?

Abdou: Xerox Egypt is targeting a growth rate of 10% in 2017.

What are the sectors that Xerox Egypt is currently present in and plans to expand in?

Abdou: Xerox Egypt is currently investing in new business solutions and applications that help improve productivity and simplify the work process for a number of sectors, focusing mainly on the banking, health, hospitality, telecommunications, and governmental sectors.

How does Xerox Egypt contribute to these sectors?

Abdou: In the banking sector, Xerox provides innovative solutions, which we call “smart paper solutions,” in order to facilitate banking transactions, including deposits, withdrawal, opening bank accounts, and credit card services.

In the health sector, Xerox introduced “radiology” which was a major success. Our solutions and devices can carry out very accurate printing of X-rays on paper rather than the traditional film, cutting down costs for laboratories and hospitals. We have sold over 50 of the machines that offer this in 2016, while the average is usually within the range of 10 to 15. We saw a tremendous growth in this area and we expect more growth in 2017. Xerox has also launched several other services and solutions for the hospitality sector, including the automation of admission processes, including patient files and content management.

In the telecommunications sector, we offer new solutions for securely automating the purchase of telecommunication services.

We have also invested in new Arabic user interface features, which mainly target the sectors that highly depend on the Arabic language in their business, such as the governmental sector and small- and medium-sized enterprises (SMEs).

Are there other sectors you seek to enter in the near future?

Abdou: Yes, in fact, Xerox Egypt is planning to launch 29 new products this year. We also have a new focus on a programme in 2017 in the education sector, whether for universities or schools. We also plan to expand our business in the oil and gas sector, as well as in the manufacturing business through some new solutions. We see a lot of potential for growth in these sectors. We will certainly continue to expand in the governmental sector as well.

How has the flotation of the Egyptian pound affected your business?

Duffelen: There was a growth in the number of units we sold and managed print services contracts, as well as a growth in the business supplies, but we are not immune to the currency flotation of course.

Our revenues in Egyptian pounds increased, but they get reported in US dollars because we are a US corporation. From what the corporation sees as a contribution from Egypt, it is less than it was a year ago. This is inevitable. However, we have a highly experienced team that is incredibly good at managing the issues of currency availability, serving customers, and making sure they are properly looked after. While there may be a financial impact as we go through this, we remain very well positioned, and we believe the storm is only temporary.

What does Xerox offer to its clients to cope with the current economic conditions in Egypt? 

Abdou: “Managed print services” is one of our main offerings, where we convert the upfront capital expenditure of large organisations into an operational cost, and that is perfect for such an economy. This is why we have the 90% market share in the banking sector for example. We manage bank’s printing environment over five-year contracts rather than upfront purchases. That has been very successful for us and has expanded in 2016 even in the turbulent economic environment.

Duffelen: Our proposition is generally designed to help people streamline their processes and reduce cost. Customers work with us because we enhance their proposition whether for their organisations or taking it to the market, so they may be willing to spend more money to find a better output to sell or use within their organisations. And of course, the currency rates here are clearly a challenge, but we are still optimistic.

How do you see the future of the Egyptian economy? 

Abdou: We are generally very optimistic about 2017 and the years after. It is a long journey, but we expect that starting from the second half of 2017, all the government initiatives will start to pay off and we will start to see an upside in the economy; perhaps because of many factors , such as the International Monetary Fund’s (IMF) loan. We will start seeing an increase in inbound tourism, some stability in the dollar rates, and an overall uplift with the new investment law. We are very excited about 2017, especially after being able, as a business, to sustain and grow in 2016. This only leaves us expecting 2017 to be better. We strongly believe the new economic reforms were right decisions that should have been made years ago.

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Egypt’s economy is on the right track; foreign investment of $15bn over next three years: Khorshid  http://www.dailynewsegypt.com/2017/01/21/611425/ http://www.dailynewsegypt.com/2017/01/21/611425/#respond Sat, 21 Jan 2017 15:15:30 +0000 http://www.dailynewsegypt.com/?p=611425 Our investment policies target improving citizens' lives and increasing employment

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Minister of Investment Dalia Khorshid revealed her expectations and vision about the Egyptian economy through 2017 during an interview with Daily News Egypt, stressing that the Egyptian economy is on the right track.

The minister said during the interview that the ministry is pursuing a new investment policy that aims to develop, improve living standards of Egyptians, and create more job opportunities for young people through creating a good business environment for all economic sectors.

How much foreign direct investment (FDI) is expected by the end of fiscal year (FY) 2016/2017, especially after the flotation of the Egyptian pound and the recent reforms?

FDI net inflow in Egypt during the first quarter of the current FY 2016/2017 registered $1.9bn, compared to $1.4bn during the first quarter of FY 2015/2016—an increase ratio of 37.5%. FDI net inflow during  FY 2015/2016 registered $6.8bn compared to $6.4bn during FY 2014/2015 with an annual increase of 7.2%, according to the latest data released by the Central Bank of Egypt (CBE), which emphasises the confidence of investors in the Egyptian market.

We seek to attract $10-15bn over the coming three years through focusing on creating a good investment climate in light of the reform measures and the critical decisions taken during the past period, which serves in attracting FDI.

What is the size of registered investments by the end of the first half of the current FY?

The number of newly established companies according to the General Authority for Investment and Free Zones (GAFI) in the first half (July-December) of FY 2016/2017 is roughly 6,442, with exported capital worth EGP 10.2bn. Also, 1,004 existing companies saw an increase of EGP 20.4bn in their capital during the same period .

Recent economic reforms were necessary, but harsh, and their inflationary consequences were significant. When will we benefit from them? What are the guarantees that you see, coming from the private sector, for implementing the recent economic reforms without adding more burdens on citizens’ shoulders?

The political leadership is keen on creating all conditions and factors that will lead to Egypt’s progress and economic development, as political and security stability is considered an essential base.

The government began to embrace the bold economic reform programme and took many decisions in order to achieve a balance in the Egyptian market. All this was the first step toward creating an appropriate investment climate, which helps us promote and attract more local, Arab, and foreign investments.

We started these procedures by applying a legislative agenda required for the investment climate, as the government recently approved the drafts of the new investment, restructuring and bankruptcy, and one-person company laws, and executive regulations of the movable collateral law. We are currently working in collaboration with the concerned ministries and authorities to complete the capital market law’s amendments, the commercial register law, and the small- and medium-sized enterprises (SMEs) law.

We have a clear investment policy through which to attract direct and indirect investments that target development, affect citizens’ lives positively, and create more job opportunities for Egyptian youth.

The new investment law grants authority over real estate allocation to the state’s agencies. How will you overcome bureaucracy, and have we replaced the investment window with the one-stop shop, or is there a change in the allocation mechanism?

Adopting the new investment law is a new legislative and procedural philosophy that serves the investor and preserves the right of the state. We worked hard on it to motivate investors through a number of advantages and guarantees. In terms of land allocation, we set new pricing standards, added new agencies to price lands to avoid long procedures and overestimation to the land’s value, and to complete the pricing process within 30 days.

The investor will have the right to obtain the necessary real estate for his project’s expansion, regardless of the partners or shareholders’ nationalities or residencies.

In terms of bureaucracy, the new draft law includes many items that aim at simplifying procedures to investors. The law included establishing an investment window in all of GAFI’s branches to deal with investors’ requests.

We also developed an accreditation offices system which issues accreditation certificates to prove the investment project’s eligibility. These certificates are approved by the concerned authority and its representative in the investment window.

If the concerned authority didn’t express a justified objection to the certificate, the request will be considered approved in 10 working days from the submission date. The approval will be issued by the chairperson of the GAFI.

The competent authorities will be responsible for examining investors’ applications submitted to the investment window, and to make sure that the necessary conditions for approval are fulfilled. The decision will be issued in maximum 60 days.

Are there negotiations with international investment communities at the current stage, especially after the pound’s flotation? What are the reactions of international investors towards the pound’s flotation and the recent reforms?

The economic decisions recently taken by the government will contribute to the increase of direct and indirect foreign investment andill generate foreign currencies in the coming period. As reported in the statement of the CBE governor, the Egyptian banking system received roughly $7bn after the flotation and foreign investments the Egyptian Exchange saw an increase during the last period.

As we have seen over the past few days, a number of international reports published by The Economist magazine and the World Bank confirmed that the Egyptian economy is on the right track, and that 2017 will witness more positive effects.

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Government has taken serious steps towards applying real economic reform to achieve sustainable growth: Kabil http://www.dailynewsegypt.com/2017/01/21/government-taken-serious-steps-towards-applying-real-economic-reform-achieve-sustainable-growth-kabil/ http://www.dailynewsegypt.com/2017/01/21/government-taken-serious-steps-towards-applying-real-economic-reform-achieve-sustainable-growth-kabil/#respond Sat, 21 Jan 2017 15:06:20 +0000 http://www.dailynewsegypt.com/?p=611417 Ministry plans to complete the establishment of the first three industrial parks

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Minister of Industry and Trade Tarek Kabil revealed his vision and expectations of the Egyptian economy in 2017, noting that he is optimistic about the performance of the industrial sector, pushed by the recent economic reform measures.

In an interview with Daily News Egypt, Kabil added that his ministry is designing an ambitious strategy to boost Egyptian exports in the coming year.

How do you see the Egyptian economy in 2017?

The government has taken serious steps towards applying real economic reform to achieve sustainable growth, which will positively reflect on creating more jobs and attract direct and indirect investments.

Regarding the trade and industry sectors, I believe that 2017 will reap the fruits of the efforts made during the last year. The ministry plans to complete the establishment of the first three industrial parks which have small industries licenses in Sadat City, Badr City, and South Raswa in Port Said. This year will also witness the opening of a number of specialised industrial clusters, including new tanneries in Rubeiky City, furniture factories in Damietta, and a plastics city in Margham, Alexandria, which will make Egypt an industrial hub on the regional and international levels. The ministry will launch its industrial investments map in 2017, which includes investment opportunities and competitive advantages for each province separately. The ministry will also complete the development and rehabilitation of six industrial zones in Sohag and Qena, in the framework of the development of the industrial zones programme in Upper Egypt funded by the World Bank.

What is the ministry’s strategy for industrial development?

Industrial development is one of the most important parts of the ministry’s strategy, as we aim to increase the contribution of industrial growth to the GDP from 18% to 21% by 2020. This requires industrial growth to reach 8%. The plan aims to increase the contribution of the private sector and small- and medium-sized enterprises (SMEs) to the GDP to 10%. Additionally, the new industrial development plan targets to increase private investment rates from EGP 43bn to nearly EGP 100bn in 2020.

What about the ministry’s plan to increase exports?

The Industrial Development Plan 2020 aims to increase the volume of Egyptian exports and reduce the trade balance gap through annually increasing non-oil exports by 10%, to be raised from $18.6bn in 2015 to more than $30bn by 2020.

Therefore the ministry is implementing a number of programmes for the development of procedures governing export and import legislation, enhancing export competitiveness, developing logistics projects, activating international conventions, and promoting Egyptian exports.

The ministry will soon announce the establishment of a new authority for the development of exports, involving all associated agencies, to implement the ministry’s plan to increase exports. The ministry will work on activating the role of the Export Development Bank of Egypt (EDBE) to carry out its main role of development and promotion of Egyptian exports to various foreign markets. The ministry also seeks to link all ports electronically to facilitate import and export.

Does the ministry plan to enter new international markets, particularly the African markets?

The ministry is adopting an ambitious plan to enter more foreign markets, particularly the African markets, which represents one of the most promising markets for Egyptian products. The ministry is now working on increasing the direct shipping lines with the African countries as well as the establishment of logistics centres in some areas to facilitate marketing Egyptian products in Africa.

The ministry’s plan also targets Eurasian markets, which includes Russia, Belarus, Armenia, and Kazakhstan. The coming period will witness the start of free-trade negotiations between Egypt and the Eurasian Economic Union, which will open a new export window for Egyptian products. In addition, the Egyptian government is working to complete the ratification procedures on the Mercosur agreement between Egypt and the Mercosur bloc, which includes Brazil, Argentina, Uruguay, Venezuela, and Paraguay.

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Egypt needs to establish 100 solar power plants, must begin implementation in 2017: presidential adviser http://www.dailynewsegypt.com/2017/01/21/egypt-needs-establish-100-solar-power-plants-must-begin-implementation-2017-presidential-adviser/ http://www.dailynewsegypt.com/2017/01/21/egypt-needs-establish-100-solar-power-plants-must-begin-implementation-2017-presidential-adviser/#respond Sat, 21 Jan 2017 14:51:14 +0000 http://www.dailynewsegypt.com/?p=611414 Cost of adding renewable capacities to achieve self-sufficiency of electricity until 2050 reaches $1.223bn

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Hany Mahmoud El Nokrashy, energy expert and member of the president’s advisory council, believes that Egypt’s future lies in renewable energy and that this year, the government must begin the implementation of an integrated plan for solar energy projects in order to achieve security and sustainability.

How can we achieve self-sufficiency in electricity?

I have presented a five-year plan to attract foreign investments and establish solar energy plants over the upcoming period. The cost of this plan’s implementation until 2050 is $1.223bn. It will greatly contribute to achieving electricity self-sufficiency.

It is very likely for challenges to face Egypt by 2050, especially that the population will reach 120 million, and their water needs will reach 120 billion cubic metres, while what we have now is only 70 billion.

Can Egypt implement this plan? How many solar energy plants does the country need?

Egypt has all the ingredients for success in order to achieve a leap in the field of solar energy, but it lacks the will to begin implementation. We need to launch 100 solar energy plants with capacities ranging between 20 MW and 50 MW per plant. The cost of establishing the plants are not high and will decline gradually, especially since there is modern technology involved in establishing the plants, which will enable the state to reduce the cost of launching the plants.

Why was not the plan implemented despite your presence within the president’s advisory council?

My mission is only advisory not executive. It is limited to offering consultation to the president, not monitoring the government’s work.

I have presented the integrated plan for the plants to the minister of electricity; however, it was not discussed until now.

Do laws and legislations encourage investing in renewable energy?

Renewable energy supported and encouraged by the law is limited to only two types, which are wind energy and solar photovoltaic energy. Even though we do not deny their existence in Egypt, there are many other types that can also be utilised, such as thermal and water storage solar energy, or the energy resulting from burning agricultural wastes. They all produce electricity on demand and must be supported.

The trend to use thermal storage solar energy, which depends on sunlight being stored to enable the plants to work at night, will help increase production and find new work opportunities for young people.

How does Egypt utilise its renewable energy resources?

The most suitable thing for Egypt is to utilise the energies available on its land, rather than look at other people’s experiences and copy them. Germany does not have much sun heat; hence, they only benefit from its light. We, on the other hand, have sun beams all year long, which require thorough studying by us to benefit from them.

Using thermal energy is necessary for development because of its high revenues and low costs, especially with the challenge of the lack of water and the individuals’ share of it.

What was the scheme you presented to the electricity minister to establish solar power plants?

We must work on local manufacturing of standard solar energy plants with capacities ranging between 20 MW and 50 MW. They must be made in groups, and the best location for them is above the development corridor near the valley. Each group has five plants that are connected through sub networks. They can be self-sufficient in summer.

Thermal storage solar energy plants will help Egypt without importing fuel to produce electricity and there will be no need to establish nuclear power plants, because the former are characterised by the same performance, but are quicker in terms of construction and installation to service lines. They do not produce dangerous wastes, cost less as production units increase, and their components are locally manufactured; hence, they open large opportunities for work and establishing complementary industries.

These plants will not need electric connection to the network which saves costs. Each plant gets established near the demand location, making transmission lines smaller.

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We repatriate Air France’s money in return for bearing foreign exchange gap: country manager http://www.dailynewsegypt.com/2017/01/19/repatriate-air-frances-money-return-bearing-foreign-exchange-gap-regional-director/ http://www.dailynewsegypt.com/2017/01/19/repatriate-air-frances-money-return-bearing-foreign-exchange-gap-regional-director/#respond Thu, 19 Jan 2017 07:00:45 +0000 http://www.dailynewsegypt.com/?p=611107 ‘The company operates its brand new Boeing 787 to Cairo with 6 weekly flights’.

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Air France obtained an approval to repatriate its money in Egyptian banks on condition of bearing the foreign exchange rate gap.
Cees Ursem, country manager for Egypt of Airfrance-KLM, told Daily News Egypt in an interview that the Egyptian pound’s flotation decision benefits the local economy; however, its impact on foreign companies’ returns that transfer their funds abroad is negative.

How do you see the Egyptian pound’s flotation decision? Did it affect the company’s profits?
The pound’s flotation decision by the Egyptian government benefits the local economy as it attracts foreign investment; nevertheless, it negatively impacts foreign companies already operating in Egypt. The decision increased the US dollar exchange price to more than 50%.

Can the company currently repatriate its money?
We finally obtained an approval to repatriate a partial amount from our bank accounts.
The company, nevertheless, welcomed the approval, and considers the approval an important step.

How did the decision impact the company’s money in Egyptian banks? Who will bear the foreign exchange rate gap—the company or banks? 
Air France will bear the foreign exchange rate gap whereas our local sales revenue deposited at the bank are directly impacted by the decline in the Egyptian pound’s value against the US dollar by 50%.

What is the size of Air France’s fleet in the local and international markets?
Air France operates its first brand new Boeing 787 to Egypt. The company’s fleet on the international market comprises of 106 long-haul aircraft and 123 for the medium-haul network.
What are the latest updates introduced by the company to the local market?

 

The world is changing, as are customer expectations. The group continues to invest to offer its customers new products and services which are increasingly adapted to their needs and ways of travelling.

In January 2017, Air France introduced the Boeing 787 in its fleet offering the best of Air France to the customers. This includes the latest Air France cabins—a cocoon in the sky in the business cabin (30 seats), and comfort for all in the new Premium Economy cabin (21 seats) and in Economy (225 seats). There is also a Wi-Fi connection on board adapted to the requirements and habits of customers, and additional comfort and space with the new Premium Economy seats. Windows are approximately 30% larger than on similar aircrafts and a lower cabin altitude and enhanced in-flight humidity levels provide greater travel comfort. This new-generation aircraft has many operational assets, including fuel consumption reduced by about 20% compared to previous-generation aircrafts, an asset that reduces the effects of a new increase in the price of fuel. It also has a significant reduction in CO2  (around 20%) and noise emissions.

How much did it cost the company to update its fleet with the new Boeing 787 model?
Air France does not disclose this figure. The company continuously invests in new aircrafts. It ordered in total 16 Boeing 787. A modern fleet allows the group to offer its passengers enhanced comfort, generate significant fuel savings, and meets its corporate sustainability commitments by reducing greenhouse gas emissions and noise pollution for residents.

How many Egyptian passengers travel with Air France annually? What is the targeted number in the current year?

 

This is confidential information, which we are not allowed to share externally. This is highly competitive information.
Does the company intend to increase its flights to Egypt in the coming period?

 

Operating six frequencies per week, Air France does not plan to increase the number of flights to Egypt. For economic reasons, Air France’s sister company KLM Royal Dutch Airlines has decided to temporarily suspend flights to Cairo effective 8 January 2017 as the devaluation of the Egyptian pound and the decision of the Central Bank of Egypt to impose restrictions on the transfer of foreign currency out of Egypt had a negative impact on KLM’s results.
Air France operates flights on Mondays, Tuesdays, Thursdays, Fridays, Saturdays, and Sundays. The flight leaves Charles de Gaulle airport in Paris at 2:30pm and arrives in Cairo at 8pm, then takes off from Cairo International airport at 1:35am to reach Charles de Gaulle at 5:30am.

 

Does the company plan to fly to various destinations such as Hurghada, Sharm El-Sheikh, Luxor, and Aswan in the coming period?
Air France does not intend to operate to other tourist destinations because they are covered by charter airlines, which means there is currently no need to fly to them on a regular basis.

What is the size of the company’s investments in the Egyptian market?
Air France’s investments in the local market are high, especially after the recent updates of the fleet.

How many offices does the company operate in the local market?
Air France has three offices in the local market at Cairo Festival City, Cairo International airport, and Alexandria. We are not planning to open new offices.

What is the rate of online booking in comparison to total reservations?
The rate of online reservations increases in parallel with the number of internet visitors.

In how many countries does the company operate and does the company target other markets?

Air France-KLM is the leading group in terms of intercontinental traffic on departure from Europe. It operates up to 2,200 daily flights enabling its customers to travel to 320 destinations in 114 countries.
The group’s fast-developing low-cost leisure activity is operated by Transavia in France and the Netherlands with destinations in Europe and the Mediterranean.
Air France-KLM operates with its partners Delta and Alitalia, the largest trans-Atlantic joint-venture with 270 daily flights. Moreover, Air France-KLM is member of the SkyTeam alliance which groups together 20 airlines, offering access to a global network of more than 16,270 daily flights to 1,057 destinations in 179 countries.

 

 

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Lenovo aims to double share in Egyptian market in 2017 http://www.dailynewsegypt.com/2017/01/18/610816/ http://www.dailynewsegypt.com/2017/01/18/610816/#respond Wed, 18 Jan 2017 06:00:58 +0000 http://www.dailynewsegypt.com/?p=610816 30% decline in the number of sold mobiles during 2016, says Salem

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Lenovo Egypt aims to double its market share in the local market to reach 14% in 2017.

In an interview with Daily News Egypt, smartphones sales manager at Lenovo Egypt Sherif Salem said that the mobile phone market saw a decline in the number of sold units by 30% during 2016. However, the company was able to maintain its market share and achieve growth rates in December.

What do you think of the Egyptian market’s growth in current economic conditions, especially withsome research centres expecting that the number of units sold in the Egyptian market will decrease?

According to research centres, sales of mobile phones in the Egyptian market remarkably declined by 30% in 2016 because of the instability of the US dollar price and the non-availability of some phone models.

However, Lenovo was able to avoid the decline experienced by the market and was able to maintain its market share of the number of sold products. The company also increased its market share in terms of sold phones.

How did you maintain your market share despite the declined market sales?

We have revitalised our sales in more than one way, mainly through incentivising merchants to sell the targeted amount, and through the company’s sales team.

This is in addition to allowing interest-free instalments on two years through Delta Group, a company specialised in the sale of electronic devices.

In order to overcome the economic conditions and the decline in purchasing power experienced by Egyptian consumers who certainly need smartphones, instalments are currently the best solution.

We offered special discounts on Lenovo products through Delta Group’s outlets that include Compume, Mobile Shop, Computer Shop, and RadioShack. We also offered discounts on our products on Carrefour’s anniversary.

We achieved an increase in sales by 30% during December, which confirmed that the market still has many opportunities for growth. We target to achieve growth rates of 10% in the first quarter of 2017, compared to the fourth quarter of 2016.

How do you see the future of the mobile phone market in 2017?

So far, we have a stabilised sales growth of 30%. Many of our newly launched models strongly succeeded in recent weeks, such as K6, which is a positive sign.

The Ministry of Finance announced the stabilisation of the customs US dollar. How do you see the effect of that on the market?

Stabilising the customs US dollar will help stabilising mobile phone prices during the coming period, as many brands modify the price lists of their products on a weekly basis.

The Egyptian market needs smartphones but it suffers from a decline in the purchasing power of consumers. How does your company deal with that?

About 80-85% of our products support 4G services, showing that we have great models in the market.

We are also working to launch new devices at competitive prices, as we will launch smartphones that support 4G services at a price that does not exceed EGP 1,500.

In addition, we are one of the first in modern technology companies, evidenced by our latest products launched under the brand Moto, which we acquired in 2014. The new product is a smartphone equipped with a projector, a power bank, and hands-free equipment that the consumer usually carries next to a usual smartphone. The new phone provides all of these services through a single device.

What is the market share you target in 2017?

Currently, our market share is 7%, and we are targeting to double it this year to reach 14% by late 2017 to occupy third place among competing brands.

What do you think of competition in the Egyptian market, especially with the increasing number of manufacturers?

Competition in general is healthy and beneficial to the consumer. If our products were compared to those of our competitors, ours will win in terms of price and capabilities.

At the global level, we are available in 160 countries and have about 55,000 employees. Our sales amounts to $45bn with 80m mobile phones units sold per year.

In terms of computers, we rank first in sales of computers for the third year in a row.

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United Bank adopts strong expansion plan throughout 2017, despite bank sale discussions  http://www.dailynewsegypt.com/2017/01/15/610232/ http://www.dailynewsegypt.com/2017/01/15/610232/#respond Sun, 15 Jan 2017 06:00:25 +0000 http://www.dailynewsegypt.com/?p=610232 We are serious in providing banking and technical support for SMEs, says Elkady 

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The United Bank aims to implement a strong expansion plan throughout 2017, despite the Central Bank of Egypt’s (CBE) announcement of selling the bank to a strategic investor.

Chairperson and managing director of the bank Ashraf Elkady said that the bank team is working in full swing for its advancement amongst banks working in Egypt, regardless of whether or not it will be sold, adding that only the CBE is in charge of the matter.

Elkady, who was appointed chairperson on 15 March 2016, named four main pillars he will be working on over the coming five years.

According to Elkady, the first pillar is boosting the bank’s market share through geographic expansion and increasing the banking services it offers to clients. The second pillar is supporting the state’s economic plans through activating the CBE’s initiatives, especially the ones concerning small- and medium-sized enterprises (SMEs) and mortgage finance.

He added that the third pillar revolves around developing a comprehensive plan for the development of human resources and employees’ technical and banking skills. The fourth pillar is continuing to count the defaults, which, he said, the team has made progress in.

In an interview with Daily News Egypt, Elkady revealed the bank’s business plan in 2017.

What are the main sectors that the bank will focus on financing during 2017?

On top of these sectors is, of course, the SME sector.

The bank allocated 12% of its overall loans portfolio at the end of 2016 to financing portfolio for SMEs. The bank will increase this percentage to over 20% by the end of 2019. This is because we believe in the importance of SMEs’ role in pushing forward the national economy towards comprehensive development.

The United Bank has signed two contracts with the Social Fund for Development totaling EGP 150m, of which EGP 100m will be directed to existing and new SMEs, and EGP 50m to financing SMEs according to the provisions of Sharia.

Moreover, the bank also signed five other contracts with the fund worth EGP 275m to finance SMEs, in accordance with both traditional schemes and Sharia.

The bank is keen to provide more diverse products to SMEs. We added financial leasing to serve them through one of the bank’s subsidiaries. We obtained a licence to provide this service in 2016 from the Egyptian Financial Supervisory Authority (EFSA).

The United Bank also provides a financing scheme to administrate SMEs, named the “Unified participation compliant with Sharia Law”. This scheme enables project owners to obtain the necessary funding, as well as assistance with administration and management for the success of the project. The bank then exits the project after it has proven successful and sustainable.

The bank is very interested in specialisation when introducing new products. This is done through offering specialized financing schemes, including financing for couriers, distributors, providers, environmental projects, and franchise.

Besides SMEs financing, the bank is currently giving direct and indirect financing to companies, associations, and bodies that finance a number of micro enterprises, to boost their social contribution in this important phase of building the country.

In addition, the bank has, in 2016, signed contracts and cooperation protocols, such as a cooperation protocol with the General Authority for the Suez Canal Economic Zone.

This protocol aims to provide financing products, smart technological solutions, and technical and consulting services to existing and prospective investors that will invest in this zone. This comes besides contributing in financing major projects, maritime, and ports projects, as well as providing credit facilities to investors and review feasibility studies for the projects there.

What about the expansion plan?

The expansion plan aims to acquire a larger share of the Egyptian market according to a thoroughly prepared timetable.

The United Bank has in 2016 opened branches in New Cairo and Alexandria Port, as well as a banking unit at Cairo International airport, boosting the number of branches to 51.

The branches expansion plan targets opening five new branches in 2017 in Suez, Port Said, Sheikh Zayed, 10th of Ramadan City, and East Port Said, to provide the best advanced banking service to customers in accordance with the standards of international banking quality, and also to support the state’s plans in the overall development of governorates towards financial inclusion.

What is the bank’s plan regarding modern technological services?

Rapid technological developments forced banks to cope through the reliance on the concept of digital banking. The United Bank was a pioneer in providing internet banking a few years ago.

The bank is also one of the first Egyptian banks that fully committed themselves to the rules of providing electronic services issued by the CBE in November 2014. The bank became one of the very few banks in Egypt to obtain the CBE’s approval to provide 24/7 electronic services, including call centres and internet banking.

Such services strengthen customer confidence and work for their comfort, saving them time and effort, as well as reducing the cost of hosting clients at the bank’s branches.

The bank also began offering cash management services in 2016, which enabled corporates, SMEs, and individuals to best benefit from their account balances to easily and automatically obtain the best interest rates without having to move to different branches.

This is done by investing those funds in investment or savings vessels in Egyptian pounds or foreign currency. These vessels are managed electronically under constant mandate by these companies to the bank to run and manage these vessels through distinct and easy digital solutions.

The bank is also preparing to introduce a number of electronic sophisticated services, which will be attractive to new clients.

What is the bank’s plan to attract new deposits?

To accomplish this, the bank has recently increased the return on its investments and savings vessels in Egyptian pounds and foreign currencies, especially US dollars. This would meet the demands of many clients, including corporates and individuals, who want safe vessels that offer a good return.

What about mortgage financing?

The bank relaunched new distinct programmes for mortgage financing that suit all segments of society, especially low- and middle-income classes.

This activates the CBE’s initiative of mortgage financing to these classes. The bank also signed an agreement with the Mortgage Finance Fund to finance a number of residential units in Suez.

The bank is considering a new programme within the framework of that initiative, under the rent-to-own scheme and with accordance to the provisions of Sharia or traditional banking schemes. This programme aims to overcome the length of registering units and high costs of funding.

In this system, the units are owned by the bank until the last instalment. This means that registration is only done by the end of the term, which bypasses the complicated procedures and reduces the cost of funding.

What about your role in social responsibility?

The United Bank has signed a cooperation protocol with the Egyptian Corporate Responsibility Center (ECRC) of the Industrial Modernisation Centre (IMC), as well as the United Nations Development Program (UNDP) in 2016. This protocol aims to pen regulatory controls to the sustainable development programme in the applications and practices of sustainable social community development.

The “ETHAR” programme for social responsibility has programmes focusing on the sectors of health, education, and community development.

This interest comes to push us to offer innovative programmes and solutions to social responsibility from our deep belief to plant humanitarian grounds for the economy. The role of economic institutions should not be confined to numbers, but rather go beyond to the social dimension.

The bank also participated in the initiative of the Federation of Egyptian Banks to eliminate slums, and the campaign to eradicate the Hepatitis C, which threatens the health of Egyptians, in cooperation with the Tahya Masr Fund. The United Bank, through this initiative, became the first economic institution in Egypt to be free of this virus.

There was also another aspect of cooperation with the Tahya Masr Fund through opening an account for the fund at the bank to make it easier for those who love Egypt to fulfill their national duty. The bank also took part in the Tahya Masr City (Al-Asmarat) which was built to give homes to those who lived in Al-Dweika. In addition, the bank has offered financial support to Zewail University of Science and Technology to support scientific research in Egypt.

A team of the bank’s employees has also led a campaign called “The Month of Good” in cooperation with the Ministry of Social Solidarity and the Egyptian Food Bank to feed 842 Egyptian families in South Sinai and Behnsa village in Upper Egypt.

Furthermore, the bank launched an initiative to promote financial literacy and raise awareness regarding creditworthiness of individuals and SMEs, in collaboration with the Egyptian Credit Bureau (i-Score), next to publishing a series of awareness articles on Islamic economies in daily Egyptian newspapers. This all aims to spread awareness regarding financial transactions that are compliant with Sharia, which the bank provides under the name “Rakhaa”.

In 2016, the bank received an award from a leading banking magazine as the best bank to provide innovative banking services that comply with the provisions of Sharia.

 

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Vezeeta seeks expansion in Arab Gulf, Jordan, Lebanon in 2017 http://www.dailynewsegypt.com/2017/01/11/vezeeta-seeks-expansion-arab-gulf-jordan-lebanon-2017/ http://www.dailynewsegypt.com/2017/01/11/vezeeta-seeks-expansion-arab-gulf-jordan-lebanon-2017/#respond Wed, 11 Jan 2017 06:00:36 +0000 http://www.dailynewsegypt.com/?p=609592 The company seeks to increase bookings to 100,000 per month by the end of 2017

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Vezeeta, a healthcare platform which provides automated physician, clinic, and hospital bookings, plans to expand its services in the Arab Gulf, Jordan, and Lebanon in 2017. According to Amir Barsoum, Vezeeta co-founder and CEO, the company obtained funding worth $5m last November for future expansion.

How do you see Vezeeta’s level of service in the Egyptian market during the last period?

There is a good demand for Vezeeta’s services with an accelerated growth rate during the past period. Vezeeta currently provides 25,000-30,000 physician bookings per month. Our platform also provides clinic bookings at 3,000 clinics, of which 2,500 physicians are permanently active in Cairo and Alexandria.

What are the targeted local expansions for Vezeeta in the coming period?

We aim to increase online bookings in Egypt to 100,000 bookings by the end of 2017. We also plan to expand our services in the Delta and Upper Egypt. We have already started providing our services in Mansoura.

Will you launch new services in the Egyptian market?

Vezeeta will launch a home-visit service, as well as the evaluation of hospitals, physicians, and prices of surgeries. The new service would allow patients to know the prices of operations and the evaluation of hospitals to facilitate choosing the appropriate hospital. The evaluation would be based on the patients who undergo surgeries.

What are your plans for regional expansion in the coming period?

We are currently working to open a new branch in Dubai. This branch would work as a hub for providing our services in the Gulf region. We also aim to expand in Jordan and Lebanon.

The government has a plan to automate government services, especially in healthcare. Are you cooperating with the government in that manner? 

So far, we have not discussed ways to cooperate with the government on information technology solutions. However, we are planning to start negotiations with the government over cooperation in the health sector during the current year, especially as healthcare is a slow sector in using information technology.

We believe that Vezeeta can cooperate with the public sector in providing healthcare services through a new service to be launched soon, but I cannot reveal it now. This new service is expected to be launched during the second half of 2017.

What is the main legislation required for the sector?

We need the Freedom of Information Act (FOIA) to be passed, because it will positively affect our services growth.

What are your plans for attracting investments in the coming period?

We were able to attract investments worth $5m, led by Emirati BECO Capital with the participation of Swedish company Vostok New Ventures, Egyptian Technology Development Fund, and Jordanian Silicon Badia, and we will use it to finance our expansion plans in the coming period and to launch new products. Therefore, we do not need new investments at the moment.

What are the current growth rates achieved by the company?

We currently achieved accelerated growth rates of 500%.

What do you think about the entrepreneurship and start-up ecosystem?

Egypt and the Arab region started two entrepreneurship models; the first one was imitating the ideas applied in the United States then presenting them in a convenient form to the local market and the Arab region. The other model is about finding innovative ideas to solve our own domestic problems. This second model is based on creativity as most of those thoughts turned out to be unprecedented companies in the global market, and therefore managed to spread in the market, such as Fawry.

The latter model is the better one, because it offers creative solutions to problems experienced by many Egyptians. I noticed in RiseUp Summit 2016 that many young Egyptians are founders of start-ups and they began focusing on creating solutions to problems facing the Egyptian community, which helps emerging companies spread and provide services that drive economic growth.

What do you think is the impact of the current economic milieu on start-ups?

When the economy is in a good state, it supports the growth of companies in general, and vice versa. However, big emerging companies on the global scale achieved great growth rates during periods of economic growth as the customer demand increases. In light of the economic reforms that are currently carried out by the Egyptian state, we expect the market to witness growth opportunities in the coming years.

In time of crisis, young people start exploring entrepreneurship and that is a good thing. When the base of emerging companies expands, the number of successful companies increases.

What does the entrepreneurship ecosystem need?

The ecosystem needs to be completed, which will happen when more successful stories like Fawry emerge.

What are the main challenges the company is facing in the Egyptian market?

The market is suffering from the lack of efficiency, despite having large numbers of young people. Many of the young, competent, and qualified people are attracted to foreign markets, leaving Egypt and causing a brain drain.

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