Friday,17 August, 2018
Current issue | Issue 1302, (30 June - 13 July 2016)
Friday,17 August, 2018
Issue 1302, (30 June - 13 July 2016)

Ahram Weekly


Al-Ahram Weekly

Eurobond issue and VAT before October 

DESPERATE for revenues, Egypt will issue a $3 billion Eurobond between September and October, and will implement a long-delayed value-added tax (VAT) by September, said Minister of Finance Amr Al-Garhy.

“We are studying a bond issuance of $3 billion on the international market between September and October of this year in order to fill part of the budget’s financing gap, which is expected to reach $10 billion,” Al-Garhy said.

Egypt has been looking for means to finance its ballooning expenses, especially in light of a severe dollar shortage that is hampering production and fuelling inflation.

The bond issue should have been made earlier but the government opted to delay it due to turbulent financial markets and the slowdown in China, which has reduced liquidity for emerging markets. The previous Eurobond offer was in June of last year, the first in five years.

As for the VAT, Al_Garhy said it will be applied in September “should parliament approve it”.

“Once applied, it is expected to bring in revenues during 2016-2017 ranging from LE20 to LE25 billion.”

VAT will replace the current sales tax and broaden the tax base by subjecting all services to the tax. It is feared that the tax will increase inflation, which reached 13.2 per cent in May.

General Electric ups investments in Egypt

THE AMERICAN industrial conglomerate General Electric (GE) is planning to increase its investments in Egypt, focussing more on development projects.

A delegation from the company met President Abdel-Fattah Al-Sisi last week to discuss new investment opportunities. A senior official in the company told the local media that Minister of International Cooperation Sahar Nasr has requested that 25 per cent of production in the company’s projects be domestically sourced to encourage local production.

The company is allocating $ 1.4 billion towards technical training and equipment and is participating in the upgrading of 27 hospitals.

This includes linking six hospitals in remote areas to radiology centres in Cairo. It will also provide hospitals with medical devices.

The company has investments in the field of oil exploration, and electricity production and distribution. GE has participated in developing the combined-cycle power plants in Assiut and west of Damietta, helping to increase the plants’ power generation from 1.5 GW to 2.25 GW. GE generates more than 30 percent of Egypt’s installed power capacity.

During the Egyptian Economic Development Conference (EEDC) in Sharm Al Sheikh, the company said it was investing $200 million in a manufacturing and training facility in Suez City, which GE expects to become part of the economic hub to be built near the Suez Canal.

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