Wednesday,18 July, 2018
Current issue | Issue 1122, 15 - 21 November 2012
Wednesday,18 July, 2018
Issue 1122, 15 - 21 November 2012

Ahram Weekly


Al-Ahram Weekly

MoU with the IMF
THE EGYPTIAN government expects to sign a memorandum of understanding (MoU) with the International Monetary Fund (IMF) for a $4.5 billion loan before the fund’s delegation leaves Cairo, according to Finance Minister Momtaz Al-Said, speaking Tuesday.
The Egyptian side initially asked for $4.8 billion, but Al-Said said last week that this amount would be reduced to match Egypt’s ownership share in the IMF.
The Cabinet was supposed to present the delegation with an array of measures that shows its seriousness about economic reform as a prerequisite to the loan. The main features of the plan are eliminating subsidies for 95-octane gasoline, raising sales taxes, imposing a progressive tax and taxing IPOs on the stock exchange.

95-octanesubsidy slashed
AS PART of a package of energy subsidy reforms, the subsidy on 95-octane gasoline is supposed to be lifted today, the gas to be sold now at LE5.75 per litre.
Speaking before the Shura Council, parliament’s upper house, earlier this week, Al-Said said the government would later work on delivering subsidised canisters of butane gas to the poorest citizens as a part of the reform plan.
Reuters recently said that Egypt could save LE35 billion a year with planned energy subsidy reforms.
The government aims at cutting gasoline subsidies by LE8 billion to reach LE13 billion.

Inflation heats up via gas prices
THE ANNUAL inflation rate increased to 6.7 per cent in the 12 months to October 2012 compared to 6.2 per cent in 12 months to September 2012, mainly driven by increases in natural gas and butane canister prices.
According to the Central Authority for Public Mobilisation and Statistics (CAPMAS), the increase in this item alone reached 57.8 per cent in October 2012 over September of the same year and is 175 per cent higher compared to October 2011.
Vegetables saw the second largest increase in price, growing at 18.5 per cent in the 12 months to October 2012.
Meanwhile, the monthly urban inflation rate reached 0.8 per cent in October 2012, compared to 1.2 per cent in September 2012.
The rate is expected to witness further increases due to recovery in domestic demand and the effect of planned reforms in taxes and subsidies.
Egypt’s inflation rate had eased to levels below seven per cent during the third quarter of 2012 due to lower prices compared to the same quarter of the previous year.

Egypt retrieves looted $1.8 billion
EGYPT has recovered what mounts to $1.8 billion in funds and lands that were illegally obtained by corrupt figures in the Mubarak regime, according to the state-run daily newspaper Al-Ahram.
Moreover, the government is now trying to recover another $9 billion from former senior officials that are currently facing charges of corruption.
The regained funds are expected to be deposited in the Central Bank account number 333/333, which President Mohamed Morsi launched largely for this reason.

Lower rating for public banks
MOODY’S lowered the standalone credit assessments of the National Bank of Egypt, Banque Misr, and Banque du Caire to B3 from B2 and confirmed their long-term local currency deposit ratings at B2, with a negative outlook.
Moody’s explained that the downgrades are due to the banks’ high exposures to B2-rated Egyptian government securities and the “weak capital buffers of government-owned banks in the context of the challenging domestic operating environment.”

Telecom Egypt taps mobile market
TELECOM Egypt, the local fixed line monopoly, is in a very mature stage in its discussions with the Egyptian government to get a universal licence that would enable it to launch a mobile service, Mohamed Al-Nawai, CEO of the company, told Reuters.
Al-Nawai added that once the company acquires the licence, it would offer a virtual service based on existing mobile networks, and that investing in the company’s own network would be considered by 2014.

Sawiris interested in Telecom Italia
THE TELECOMMUNICATIONS tycoon Naguib Sawiris has offered to buy a stake in Telecom Italia, Italy’s largest telecoms company.
Some sources put the value of the bid at five billion Euros ($6.4 billion), an assessment that Sawiris said is both “inaccurate and excessive”. Such a sum would secure Sawiris a 25 per cent stake in the company.
Telecom Italia did not say how much Sawiris was prepared to invest, but said the offer would concern new shares, meaning he would buy into a capital increase.
This is not Sawiris’s debut to the Italian market as he bought the Italian mobile operator Wind, which he later sold to Russia’s VimpleCom as a part of a deal that also saw Sawiris abandoning his Egyptian company Orascom Telecom.
Telecom Italia shoulders a net debt of 29.5 billion Euros due to Italy’s recession. Lazard is advising Sawiris regarding Telecom Italia. The bid is valid until the end of the year.

OTH gets a new name
SHAREHOLDERS of Orascom Telecom Holding (OTH) decided in their meeting last week to change its name to Global Telecom Holding. Orascom is linked to companies owned by the Sawiris family, which used to own the majority of OTH before the Russian Vimplecom took control of the company last year.
Shareholders also approved a two-year mutual service agreement with VimpleCom under which the companies would provide each other with technical and commercial services to improve the efficiency of their businesses.
Changing the non-voting shares OTH has in Canada’s Global Live to voting shares was another decision taken at the meeting.

Four new factories in Beni Sweif
Prime Minister Hisham Kandil inaugurated four factories in Beni Sweif governorate, one of the impoverished Upper Egypt governorates.
The factories are: Upper Egypt for Food Products, Panorama for Food Industries, Al-Nasr for Agricultural Products and Al-Zahraa for Metal Industries; together an overall investment of LE262 million, providing 600 job opportunities.
While inaugurating the new projects in Ben Sweif, Kandil announced the establishment of 180 new factories in Egypt during the past three months with total investment of LE8 billion and providing 30,000 job opportunities.

UAB’s annual meeting in Beirut
THE ROLE of political and social stability in achieving sustainable economic development will be the focus of the annual Union of Arab Banks (UAB) conference to be held in Beirut for two days starting tomorrow.
According to Wissam Fattouh, UAB secretary-general, the conference will focus on developing recommendations and measures for achieving desired stability in post-revolution economies.

Back to basics
THE GOVERNMENT finally came up with its economic plan this week. The 12-year plan which focuses on the social aspects is divided into three phases which extends until 2022.
The plan, according to a Cabinet statement, aims at creating an equilibrium between guarding the social well-being and realising economic growth.
The government forecasts a growth rate of 3.5 per cent next year and 4.5 per cent in 2013/14 hoping to reach seven per cent in 2022.
The plan places an optimistic target of creating 800,000 jobs by the end of the current fiscal year through the attraction of domestic and foreign investment worth LE167 billion. The government will contribute around 60 per cent of that sum.
In an attempt to lend greater focus to the social aspect, the government plans to direct between LE8-10 billion from savings made through fiscal reform, towards greater social spending on education and health.
The government reiterated its intention to boldly deal with the subsidies system while protecting the most vulnerable. It stressed its intention to lift subsidies on Octane-95. And it said it would only subsidise limited amounts of gasoline and diesel and that the distribution of these fuel products would take place through a smart card system which will be ready within six months.

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