Friday,21 September, 2018
Current issue | Issue 1279, (21 - 27 January 2016)
Friday,21 September, 2018
Issue 1279, (21 - 27 January 2016)

Ahram Weekly


Al-Ahram Weekly

Water prices up

New tariffs for water are scheduled to go into effect this month. The new prices are LE0.30 for consumption up to 10 cubic metres per day, an increase of LE0.07; LE0.70, up from LE0.60 for 20 cubic metres per day; LE1.05 for consumption up to 40 cubic metres per day, up from LE1; and LE1.55 for consumption exceeding 40 cubic metres per day, up from LE1.35. Water prices were last increased in July 2015, when they saw a 100 per cent increase.

In addition to the increase, water bills will also now be collected on a monthly basis rather than every two or three months. “Low-income families will not be affected by the increase,” the head of the Holding Company for Water and Wastewater, Mamdouh Raslan, said on television.

He said that the government pays LE1.75 billion on an annual basis to cover the cost of delivering drinking water. He stressed that the Holding Company has a deficit of LE3 billion on its accounts, due to its subsidising drinking water.

The move comes as part of government efforts to reform the country’s finances by gradually removing subsidies on public services. The budget deficit stood at 10.8 per cent of GDP in 2014-2015. The government intends to bring it down to 9.5 per cent in the current fiscal year.

A mixed blessing

The Central Bank of Egypt’s instructions to banks to increase the ceilings of their loans to small- and medium-sized enterprises (SMEs) over the next four years, from five to 10 per cent of their loan portfolios to 20 per cent, is positive for the economy, according to Moody’s, the ratings agency.

In its comments earlier this week, Moody’s also noted that the increased number of SME loans necessary to reach the 20 per cent target will likely weaken loan performance, which will impacts the credit worthiness of Egyptian banks.

According to Moody’s, expanding SME financing will provide more job opportunities. The country’s jobless rate currently stands at 12.8 per cent. SMEs employing fewer than 10 workers make up 97 per cent of Egypt’s businesses, according to CAPMAS, the state-run statistics body. A World Bank Enterprise Survey has recently shown that a lack of access to credit is one of Egyptian business leaders’ chief complaints.

The Central Bank measure should support the country’s economic recovery by reviving investment. Although real GDP growth rose to 4.5 per cent in the second quarter of 2015 from 2.6 per cent in the first quarter, and growth for the fiscal year that ended in June 2015 was 4.2 per cent, second-quarter 2015 growth was primarily supported by a 15.7 per cent fall in imports.

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