 |
Al-Ahram Weekly On-line 21 - 27 September 2000 Issue No. 500 
|
||
Published in Cairo by AL-AHRAM established in 1875 |
|
||
|
Al-Ahram Weekly On-line 21 - 27 September 2000 Issue No. 500
|
||
| Published in Cairo by AL-AHRAM established in 1875 |
|
||
Egypt Elections Development Region International Economy Opinion Culture Features Special Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Private sector in the limelight
By Sherine Abdel-RazekAt the Euromoney conference held in Cairo last week for the fifth consecutive year, Egyptian officials spared no effort to assure the public that the economy is strong and to announce plans for the upcoming period.
Several ministers affirmed the government's plans to accelerate the privatisation programme. They said that in the near future, joint venture banks and companies will be sold along with a 20 per cent stake in Egypt Telecom. Parallel to offering these assets for sale, the stock market will undergo comprehensive financial restructuring. Also in store for the bourse is a state-of-the-art trading floor scheduled to be completed by the end of this year.
The government's plans also include amending the legal framework for doing business in Egypt. A new law for mortgages is in the works and discussions for amending the codes for taxes and settlement of commercial disputes will be undertaken, said a number of ministers.
Sounding a familiar note, cabinet members said the Egyptian pound is strong, adding that the monetary market will be further stabilised in the coming period. This was part of a concerted attempt by various ministers and state officials to paint a rosy picture of the economy in spite of a recent downward slump.
However, amidst this positive outlook, Minister of Finance Medhat Hassanein sounded a discordant note, saying that he is dissatisfied with the management of the local debt. Though the magnitude of the debt is not a cause for worry -- at LE147 billion, it is less than 50 per cent of the GDP -- he expressed reservations about the fact that most of this is owed to the National Investment Bank.
Credit from this bank, Hassanein said, does not come cheap. The National Investment Bank finances loans through moneys from pension funds, post office savings and National Bank of Egypt investment certificates, all of which have interest rates averaging 11.5 per cent. This rate, Hassanein explained, is considerably higher than that offered on loans by local banks, thereby adding unnecessarily to the size of the state's debt, given the availability of less expensive credit.
To deal with this situation, the Ministry of Finance recently established a debt management unit "to ensure that the government's financing needs and its payment obligations are met at the lowest possible cost and at a prudent degree of risk over the long run," said Hassanein.
For attendees of previous Euromoney conferences held in Egypt, most of the announcements made by the government were little more than a reiteration of unfulfilled promises made at least twice in recent years. Nonetheless, some participants had hoped that the government would announce the specific dates upon which it intends to offer for sale the stake in Egypt Telecom and specific joint venture companies or banks.
Within this context the private sector gave the impression of being more active and practical, using its workshops to promote investments and make deals. Amongst the highlights of activities announced by the private sector are e-commerce initiatives and finance projects.
Ambitious plans were announced for developing the biggest Arabic-language network on the Web. Announcing his company's initiative, Emad Eddin Adib, chairman of the media and Internet company Good News Network Services, emphasised the need for such a project given that out of the 2.6 million sites on the Web only 1,800 are in Arabic.
In the world of finance, Hassan Abdu, head of Horus Private Equity, suggested the Egyptian economy would benefit from more companies like his, of which there are currently only three or four. Engaged in providing finance and development assistance to start-ups or loss-making companies, private equity companies can, according to Abdu, be just what these entities need to be able to stand alone. Abdu cited Edar.com, an Egyptian on-line real estate agency, as one of his company's success stories.
Another notable development in the financial sector included the announcement of the establishment of a US$12 million financial group which will specialise in restructuring companies and providing financial consultation. Called MIBC Corporate Finance, this entity is a joint venture between Concord Investment, Misr International Bank and the British investment band, ING Barings.
Perhaps one of the largest projects announced at the conference was the Cairo Financial Centre which will be established by businessman Mohamed Nosseir, best-known as chairman of Misrfone, the operator of the mobile telephone network Click. This centre will include a trading floor for the stock exchange, hotels, offices for brokerage companies and eight cinemas. Total investment in the centre is estimated at LE1.4 billion.
Related stories:
Money talks
