More foreign funding
EGYPT will receive a $75 million loan from Kuwait to fund the first phase of expanding the natural gas network in Cairo and Giza. Minister of International Cooperation Fayza Abul-Naga and Kuwait's Foreign Minister Sheikh Mohamed Al-Sabah Al-Salem signed the agreement on 19 July. The agreement, also signed by the Kuwaiti Fund for Development (KFD) and the Egyptian Natural Gas Company, allows for a loan over 17 years, with an annual interest rate of three per cent and a four-year grace period.
The loan comes under an umbrella agreement between Egypt and KFD for the years 2007-2014, which includes providing funds for projects in the sectors of electricity, railway, natural gas and poultry. The agreement brings to 31 the number of loans given by KFD to Egypt, totalling $1.64 billion, since cooperation began in 1964.
Egypt has also received about $18 million in grants for technical support from KFD, as a contribution in financing activities of the Strategic Documentary Centre for Economic and Social Reform in Egypt during the period 1984-2004. Moreover, the fund helped finance developing the area surrounding Lake Nasser, the structural reform programme of schools affected by the 1992 earthquake, and building villages destroyed by floods.
On 20 July, Abul Naga met with US Ambassador to Cairo Margaret Scobey and USAID Director in Cairo Hilda Arlano, as part of current negotiations concerning the aid programme in 2009. They also discussed the projects and programmes which are underway within the framework of the economic aid programme to Egypt.
The meeting followed up on projects which were recently implemented through the economic aid programme in different fields, such as health and education. These included building 300 schools in 12 governorates to raise the standard of elementary education, at a cost of $38 million.
Taking stock of the market
LAST week, Minister of Trade and Industry Rachid Mohamed Rachid and Minister of Agriculture and Land Reclamation Amin Abaza held a meeting with producers and exporters of dairy products, meat, poultry and rice to discuss the current state of these sectors, and the impact of the increase in provision prices on their production.
The meeting also aimed at define the required measures to achieve stability in prices and guarantee these products will be available in big quantities during the month of Ramadan, coming in September.
Rachid asked dairy producers to draft a plan on how to promote the sector in the coming period. The local dairy sector, which produces 400 million tonnes annually, has witnessed great improvement in technology leading it to be competitive on the international market. For his part, Abaza asserted that the government is very concerned about improving this vital sector and providing any help to attract investors to establish new projects. According to the minister, record production highs were achieved in this sector thanks to the use of top technology.
Abaza explained that due to an increase in dairy production costs, the government has the right to interfere and set a fair price to achieve balance between high provision prices and the farm's selling price. In accordance with a study presented by producers, it was decided during the meeting to raise the price of milk being sold by farms from LE2.66 to LE3 per kilo. This price should help producers increase production and expand their farms.
As for poultry producers, they presented a study explaining the increase in production during the coming period. Poultry production is projected to rise to 57,000 tonnes this month, compared to 40,000 tonnes during July 2007. According to the plan, this figure will rise to 75,000 tonnes by August, compared to 38,000 tonnes during the same period last year. Total local poultry production, which is considered a cheap source of protein, is estimated at 600,000 tonnes annually. Producers also expect production to continue on the rise until the end of 2008, and chicken farm prices to stabilise between LE9 to LE9.5 per kilogramme.
In response, Rachid asserted that the government will keep custom duties on imported chicken at current levels, on condition that producers do not increase prices. To help cut prices, Rachid issued a decree two weeks ago imposing an extra export fee on provisions, estimated at LE300 per tonne. The aim is to cover local needs and increase production to meet local consumption levels.
Turning to another issue, Rachid explained that the government's decision to ban rice exports a few months ago was due to high international rice prices, which reached $1,400 per tonne. According to him, if the government did not interfere in time, the cost of rice would have reached LE6 per kilo.
Rachid noted that such procedures are temporary, and that the ban can be lifted when the value of rice drops.