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Compiled by; Yasser Shawky, Embassy of Finland
Monthly Economic and Commercial Bulletin
EGYPT
Provided by:
Embassy of Finland, Cairo
Commercial Section
April 2016
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 2
TABLE OF CONTENTS
Economy ................................................................................................................................................................... 3 EGYPT RAISES FOOD SUBSIDIES BY 20PCT PER CITIZEN IN BID TO COUNTER WEAKENING POUND ............ 3 UAE deposit bolsters Egypt’s cash foreign reserve, central bank ................................................................. 3 CBE URGES BANKS TO COMPLY WITH NEW RESTRICTIONS ON FX DEPOSITS .............................................. 3
Banks, Stocks & Finance............................................................................................................................................ 4 No plans to impose tax on bank deposits, official ......................................................................................... 4 Central bank to receive USD 4bn from China ................................................................................................ 4 Tanmeyah to provide micro financial leasing services .................................................................................. 5 Government to borrow USD 400mn from WB for railroad project .............................................................. 5 Nine banks to cover a letter of guarantee worth EGP 3 bn .......................................................................... 5 Social housing fund to inject EGP 30bn to finance investment budget ........................................................ 6 AAIB to open three branches in Q3 of 2016. ................................................................................................ 6 CBE to secure a 9-digit loan from China ........................................................................................................ 7 Afreximbank plans to raise intra-African trade to $ 250 billion, banker ....................................................... 7 NBE provided EGP 410 in mortgage financings, banker ................................................................................ 8
Investment & Mega Projects..................................................................................................................................... 8 YELLOW CAB TO OPEN STORES IN EGYPT, JORDAN ...................................................................................... 8 AlDahra to inject EGP 2.45bn in Toshka scheme........................................................................................... 9 FEDERATION OF EGYPTIAN INDUSTRIES CALLS ON GOVERNMENT TO INCREASE EXPORT REBATE ALLOCATION TO EGP10 BILLION ................................................................................................................... 9 ERA considers Ain Sukhna projects implementation, senior official ............................................................. 9 GAID to allocate zero-cost land for investors in Upper Egypt ..................................................................... 10 VINCI-LED JOINT VENTURE AWARDED CAIRO METRO LINE 3 CONTRACT .................................................. 10 ISSUANCE OF 500,000 LOW-INCOME HOUSING UNITS TO TRIGGER 30-50% ADDITIONAL MORTGAGE FINANCING DEMANDx ................................................................................................................................ 10
Foreign Trade & International Relations ................................................................................................................. 11 Egypt to receive USD 1bn first tranche of Saudi deposit in May................................................................. 11 Egypt, Bahrain sign 12 MoUs....................................................................................................................... 11 BAHRAIN KING STARTS VISIT TO EGYPT ...................................................................................................... 12 UAE ALLOCATES USD4 BILLION TO EGYPT FOR DEVELOPMENT AND CBE .................................................. 12 Egyptian imports decline by 27% in January and February, Egypt's recorded US$1.891bn in non-oil exports, an increase of 4% .......................................................................................................................... 12 GAFI meets 16 Chinese companies to identify cooperation opportunities ................................................ 13 FRANCE SIGNED DEALS WORTH 2 BILLION EUROS WITH EGYPT ................................................................ 14
Local Trade – Mergers & acquisition ....................................................................................................................... 14 Nissan leads local assembled auto market, AMIC ....................................................................................... 14 Auto sales shrink for the first time in years, AMIC ...................................................................................... 14 Beltone earns EGP 5.3 mn in profit ............................................................................................................. 15 EGYPT'S CIB APPROVES TWO-WEEK EXTENSION FOR BELTONE FINANCIAL'S OFFER FOR CI CAPITAL ....... 15 Mega Investment to merge with Acumen Securities .................................................................................. 15 Acquiring Enjoy by Emirate’s NFPC is nearing completion .......................................................................... 16
ICT .......................................................................................................................................................................... 16 Fewer obstacles in internet sector compared to communications: NTRA .................................................. 16 Internet distributors welcome regional licences on certain conditions ...................................................... 17 4.1% growth in ADSL subscriptions in the last quarter of 2015 .................................................................. 18
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 3
Egypt ranks 15th in internet speed among Arab countries ......................................................................... 19 Egyptian telecommunications sectors posts EGP 1bn growth in Q3 of 2015 ............................................. 20 Egyptian ICT market will achieve growth rate estimated at $8.95bn in 2016, $10.32bn in 2019: IDC Group vice president ................................................................................................................................... 21 Nokia focuses on LTE, development of government services to increase market share: Nokia Market Head for Middle East and Africa ................................................................................................................. 23
Politics .................................................................................................................................................................... 27 PARLIAMENT GRANTS GOVERNMENT ITS VOTE OF CONFIDENCE .............................................................. 27
Energy – Oil & Gas .................................................................................................................................................. 27 Total Egypt invests EGP 20mn in 12 gas stations, senior official ................................................................. 27
Trade Fairs and Events in Egypt 2016 ...................................................................................................................... 27
ECONOMY
EGYPT RAISES FOOD SUBSIDIES BY 20PCT PER CITIZEN IN BID TO COUNTER WEAKENING
POUND
Source: Ahramonline, April 26, 2016
Egypt's economic ministries decided to raise food subsidies by EGP2.4 billion, boosting each citizen's subsidy by 20
percent, the cabinet said in a statement. The new subsidy will take effect starting June, when the holy month of
Ramadan is expected to start, raising consumption of food and, by extension, prices.
Earlier this week, Egypt’s President Abdel-Fattah El-Sisi commissioned the government to increase the supply of
subsidized basic commodities into local markets to compensate low-income earners for food price hikes caused by
the fluctuating US dollar price in recent months.
UAE DEPOSIT BOLSTERS EGYPT’S CASH FOREIGN RESERVE, CENTRAL BANK
Source: AlMal, 23 April 2016
The new $ 2 billion deposit announced by the UAE will significantly support Egypt’s foreign reserve at the central
bank.
Central Bank Deputy Governor Tarek Fayed said yesterday that the bank has not yet received the new deposit and
hopes to get it this week, stressing that deposit receipt details will be announced as soon as arriving from the UAE.
Fayed praised the UAE's role in supporting Egyptian economy, pointing out that the new deposit will also contribute
to strengthening the central bank’s efforts in fighting dollar speculations in the parallel market.
The UAE has announced a $ 4 billion sum to support the Egyptian economy, including a $ 2 billion deposit at the
central bank and another $ 2 billion in investments.
CBE URGES BANKS TO COMPLY WITH NEW RESTRICTIONS ON FX DEPOSITS
Source: Daily News Egypt, April 17, 2016
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 4
The Central Bank (CBE) stressed that banks need to fully comply with all instructions given by the CBE on March 6
and March 8 to regulate foreign exchange deposits. CBE said in a statement that it had monitored some individuals
who made large cash FX deposits, and used them to import non-essential goods and products through companies,
which is not in line with the recently-issued CBE’s restrictions. In March 2016, CBE had cancelled limits on FX
deposit and FX withdrawals for individuals and companies related to the import of basic goods and products. The
bank kept this limit as applicable to companies that import non-essential goods.
BANKS, STOCKS & FINANCE
NO PLANS TO IMPOSE TAX ON BANK DEPOSITS, OFFICIAL
Source: 30 April 2016
Egypt’s tax authority does not consider imposing tax on bank deposits, because it believes the move could hurt
saving rate, given the fact that people deposit their funds in the banks to receive return as a source of income,
according to an official at the tax authority.
Bankers ruled out categorically imposing such a tax on natural persons at the current time because the economic
situation is untenable. Also it would run counter to the banking sector strategy aiming at financial inclusion, and
attracting more clientele.
They said the move is incompatible with what the banks are trying to promote, in terms of exempting saving
vehicles and deposits from taxes to attract a large number of depositors.
Repeatedly, there have been rumors of imposing tax on the returns of bank deposits over the last 5-years since
January 25 Uprising.
The tax authority denied any plan to impose tax on bank deposits return since encouraging saving in the banking
system through tax exemption is one of the principal objectives of the government’s financial policy.
CENTRAL BANK TO RECEIVE USD 4BN FROM CHINA
Source: AlMal, 28 April 2016
The Central Bank of Egypt will sign an agreement to obtain credit facilities worth USD 3bn up to USD 4bn with China
next month, according to sources.
The credit facility offered by China to Egypt is part of several agreements to be signed next month, the sources said,
adding China intends to acquire a large number of firms and running huge investing projects.
Al Mal newspaper reported last week that the central bank is involved in negotiations to obtain a new loan from
China Development Bank as part of negotiations conducted by Egypt to secure foreign currency after decline in
foreign reserve.
During the visit of Chinese president to Cairo in last January, Egypt signed 3 financing deals worth USD 1.8bn with
China’s central bank through CBE, the National Bank of Egypt (NBE) and Banque Misr.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 5
The Governor of CBE Tareq Amer told Al Mal newspaper last February that the Chinese bank transferred USD
900mn to the central bank of Egypt.
The duration of the central bank loan is 11 years, including a grace period of 3 years.
The financial resources will be used to strengthen foreign reserve to meet mounting demand for the US dollar,
according to a banking official.
Egypt sealed a deal with China to obtain two loans totaling USD 800 mn in favor of NBE and Banque Misr, with the
former receiving USD 700
TANMEYAH TO PROVIDE MICRO FINANCIAL LEASING SERVICES
Source: AlMal, 27 April 2016
Tanmeyah Micro Enterprise Services TMES plans is to offer micro financial leasing product to diversify financing
services provided to customers.
Sources told Al Mal newspaper that under microfinance Act, various products may be offered to customers
including micro insurance and micro financial leasing, adding Tanmeyah was considering founding a financial leasing
firm focusing on agricultural mechanization, noting that the company will re-study the project again and update it,
in terms of participants and areas on which it will focus.
In previous statements, Tanmeyah’s chairman Amr Abu Aish said that the microfinance provider considers offering
financial lease services to micro, small and medium-sized projects through establishing a specialized company in
this field.
GOVERNMENT TO BORROW USD 400MN FROM WB FOR RAILROAD PROJECT
Source: AlMal, 26 April 2016
Egypt’s ministry of transport is involved in negotiations with the World Bank (WB) to borrow USD 400mn to finance
train control systems project.
The advisor to the minister of transport for railways sector Wagdy Radwan said that the ministry requested USD
600mn, but the WB approved only USD 400mn, adding there are ongoing negotiations on the loan terms.
WB has allocated financing portfolio amounting to USD 8bn for the coming three years including USD 2bn for
private sector projects and USD 3bn for developmental projects, and USD 3bn to support budget.
Radwan said that the electronic control project would increase safety and security.
It should be recalled that the ministry of transport obtained a loan worth USD 600mn to finance railways electricity
project, and it will obtain a facilitated loan worth USD 600mn from Russia to purchase new railcars.
The ministry is in need of EGP 7bn to upgrade its fleet, according to official statements.
NINE BANKS TO COVER A LETTER OF GUARANTEE WORTH EGP 3 BN
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 6
Source: AlMal, 26 April 2016
Nine lenders have agreed to participate in a letter of guarantee worth EGP 3 bn pounds for operations related to
digging three tunnels under the Suez Canal.
The Commercial International Bank (CIB) is in charge of issuing and promoting the letters in favor of Concord –
Petrojet alliance.
Sources told Al Mal newspaper that the banking institutions that agreed are namely: Banque Misr, Alexbank,
Emirates NBD, the Arab Bank, Egyptian Gulf Bank, Crédit Agricole Bank, Banque du Caire, Housing and Development
Bank, and National Bank of Abu Dhabi.
A letter of guarantee is a type of contract issued by a bank on behalf of a customer who has entered a contract to
purchase goods from a supplier and promises to meet any financial obligations to the supplier in the event of
default.
The letters of guarantee are issued in favor of the military agency, as an assignment body, while the value is owed
by the contractor tasked with implementation, the sources said.
The lenders are obtaining the approvals of their boards for the letters of guarantee, with CIB distributing coverage
shares latter, according to sources.
SOCIAL HOUSING FUND TO INJECT EGP 30BN TO FINANCE INVESTMENT BUDGET
Source: AlMal, 20 April 2016
Investment budget of the next fiscal year 2016/17 includes pumping EGP 30bn by social housing fund, to be
secured through self-financing, as part of target governmental investments worth EGP 107bn, according to minister
of planning Dr. Ashraf Al Araby.
In news statements yesterday, Al Araby said that treasury will pump EGP 64bn to finance the government
investments included in the coming fiscal year’s plan, with an increase of EGP 9bn, compared to the current year as
part of the government’s effort increase investment rate from 14.5% to 16% of GDP in the next year.
Al Mal newspaper uncovered the details of EGP 20bn loan provided by a banking alliance to social housing fund to
finance a scheme to build 400,000 apartment during the coming fiscal year 2016/17.
Al Araby added that the government hopes to achieve a growth rate of 4.5% during the current fiscal year,
compared to 4.2% achieved last year.
Commenting on International Monetary Fund’s (IMF) downgrading economic growth expectation to 3.3%, he said
that a governmental delegation reviewed economic developments during the meetings of the fund last week.
AAIB TO OPEN THREE BRANCHES IN Q3 OF 2016.
Source: AlMal, 21 April 2016
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 7
Arab African International Bank has opened three new branches during the first quarter of this year in Damietta
port, Ismailia and Greater Cairo-based neighborhood.
The bank said in a statement today, that it targets to open more than 15 other branches to expand in Upper Egypt,
Delta, Alexandria and Cairo, as well as making presence in Cairo neighborhoods and new business centers, along
with adding 35 ATMs by the end of this year.
AAIB’s Wealth Management Sector Supervisor Hala al-Fas said that the lender pumps investments in the
construction and establishment of a strong branches network, being the most important points of contact with
customers.
Having been keen on tightening controls and increasing the added value, AAIB is currently implementing a
centralized plan of operations and opening accounts in branches to improve and provide better services to
customers.
CBE TO SECURE A 9-DIGIT LOAN FROM CHINA
Source: AlMal, 18 April 2016
The Central Bank of Egypt (CBE) is involved in negotiations to obtain a new loan from China Development Bank as
part of negotiations conducted by Egypt to secure foreign currency after decline in foreign reserve.
During the visit of Chinese president to Cairo in last January, Egypt signed 3 financing deals worth USD 1.8bn with
China’s central bank through CBE, the National Bank of Egypt (NBE) and Banque Misr.
The Governor of CBE Tareq Amer told Al Mal newspaper last February that the Chinese bank transferred USD
900mn to the central bank of Egypt.
The duration of the central bank loan is 11 years, including a grace period of 3 years.
The financial resources will be used to strengthen foreign reserve to meet mounting demand for the US dollar,
according to a banking official.
Egypt sealed a deal with China to obtain two loans totaling USD 800 mn in favor of NBE and Banque Misr, with the
former receiving USD 700mn and the latter obtaining USD 100mn.
The purpose of the loan is to finance infrastructure projects in different sectors, including energy, agriculture and
telecom.
The sources did not uncover the value of the new loan, on which CBE conducts negotiations.
AFREXIMBANK PLANS TO RAISE INTRA-AFRICAN TRADE TO $ 250 BILLION, BANKER
Source: AlMal, 14 April 2016
The African Export-Import Bank (Afreximbank) plans to support the industrial sector throughout Africa and increase
bilateral trade to $ 250 billion in 2021 instead of $ 170 billion at present.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 8
Afreximbank President Benedict Oramah said that intra-African trade development helps to reduce the continent's
dependence on commodities and raw materials, along with shifting to the expansion in the production of high
value-added products so as to enhance the efficiency of African economies to meet challenges.
Oramah added during the launch of Intra-African Trade Development Strategy Conference, that the strategy is
mainly designed to facilitate communication between exporters and importers in African markets through the
creation of effective mechanisms and the reduction of distribution cost, as well as backing the expansion of
productive sector and creating a stimulating environment that helps raise the flow of basic goods and services on
the continent.
NBE PROVIDED EGP 410 IN MORTGAGE FINANCINGS, BANKER
Source: AlMal, 12 April 2016
The National Bank of Egypt (NBE) has successfully granted loans worth EGP410 mn to customers as part of
mortgage finance initiative launched by the central bank, according to the head of retail bank sector at NBE Hazem
Hegazy.
Hegazy said that his bank provides financing to 3,000 clients monthly, and plans to finance 5,000 customers per
month over the coming period.
He added that the lender is progressing will in the mortgage finance initiative, noting that there have been
increasing demand from low-income brackets, after the amendments made to the initiative.
NBE is currently studying requests of low and middle income customers to provide them with financing, according
tom the banker.
He pointed out that the recent central bank’s meeting with the representatives of mortgage finance at banking
institutions discussed the problems facing lenders as part of the initiative, and the latest developments in the
sector, adding the convention is a monthly meeting attended by all representatives of banks participating in the
initiative, totaling 14.
Currently, the central bank initiative does not need to be amended, and there is an emerging opportunity for all
banks to increase services offered to real estate sector, Hegazy said.
INVESTMENT & MEGA PROJECTS
YELLOW CAB TO OPEN STORES IN EGYPT, JORDAN
Source: ABS-CBN, April 27, 2016
Max's Group Inc. said it would open 10 Yellow Cab stores in Egypt and five others in Jordan in the next five years as
it pursues an aggressive overseas expansion. Operations in the Jordanian capital of Amman will start this year,
followed by Egypt in 2017, the company said. Aside from Max's fried chicken restaurant, the group also operates
casual dining chains Dencio's and Pancake House. It also holds the local franchise for Krispy Kreme donuts.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 9
ALDAHRA TO INJECT EGP 2.45BN IN TOSHKA SCHEME
Source: AlMal, 26 April 2016
Emirates’ AlDahra Co. plans to pump investment worth EGP 2.45bn in Toshka project with the purpose of
reclaiming 70,000 feddans out of a total of 100,000 feddans allocated for the firm.
According to an official, the cost of reclaiming one feddan rose to EGP 35,000 from EGP 30,000 due to increase in
US dollar exchange rate, adding the company’s investments include infrastructure and rehabilitation.
Since being launched under former President Hosny Mubarak, some 65,000 feddans have been reclaimed until
February 2016, according to Egypt’s ministry of irrigation with the government spending EGP 6.5bn on
infrastructure.
The Emirati company focuses on strategic crops including wheat, corn and vegetables, as well as some citrus, the
official said.
AlDahra has started reclaiming 30,000 feddans as part of a total area of 100,000 feddans allocated for it, which
reflects seriousness in completing reclamation of all allocated area, he argued.
Sources told Al Mal newspaper earlier that the Emirati firms wish to boost investments in the domestic market,
especially in energy and agriculture domains.
FEDERATION OF EGYPTIAN INDUSTRIES CALLS ON GOVERNMENT TO INCREASE EXPORT
REBATE ALLOCATION TO EGP10 BILLION
Source: Al Mal, April 24, 2016
The Federation of Egyptian Industries (FEI) has made a request to the government requesting an increase in
provisions allocated to export rebates to EGP10 billion/annum. FEI maintains that an increased rebate would help
support exports; thus, offering support in alleviating the FX crunch that has hit the Egyptian market, the statement
added. The statement also called for setting measures to facilitate the process for exporters including smoothing
out the issuance of Letters of Guarantees and facilitating working capital or production needs.
ERA CONSIDERS AIN SUKHNA PROJECTS IMPLEMENTATION, SENIOR OFFICIAL
Source: AlMal, 24 April 2016
ERA for Urban Development plans to implement coastal projects in Ain Sokhna, which is close to Cairo and the new
administrative capital project, especially with the state’s high interest in the execution of giant ways projects aimed
at serving the city, according to the company’s Board of Directors Vice Chairman Farida Ardash.
Ardash pointed to Al Galala City that brings together Universities, hospitals, schools and various institutions, which
contribute to the city’s high added value.
She added that the coming period would see Ain Sokhna’s shift to “First Home” as a result of these factors,
pointing out that such factors also contribute to the increase of prospects of rental units as permanent residence, in
addition to many other areas which are active only during summer months.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 10
She stated that the North Coast has been experiencing a boom during the next stage, with the implementation of
major roads and services projects, in addition to the execution of new Al Alamein city and its related investments.
GAID TO ALLOCATE ZERO-COST LAND FOR INVESTORS IN UPPER EGYPT
Source: AlMal, 23 April 2016
Head of General Authority for Industrial Development (GAID) Ismail Gaber.
The new land that will be allocated to investors in the industrial zones in Minya, Assiut, Sohag, Qena Aswan, and
New Valley, will be connected with utilities, and will be granted free of charge to the serious investor owning a
project with a high economic feasibility, according to Head of General Authority for Industrial Development (GAID)
Ismail Gaber.
President Abdel Fattah al-Sisi issued a decree that determines certain industrial zones, in which land may be
allocated for investors for free.
For his part, the head of Upper Egypt Investment committee at the Investors' Union Ali Hamza hoped the lands
would be connected with infrastructure utilities in order to achieve high growth rate in industrial development in
Upper Egyptian provinces.
Land allocation for free is an important step; however, most important is addressing the problems faced by
industrial investors in terms of the absence of future vision of industry owing to not having an industrial map, with
which the investor can be guided, said the vice chairman of investors’ union Mahmoud Al Shandawaily.
VINCI-LED JOINT VENTURE AWARDED CAIRO METRO LINE 3 CONTRACT
Source: Rail News, April 22, 2016
VINCI Construction Grands Projects , Bouygues Travaux Publics and Egypt’s Orascom Construction and Arab
Contractors have been awarded a €1.1 billion contract to deliver the third phase of Cairo Metro’s Line 3. Phase 3
of the line includes 17.7 kilometres of new railway, 15 stations – a combination of underground, at-grade and
elevated stations – and the construction of a new rail tunnel beneath the Nile. The project will create 5,000 jobs
and will involve more than 600 French suppliers and subcontractors. The contract was signed on April 17 in the
presence of Egypt’s President Abdel Fattah el-Sisi, and French President François Hollande.
ISSUANCE OF 500,000 LOW-INCOME HOUSING UNITS TO TRIGGER 30-50% ADDITIONAL
MORTGAGE FINANCING DEMANDX
Source: Al Borsa, April 18, 2016
The Housing Ministry announced that it will issue 500,000 low-income housing units at end of current month.
Bankers expect that this new issuance would trigger 30-50% additional demand for mortgage financing in the
upcoming period and the next few years. Some bankers said that while this issuance is expected to have a positive
impact for banks, the large number of units issued and underlying financing needs require assistance and support
from the Central Bank of Egypt (CBE) to manage necessary liquidity. A CBE official stated that the CBE is ready to
expand its financing for phases one and two of the mortgage initiative by EGP10 billion for each phase once the
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 11
initial planned financing of EGP20 billion is fully utilized. Mortgage loans granted by specialized financing companies
picked up 70% Y-o-Y in 2015 to EGP981 million, up from EGP576 million in 2014.
FOREIGN TRADE & INTERNATIONAL RELATIONS
EGYPT TO RECEIVE USD 1BN FIRST TRANCHE OF SAUDI DEPOSIT IN MAY
Source: AlMal, 27 April 2016
Saudi Arabia will transfer USD 1bn as part of its USD 3bn deposit allocated for Egypt in May and the remainder will
be transferred in June and July, according to sources.
The sources told Al Mal newspaper that the deposit would support Egypt’s foreign reserve amounting to USD
16.5bn as part of aids agreed upon during King Salman’s last visit to Egypt.
Another official said that Saudi Arabia has pledged to offer significant assistances to Egypt including the deposit of
support foreign reserve, adding it was agreed that aids will be provided until January 2017.
The government announced earlier that the total amount of the agreements signed during King Salman’s visit is
worth USD 25 bn including USD 1.7bn offered by the Saudi Fund for Development (SFD) for Sinai development
scheme.
The Saudi deposit would push down the US dollar price in the Egyptian market that fell to EGP 10.50 from EGP
11.65 as an Emirati deposit worth USD 2bn was announced.
Egypt will receive the Emirati deposit soon, according to an official.
EGYPT, BAHRAIN SIGN 12 MOUS
Source: AlMal, 27 April 2016
Egypt’s minister of trade and industry Tareq Qabeel and his Bahraini counterpart Zayed bin Rashid signed yesterday
12 memorandum of understandings between the two sides on medications, energy, construction and finance.
Qabeel said that the Bahraini investments are estimated at USD 2.7bn, and Bahrain holds fourteenth place in the
list of countries investing in Egypt.
This came in the joint Bahraini-Egyptian Business Forum held in Cairo, as part of the current official visit of HM King
Hamad bin Isa Al-Khalifa to Egypt, in the presence of the representatives of 40 Bahraini firms and several Egyptian
companies.
The Egyptian minister of trade and industry called on Bahraini business community to pump more investments in
the Egyptian market and take advantage of preferential trade agreement signed with different economic blocs,
which qualify products for being exported.
For his part, the head of Egyptian- Bahraini Business Council Mohamed El Sewedy said that the two sides agreed on
creating an air link between the two countries to increase incoming Bahraini tourism to Egypt, adding the first
phase of the air corridor will be between Sharm el-Sheikh and Bahrain.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 12
BAHRAIN KING STARTS VISIT TO EGYPT
Source: Gulf News, April 27, 2016
Bahraini King Shaikh Hamad Bin Isa Al Khalifa arrived to Egypt on April the 26th evening on a two-day visit aimed at
enhancing ties between the two allied Arab countries. President Abdul Fattah Al Sissi welcomed the Bahraini
monarch at Cairo airport as major roads in the city were adorned with flags of both countries. Talks between the
two leaders are expected to focus on promoting relations between Egypt and the Gulf country, state media said. Al
Sissi and Shaikh Hamad will also review regional hotspots, mainly Syria and Yemen. During the Bahraini leader’s
visit, a number of cooperation pacts will be signed covering agriculture, health care, media, culture and investment.
Bahrain’s investment in Egypt is estimated at around $1.7 billion (Dh6.24 billion), according to official figures. The
visit is King Hamad’s third to Egypt since Al Sissi took office in mid-2014. In March 2015, the Bahraini monarch
attended a major Egyptian economic forum in the Red Sea city of Sharm Al Shaikh. In August last year, he attended
a ceremony in Egypt marking the inauguration of an extension to the Suez Canal.
UAE ALLOCATES USD4 BILLION TO EGYPT FOR DEVELOPMENT AND CBE
Source: Reuters, April 24, 2016
The United Arab Emirates has allocated USD4 billion to Egypt, half of which is in investment and the other half as a
deposit at the Central Bank of Egypt (CBE) to support cash reserves. Details of the UAE aid allocation came at the
end of a visit of Abu Dhabi's crown prince, Sheikh Mohammed bin Zayed al-Nahayan, to Egypt. He said the aid,
authorised by UAE President Sheikh Khalifa bin Zayed al-Nahayan, showed the UAE was firm in its support for
Egypt. The money was aimed at promoting development in Egypt, which has a "pivotal role" in the region. Tarek
Fayed CBE Deputy Governor said that the deposit would support the bank's reserves significantly and help it fight
speculation on the dollar black market. Fayed said the deposit was expected to arrive this week.
EGYPTIAN IMPORTS DECLINE BY 27% IN JANUARY AND FEBRUARY, EGYPT'S RECORDED
US$1.891BN IN NON-OIL EXPORTS, AN INCREASE OF 4%
Source: The Daily News. April 21 2016
Minister of Industry and Foreign Trade Tarek Qabil announced Egypt’s non-oil exports rose to US$1.891bn in
March, up from $1.818bn in a year over year comparison to register a 4% increase.
During the same time period, Egyptian imports decline by 27%, as the country imported US$7.568bn in January and
February 2016 compared to US$10.397bn in a year over year comparison.
Qabil stated the economic metrics align with the ministry’s efforts to meet its target external trade ratios,
rationalize imports and reduce the demand on hard currency. The Ministry of Industry and Foreign Trade
restructure its previous plan to attempt to repay a large portion of the debt it owes to the Export Development
Fund.
Egyptian agriculture exports garnered US $280m in March compared to US $256m in a year over year comparison,
an increase of 9%.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 13
Chemical and fertilizer exports garnered US$289m in March compared to US$259m in March 2015, an increase of
12%.
Print media exports increased from US$2m to US$3m while construction material exports increased by nearly
US$100m to US$406m in March 2016.
“Agriculture imports fell to $324m compared to US$529m during the same two months of 2015, a decline of 9%.
Textile imports declined from US$94m to US$64m, a decrease rate of 32%, and pharmaceutical and medical
imports fell to US$159m compared to US$222m during the same period of 2015, a decline of 28%,” the minister
noted. “Chemical and fertilizers imports dropped to US$489m compared to US$653m during the same period last
year 2015, a decrease rate of 25%.
Industry and textile imports each fell by 24%, while upholstery and textile imports each fell by 32%. Construction
material imports fell by 27% while the value of print material imports decreased by 18%.
Engineering industry imports increased by 8%, while the furniture sector settled at the same value as the past year.
Egyptian exports to European Union amounted US$1.3bn compared to US$1.2bn during March 2015. Exports to
Arab countries amounted to US$2.108bn compared to US$2.76bn during March 2015. Egyptian exports to the
United States decreased to US$272m compared to US$316m during March 2015.
As for African countries-non Arab-countries, Egyptian exports witnessed a slight decrease to US$274m compared to
US$276m during March 2015.
Meanwhile, imports decreased from Arab countries to US$446m in January and February 2016 compared to
US$1bn in January and February of last year, a decline rate of 55%.
Imports from the US fell to US$462m compared to US$932m during the same period in 2015, a decline of 50.4%.
Imports from African countries decreased from US$98m to US$86m, a decrease rate of 12% over the same period
last year. Imports from the European Union slightly increased to $3.564bn compared to US$3.426bn, an increase of
4%.
GAFI MEETS 16 CHINESE COMPANIES TO IDENTIFY COOPERATION OPPORTUNITIES
Source: The Daily News Egypt, April 21, 2016
The delegation expressed interest in cooperating in fields such as transportation, the construction materials
industry and the electric elevator sector.
Chief executive of the General Authority for Investment and Free Zones (GAFI) Alaa Omar met a Chinese delegation
comprising 16 Chinese companies, working in the fields of aerospace, construction, and automotive and bus
transportation manufacturing, according to a press statement on Thursday.
The meeting is part of the Chinese delegation’s visit to Egypt to gauge the viability of investment in Egypt, as well as
discuss opportunities for cooperation in areas of common interest.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 14
Omar expressed Egyptian interest in increasing Chinese investments in the Egyptian market, as part of
strengthening economic ties with China and forming a comprehensive strategic partnership between the two
countries.
The Chinese delegation also expressed interest in cooperating with Egypt in the fields of transportation through
mass transit buses, the construction materials industry, as well as the possibility of cooperation in the sector of
electric elevators.
The delegation showed great interest in identifying investment opportunities in the new administrative capital
project, according to the statement.
During the meeting, the two sides agreed on arranging meetings between Chinese companies and the relevant
Egyptian authorities during an upcoming visit to Egypt.
There are 1,230 Chinese companies operating in Egypt, with a total capital of US$550m.
FRANCE SIGNED DEALS WORTH 2 BILLION EUROS WITH EGYPT
Source: Reuters, April 20, 2016
France signed several deals worth about 2 billion euros with Egypt during a visit by French President Francois
Hollande to Cairo, the French president's office said. The deals included a satellite communications contract agreed
upon following discussions between the two presidents and their defence ministries, the Elysee said. The military
telecommunications satellite is expected to be built by France's Airbus Space Systems et Thales Alenia Space .
French energy Engie firm said earlier that it also signed LNG and renewable energy contracts during the visit.
LOCAL TRADE – MERGERS & ACQUISITION
NISSAN LEADS LOCAL ASSEMBLED AUTO MARKET, AMIC
Saturday 30 April 2016 02:30 PM
Nissan, Japanese auto manufacturer, topped locally assembled private cars bestseller list in Egypt during the first
quarter of this year, with a 36.5% market share versus 21.1% during the same period of 2015, according to a recent
report issued by The Automotive Marketing Information Council (AMIC).
Locally assembled car sales in the first quarter hit 12.9 thousand units, compared to 19.3 thousands in the same
period of 2015, down 32.9%.
The South Korean brand "Hyundai" came in the second place with a 29.3% market share, compared to 32.7%,
followed by Geely Ghabbour by 9.5% vs. 5.2%, and Chevrolet by 8.1%, compared to 25%.
In fifth place came Chery Ghabbour by 7.3%, followed by Jeep by 3.6%, compared to 2.9%, then Toyota by 3.5%
versus 2% and finally BMW by 2.2%, compared to 2.9%.
AUTO SALES SHRINK FOR THE FIRST TIME IN YEARS, AMIC
Source: AlMal, 28 April 2016
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 15
Car market sales shrank for the first time in years, by 31.2% in the first quarter of this year, achieving the lowest
performance since 2013.
Sales of various car kinds recorded 49.5 thousand units, compared to 72.2 thousand units during the same period of
2015, 62.8 thousands in 2014, 49.6 thousands in 2013, and 43.25 thousands in 2012.
The Automotive Marketing Information Council (AMIC) report found a 32% decrease in passenger car sector sales,
to 33.4 thousand units, compared to 48.9 thousand units, while truck sales fell by 34%, to 9.7 thousand units,
compared to 14.8 thousand units.
Bus sales decreased by 23%, to 6.5 thousand units only, compared to 8.5 thousands during the first quarter of
2015, according to the report.
Despite the decline, March sales have been the highest since the beginning of 2016, reaching 17.7 thousand units,
compared to 16.5 thousand in February, and 15.4 thousand units in January.
BELTONE EARNS EGP 5.3 MN IN PROFIT
Source: AlMal, 30 April 2016
Consolidated financial statements of Beltone Financial approved by the board of directors showed that the
company’s net profit fell to EGP 5.3 mn during the fiscal year ending on December 31, compared with EGP15.2 mn
at the end of 2014.
The company’s unconsolidated financial statements showed that Beltone brought in a net profit of EGP 4.5 mn
during the above-mentioned year, compared to a net loss of EGP 1.1 mn by the end of 2014.
The Listing Committee of the Egyptian Stock Exchange has recently approved raising Beltone’s issued and paid-up
capital to EGP 338.031 mn from EGP 325.483 bn, with an increase of EGP12.55 mn, spread over 6.27 million shares.
EGYPT'S CIB APPROVES TWO-WEEK EXTENSION FOR BELTONE FINANCIAL'S OFFER FOR CI
CAPITAL
Source: Reuters, April 28, 2016
Egypt's Commercial International Bank (CIB) approved a two-week extension for an offer by Beltone Financial to
acquire its subsidiary CI Capital , CI Capital's Chief Executive Officer Mahmoud Atalla said. In February, CIB signed a
deal to sell investment bank CI Capital to Beltone for 924 million Egyptian pounds ($104 mln) but the deal has
stalled pending approvals from Egyptian regulators.
MEGA INVESTMENT TO MERGE WITH ACUMEN SECURITIES
Source: AlMal, 20 April 2016
Mega Investment Securities is involved in negotiations to merge with Acumen Securities, according to sources.
The merge will expectedly be completed in two weeks, the sources said, adding the deal is related to Acumen
Securities only and sister company Acumen asset management is not involved.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 16
Al Mal newspaper attempted to get details from the representatives of the two firms but they preferred not to
comment.
Al Mal reported earlier that the officials of Mega Investment Holding said that there are ongoing negotiations with
a brokerage company for merging and creating a larger business entity.
Acumen Securities ranked 20th in the Q1 2015 out of total 139 brokerage firms operating in the Egyptian market.
Acumen Securities Brokerage, of which 99% is owned by Acumen Holding, was established in 2010, as the
brokerage arm of Acumen Holding. Its services include prime brokerage, online trading, research, technical analysis,
margin trading and intraday trading, in addition securities lending.
Mega Investment is the securities arm of Mega Investments Holding, which is capitalized at EGP 100mn.
It is anticipated that Acumen – Mega’s new entity would seize a market share of 1.1%.
ACQUIRING ENJOY BY EMIRATE’S NFPC IS NEARING COMPLETION
Source: AlMal, 18 April 2016
National Food Products Company (NFPC), one of the largest food and dairy manufacturers and distributors in the
United Arab Emirates, is about to complete acquiring Nile Co. For Food Industries – Enjoy owned by Qalaa Holding,
according to sources.
The sources told Al Mal newspaper that the Emirati firm has successfully finalized due diligence assessment, adding
the two parties have agreed upon the details of the deal that will expectedly be executed by the end of the current
month, giving no further details about the deal’s value.
Qalaa Holding had appointed Pharos Holding for Financial Investments as the financial advisor to its exit deal from
Enjoy.
The Enjoy’s selling deal is part of an exit plan by Qalaa Holding from non-core investments.
Founded in 1971, NFPC is a multimillion dollar FMCG organization. Its products are consumed by more than half of
the total population of the UAE every single day. These products are exported to almost every country in the
region. NFPC business units include LACNOR, OASIS, Milco, Plastic and joint-venture with ARLA Foods.
ICT
FEWER OBSTACLES IN INTERNET SECTOR COMPARED TO COMMUNICATIONS: NTRA
Source: The Daily News Egypt, 26 April 2016
If organizational difficulties were eliminated, we would be able to spread nationwide, says Orange Managing
Director Waseem Arsany
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 17
It is difficult to plan for regional internet licenses to have the same destiny as the unified license due to the
differences between the communications sector and the internet sector, said head of the Industry Committee at
the National Telecommunications Regulatory Authority (NTRA), Abdel Rahman El-Sawy.
“There are fewer obstacles in the internet sector compared to the mobile communications sector,” he added.
El-Sawy explained that the internet licenses provision will have a positive impact on the quality of services because
it will limit the number of illegal internet cables. Internet companies currently sell internet subscriptions without
knowing their number subscribers; however, the regional licenses system will limit the demand on illegal cables,
allowing the delivery of high-quality services to subscribers.
El-Sawy believes internet subscriptions must be provided within the scope of the new licenses, and for lower prices,
in order to stimulate demand and encourage subscribers to forgo the use of illegal cables.
Lowering prices after issuing regional licenses is necessary because the majority of citizens in villages and provinces
have low incomes, according to El-Sawy, who requested that the price difference be covered in cash by the
Universal Service Fund (USF) in the NTRA if needed.
Waseem Arsany, managing director of Orange, said that until now the organizational framework of regional
internet licenses remains unknown. The public sector, however, has many organizational difficulties, according to
Arsany, who added that if these difficulties were solved by the NTRA, first-category licensed internet companies like
Orange would be available in all villages.
Arsany said one of the difficulties in spreading internet is the absence of proper infrastructure. Many agents resort
to illegal cables due to the absence of an infrastructure to install landlines. Illegal cables should be immediately
penalized once the organizational infrastructure is resolved, he added. He also demanded the re-pricing of internet
services.
Minister of Communications and Information Technology Yasser Al-Qadi announced that regional licenses would be
delayed, although previously expected to be launched during the second quarter of this year, in order to introduce
an organizational framework to ensure that there will be a demand by distributors.
The regional internet license framework stipulates that a maximum of two licenses can be launched in each
governorate as part of the government’s plan to eliminate illegal internet cables and improve internet services.
INTERNET DISTRIBUTORS WELCOME REGIONAL LICENCES ON CERTAIN CONDITIONS
Source: The Daily News Egypt, 26 April 2016
Licence must stipulate that we offer a similar service to internet companies, says SICIT chairman
Issuing licences for ADSL high-speed internet will have several advantages for informal internet service distributors,
according to a number of officials working in the field.
Hany El-Abd, the chairman of the General Syndicate of Internet, Communications and Information Technology
Workers (SICIT), said issuing such licences will mark an official acknowledgment by the Ministry of Communications
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 18
and the National Telecommunications Regulatory Authority (NTRA) of the role of internet service distributors in the
sector.
Internet distributors operate informally, linking internet connections from internet service providers such as TE
Data and Orange to several homes at a lower fee than prevalent internet subscription rates.
El-Abd said the state treats internet distributors as if they are traders. Obtaining regional internet licences will
mean that internet distributors are officially recognised, along with companies like TE Data and Orange.
This is especially important, as currently the NTRA refuses to intervene in most of the conflicts between distributors
and internet companies in order to resolve them, claiming that these problems should be resolved between
companies and their distributors.
The chairman believes the regulatory framework for issuing these regional licences has not yet been determined.
He rejected the idea of providing services through the licences in the form of buying speeds at “wholesale prices”
from internet companies and then reselling them to the public.
He also requested that these licences be similar to those provided to first-category companies like TE Data and
Orange, with the exception of regional licences being provided for specific areas and governorates.
Providing regional internet licences in a manner that satisfies distribution companies will eliminate the
phenomenon of illegal cables and increase the state’s, as well as the companies’, profitability, El-Abd said. It will
also help the distribution of ADSL high-speed internet.
Internet distributors provide offers and pricing plans that are competitive with illegal internet cables, and this will
eventually help to distribute internet across all areas and villages, according to El-Abd. He noted that reports of
some private institutions showed that the distribution rate of internet in Egyptian households does not exceed 17%,
whereas according to the global standards it should not be less than 40%.
Owner of one of the distributor companies of TE Data’s internet services Mohamed Kotb said that regional internet
licences will have a positive impact on distributors in terms of finances, as it would transform them from
distributors for existing internet service providers to competing companies on a regional level.
Kotb also rejected the idea of launching regional licences by buying speeds at wholesale prices from internet
companies and then reselling them to the public, as he believes this method will not provide an added value.
4.1% GROWTH IN ADSL SUBSCRIPTIONS IN THE LAST QUARTER OF 2015
Source: The Daily News Egypt, 26 April 2016
39.2% of Egyptian households have internet access at home
The number of ADSL subscriptions grew by 4.1% in the last quarter of 2015, increasing from 3.6m subscriptions in
the third quarter to 3.8m in the last quarter, according to a report by the Ministry of Communications.
The number of Egyptian households who use the internet reached 43.5% during the last quarter of 2015, while the
number of households who have internet access at home reached 39.2%.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 19
The report indicated that 98.4% of these households connect to the internet through ADSL in speeds equivalent to
or higher than 256 kb/sec, while 33.2% of households are connected to the internet through mobile broadband.
The report estimated that 0.2% are connected to the internet through narrowband, with speeds less than 256
kb/sec.
According to the report, 22.3% of Egyptian households use the internet to connect with others via social networks,
such as Facebook and Twitter, while 24.2% of households send messages via e-mail.
The report estimated that 12.1% of Egyptian households use the internet to make voice calls, and 11.3% use it to
obtain information about health and health services, 5.2% use it to obtain information about government
authorities, and 6% use it to obtain information about goods and services.
The report also showed that 20% of Egyptian households use the internet at least once a day, while 9.5% use it
once a week and not on a daily basis, and 2.6% use the internet less than once a week.
According to the report, the greater Cairo area has the lion’s share of total ADSL subscriptions, making up 45% of
total subscriptions.
The Delta provinces represent 28% of subscriptions, while Alexandria and Matrouh represent 11%, Upper Egypt
10%, and Sinai and Red Sea cities 6%.
In January 2015, there was a clear decline in the number of internet users, as they declined from 33.8 million users
in December 2015 to 26.2 million users in January 2016.
This decline is the result of the number of USB users dropping to 26.9%, where it declined from 3.8 million users in
December 2015 to 2.7 million users by January 2016.
The number of mobile internet users declined by 24.8% in January 2016, where mobile internet users fell from 26.3
million users in December 2015 to 19.7 million users in January 2016.
EGYPT RANKS 15TH IN INTERNET SPEED AMONG ARAB COUNTRIES
Source: The Daily News Egypt, 26 April 2016
Average broadband speed is 0.95 mb/sec, Jordan and Djibouti rank ahead of Egypt
Egypt ranked low compared to other countries in the Arab world in terms of internet speed, according to a report
by Interactive Middle East Company.
According to the report, Egypt ranked 15th among 22 countries included in the report.
The average broadband speed in Egypt was estimated at 0.95 mb/sec. Morocco, Jordan, Djibouti, Tunisia, Iraq, and
Palestine all ranked above Egypt.
The report showed that Saudi Arabia ranked first in terms of internet speed in the Arab region, where the speed of
broadband internet is estimated at 3.5 mb/sec. The United Arab Emirates ranked second with a speed of 2.7
mb/sec.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 20
Qatar ranked third, where it is estimated that internet speed is 2.6 mb/sec, followed by Kuwait whose speed is
estimated at 2.3 mb/sec.
The report showed that Morocco ranked fifth, where the average internet speed is estimated at 2.03 mb/sec,
followed by Bahrain which ranked sixth with a speed of 1.8 mb/sec.
Jordan ranked seventh with an internet speed of 1.7 mb/sec, followed by Oman in eighth with 1.35 mb/sec.
Algeria ranked ninth with a speed of 1.3 mb/sec, then Djibouti in 10th place with a 1.31 mb/sec speed.
Syria, Tunisia, Iraq, and Palestine occupied positions between 11th and 14th, respectively. Following Egypt came
Sudan, Libya, Mauritania, Lebanon, Yemen, Comoros, and Somalia in the positions between 16th and 22nd,
respectively.
EGYPTIAN TELECOMMUNICATIONS SECTORS POSTS EGP 1BN GROWTH IN Q3 OF 2015
Source: The Daily News Egypt, 17 April 2016
The cost of ADSL internet and mobile services fell between October and December 2015
The Ministry of Communications and Information Technology published a report on the fourth quarter of 2015,
indicating a decline in how much consumers paid for mobile internet telecommunication services, compared to the
corresponding period of 2014.
According to the report, the cost of mobile services declined from $2.9 during the fourth quarter of 2014 to $2.6 in
the fourth quarter of 2015. Asymmetric digital subscriber line (ADSL) internet prices fell from $10.4 during the last
three months of 2014 to $6.3 during the corresponding period of 2015.
According to the report, the cost of using a mobile phone is calculated according to the price paid in advance for
every 30 calls per month, distributed over the same mobile network and over competing mobile networks; during
peak and non-peak times and on weekends, in addition to 100 text messages.
ADSL internet prices are calculated according to the lowest price of a monthly subscription for an internet company
with the highest market share of subscribers.
The report also revealed that the telecommunications sector’s contribution to Gross Domestic Product (GDP) rose
by 7.3% during the fourth quarter of 2015 compared to the corresponding period of 2014. The sector’s total
contribution to GDP reached approximately EGP 14.2bn during the period from October to December 2015,
compared to EGP 13.2bn during the corresponding period of 2014, an increase of almost EGP 1bn.
The contribution of the telecommunications and IT sectors to the state’s GDP was about 3.1% during the fourth
quarter of 2015, compared to 2.9% during the corresponding period of 2014.
The number of mobile users grew slightly in January 2016 compared to December 2015, according to a report by
the Ministry of Communications and Information Technology.
The report indicated that the number of mobile users increased from 94 million users in December 2015 to 94.16
million users in January 2016, a growth of 0.15%.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 21
According to statistics cited in the report, the number of mobile users in January 2016 declined by 1.1% from
January 2015, as the number of mobile phone users fell from 95.2 million users in January 2015 to 94.1 million
users in January 2016.
The report also revealed a significant decline in the number of internet users during January 2016, as the number of
internet users fell from 33.8 million users in December 2015 to 26.2 million users in January 2016.
EGYPTIAN ICT MARKET WILL ACHIEVE GROWTH RATE ESTIMATED AT $8.95BN IN 2016,
$10.32BN IN 2019: IDC GROUP VICE PRESIDENT
Source: The Daily News Egypt, 17 April 2016
We think Egypt is a market with strong potential and full of talent that we cannot ignore
Jyoti Lalchandani, IDC Group Vice President & Managing Director for Middle East, Africa and Turkey
IDC chose Egypt for their regional research centre because the Egyptian market features strong potential for growth
and is a large pool of talent, said Jyoti Lalchandani, IDC Group Vice President & Managing Director for Middle East,
Africa and Turkey.
In an interview with Daily News Egypt, Lalchandani said IDC plans to increase cooperation with the Information
Technology Industry Development Agency (ITIDA) on more events and in strategic projects.
Can you provide an overview of the CIO summit?
This is the second edition of the CIO summit that IDC is organising in Egypt in partnership with ITIDA. The CIO
summit is IDC’s flagship or the main conference that we organise in a very few, select countries across the world.
We hold no more than 10 CIO conferences across the world. Egypt was chosen last year and we hosted the first
summit, and this year we are hosting our second summit.
The CIO summit is really a platform to bring together some of the leading CIOs, along with industry representation
and government, to discuss the key trends that are shaping the landscape in Egypt. Today, we have brought
together over 200 CIOs from various industries; banks, financial services organisations, public services, government
administration, retail, distribution, manufacturing, health care, and a wide range of industries.
Leading CIOs will share with us their perspectives on digital transformation, and on their key challenges and
priorities. We also brought in representation from the industry; our partners who will present their top leadership
in areas around the platform, like Cloud, Analytics, Mobile, and Social, and also talk about IDC’s research on
animation accelerators and digital transformation.
So the CIO summit is really IDC’s flagship. It is a very exclusive event, and it is invitation only. So, we decide which
CIO should be part of the conference and we decide the best practice sessions. It is a conference that is designed by
CIOs for CIOs, so a lot of the content and topics are actually chosen by CIOs as part of IDC’s research process.
How do you see growth in the IT market in Egypt?
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 22
Our projection for growth in the IT market this year is that it is going to be moderate, so you are not going to see
exceptional growth for multiple reasons. One of the reasons is that there is generally an economic slowdown in
many countries, including the Gulf, Africa and, of course, Egypt. We are seeing a more cautious approach, more
cautious spending. The second reason is of course the currency fluctuation, which means that in US dollar terms,
we expect the market to be impacted because of fluctuation in the currency and shortage in US dollars in the
country. We are already seeing some impact of that in the overall ICT landscape. However, we think that the export
of IT and ICT services from Egypt to other countries will remain fairly strong in the next few years.
In terms of investment, we are seeing a lot of investment still very much centred on infrastructure. Almost 70% of
the overall spending in Egypt is still focused on hardware infrastructure. Spending on areas like software packages
and IT services is still quite small, but as the market matures and grows we’ll see the shift from IT hardware to
software packages and IT services.
According to IDC’s latest projections, the Egyptian ICT market will achieve a growth rate estimated at $8.95bn in
2016 and a growth of $10.32bn, or 9%, in 2019, which will come mostly as a result of spending on IT and software
packages. We also expect the Egyptian economy to achieve strong growth rates as a result of foreign investment
under the new government.
Have you the chosen a space for the IDC office?
Yes, we have chosen a rental in Smart Village. Our initial plan was to have 10 people at the start of this year, and we
already reached that limit. So we are already now looking for a bigger place as we hope to be between 15 to 20
people by the end of 2016.
Why have you decided to open your centre in Egypt?
For us, Egypt is a very open market for a variety of reasons. First of all, Egypt has some of the best talents in the
region, so we could have access to great talent, especially in IT and telecom. Also ITIDA has invested a lot over the
past few years, so we have seen a great pool of talented people coming through.
Secondly, we think it is a market we cannot ignore. We are seeing some stability in the country now, and we hope
that this will continue. We think it is a market that has strong potential for growth; it has close to 100 million
people, it has a great pool of talent, and the penetration of ICT is still quite small, which means there is significant
potential for growth in the industry.
Another important reason is that we feel we can leverage Egypt, given its location; we can support a number of
business units in the Gulf, Africa, and possibly in Europe. We think we have the right structure and the right backing
from the government and ITIDA is supporting us, so we have the right formula for us to expand our operations in
Cairo.
Will your office in Egypt be regional?
Yes, it will be a regional centre focused on the Middle East and Africa regions. There will be staff here that will be
based in Cairo, but will have a regional role and regional responsibilities.
What is the size of your investments in Egypt after opening the centre?
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 23
Our investments here are basically our infrastructure. Basically, that includes the people we have, the office we
have, the underlying infrastructure in terms of IT equipment. We do not have machinery, we are in the service
business; so we provide research and we provide advice to customers. So, our investments in the country are in
terms of human capital. Developing human capital and having human capital on the ground that would support the
country and the local economy.
What benefits would Egypt get from IDC?
A lot of benefits. First of all, IDC is a trusted source of information for hundreds and thousands of companies in the
IT and telecom industry, so IDC opening a centre here will lead to all the large multinational companies viewing
Egypt as a stable market for investment.
Secondly, by being here, IDC will also expand its research coverage. We will provide a lot more coverage of research
areas to domestic ICT investors. This means that the domestic ICT industry could expect to get a lot more
information on the local market than they used to.
We are also working very closely with the MCIT and ITIDA, and being here on the ground, we believe we can do a
lot more together. We can organize more events and more programmes, we can work in many other strategic
programmes along with ITIDA. We think that it is a good sign for everybody.
What is your programme with ITIDA for promoting SMEs?
SMEs are definitely one of the most important segments of the population. They represent a significant majority of
companies. For SME to expand, flourish and progress, ICT and telecom will play a major role. We are currently
collaborating with ITIDA to design a programme that we think will be interesting, but we have not formalised
anything yet, so we will wait until we develop it more and then we will make a formal announcement once it is
finalized.
NOKIA FOCUSES ON LTE, DEVELOPMENT OF GOVERNMENT SERVICES TO INCREASE MARKET
SHARE: NOKIA MARKET HEAD FOR MIDDLE EAST AND AFRICA
Source: The Daily News Egypt, 5 April 2016
According to El-Leithy, Nokia robust R&D spend, with pro-forma Eur 4.2 billion spent in 2014, greatly supports all
our research at Bell Labs and FutureWorks
Nokia Market Head for Middle East and Africa Amr K. El-Leithy
Nokia Market Head for Middle East and Africa Amr K. El-Leithy said the region’s markets have many investment
opportunities in the communications sector, such as LTE wireless communication services and government services
which depend on cloud computing technology.
El-Leithy told Daily News Egypt that Egypt is among the six most important markets in the region for the company,
revealing that Nokia cooperates with Telecom Egypt (TE) in the project to modernize the telecommunications
infrastructure by adding 100 GB fiber-optic cables.
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 24
According to El-Leithy, Nokia robust R&D spend, with pro-forma Eur 4.2 billion spent in 2014, greatly supports all
our research at Bell Labs and FutureWorks.
What is your opinion of the communications market in the Middle East?
Most Middle East telecom markets are promising, such as Egypt, UAE, Saudi Arabia, Iraq and Iran. Therefore, we
work with the majority of mobile service operators in those markets.
For example, we deal with the three major companies in Saudi telecoms market—STC, Mobily, and Zain. We also
cooperate with the Saudi government in other projects, such as the implementation of the communications
infrastructure for the Riyadh Metro project.
In the United Arab Emirates market, we cooperate with Etisalat and du, in addition to some government agencies.
We have finished implementing the 4G projects—LTE, and the installation of 100 GB fibre-cables—in a number of
these markets, which reflects Nokia’s interest in the Middle East’s promising markets.
What is the volume of the Middle East share in Nokia’s global business?
The Middle East is one of the most important areas for Nokia, as it commands a high volume of the parent
company’s global business.
What are the challenges facing the company in Middle East markets?
The decline of oil prices affected the growth of some of the Middle East and the Gulf markets because it has
affected the states’ budgets, as well as the budgets of some companies. In addition to the political instability in
some countries are some of the most important challenges.
The devaluation of the local currency against the dollar affected the growth of the telecommunications market in a
number of countries in the region and such as Turkey, South Africa, Nigeria and Egypt.
What investment opportunities are there in the region’s markets?
There are many opportunities, especially in African markets, such as the use of cloud computing in providing
government services. We also provide this service in cooperation with the governments of Burkina Faso and Ghana,
as well as cooperating with many telecom companies in Africa to modernise their services.
We also provide IT solutions to reduce costs and improve the quality of services in countries that are suffering from
the devaluation of the local currency. In addition, we support mobile operators which are preparing to provide 4G
services, such as in Algeria, Egypt and Nigeria.
One of the most important investment opportunities in the African market is the use of fibre-optic cables instead of
copper cables. Meanwhile, we are focusing on cooperation with the information security companies that offer good
investment opportunities, as well as providing telecommunications services in the transportation sector.
The volume of business in the Middle East markets has shrunk significantly. How do you deal with that?
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 25
Indeed, some regional markets have shrunk, but we make up for this through the expansion of technological
solutions that contribute to cutting costs. Moreover, we are focusing on developing markets because they offer
many investment opportunities, such as 4G licences being granted in Algeria.
Egypt also is expected to grant 4G licences by the end of 2016 or during the first quarter of 2017. The Iraqi and
Iranian markets are also promising, especially after lifting the embargo on Iran.
When was the acquisition of Alcatel-Lucent completed?
Nokia decided to acquire Alcatel-Lucent in April 2015, which was officially announced in January 2016 after the
completion of legal proceedings.
How does the acquisition support Nokia’s plans?
Nokia was distinctive in the mobile networks services, while Alcatel-Lucent was known for fibre-optic cables and
some mobile applications. The combination of the two companies will help provide integrated technology solutions
and raise the market share and business volume of Nokia. The acquisition of Alcatel-Lucent will also increase
investment injected in the market.
Nokia is currently seen as the world leader in 4G services, and became the first in fibre-optic cables after the
acquisition of Alcatel-Lucent.
What is the size of the R&D budget annually?
We spend roughly €4bn annually on research and development works. There are 40,000 scientists and engineers
working in different sectors of the company to develop and apply the latest techniques of telecommunication
technology.
Some reports mention that large companies resorted to mergers and acquisitions to overcome the shrinkage of the
market size.
The market is indeed very competitive and acquisitions support the size of works inside the company that, in turn,
help the company increase its share in the market. Our sector is very R&D intensive, so getting the right scale is
critical.
What new technology does Nokia plan to present in the coming period?
We are focusing on the Internet of Things (IOT) technology which comes amid plans to prepare the environment for
applications that might be launched by telecommunication operators in the future, such as health applications and
mobile phone network management through safe platforms.
We are running preparations to present 5G technology, which is expected to be among our main regional targetsin
2017/2018. 5G helps to increase download capacity, which is useful for videos, particularly considering the trend
towards dominant video content on the internet. In addition, it will increase the capacity of fibre-optic cables from
100GB to 400GB.
On the domestic level, what investment opportunities have caught your attention?
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 26
We are cooperating with the Ministry of Telecommunication and Information Technology in updating the
infrastructure of the telecommunications sector, including the project of replacing copper cables with fibre ones of
a 100GB capacity. We are cooperating with Telecom Egypt in this project and we presented our ideas for the
upgrade from fixed internet services to high speed broadband.
We are also working with the National Telecom Regulator Authority (NTRA) as a consultant for the new
technological services, such as cloud computing and 4G.
Is the Egyptian market ready for 4G technology?
Egypt has the means to implement 4G services and the three mobile operators are ready as well. Egypt needs 4G,
especially owing to the increase in mobile-internet users. However, the Egyptian market requires better
organisation before launching the new service, in addition to providing all necessary means for launching 4G,
whether frequencies or developed infrastructure.
Did the company start preparing its network to receive 4G services?
We are currently putting forth the vision to supply 4G services. However, we have not taken any actual steps, as we
are awaiting licenses to be issued.
What transformations are required in the telecommunications sector, technically, in order to move from 3G to 4G?
There are two ways. One is updating the mobile network entirely. However, this is more expensive than the second
way. This second way is carried out through supplying the current networks with a specific technology that provides
4G technologies.
How did you overcome the crisis of providing the US dollar in the Egyptian market?
The devaluation of the local currency against the US dollar did not occur in Egypt alone, but also in many countries
in the region. We have the experience to deal with similar reform policies. We faced similar situations in many
countries and such crises did not affect our commitment towards our customers.
The situation that Egypt is facing now is in my view a temporary one. The serious steps taken by the government
and the Central Bank of Egypt (CBE) prove that the country’s economic status will soon be improved.
Are there any difficulties in providing an efficient and trained technical workforce in the telecommunication sector?
Nokia Egypt has over 700 employees, which shows how many efficient and trained employees are present in the
domestic market. Nokia Egypt is known for its efficient and well trained engineers who not only support our
operations in Egypt but across the Region and in Europe as well.
Who are your most prominent customers in the Egyptian market?
We provide our services to the three Mobile operators and Telecom Egypt, besides a number of governmental
sectors.
What size does Egyptian constitute out of Nokia’s total business in the Middle East?
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 27
Egypt is one of the six most important markets to Nokia in Africa and the Middle East. We have provided our
services in the Egyptian market since the 1970s. We have vast experience in the Egyptian market, especially after
the merger of the two companies.
Are there plans to expand your market share regionally?
We are going to focus on the new licences that will be granted to some Middle Eastern markets, in addition to
expanding our services in these markets as they have a great potential to grow. We also plan to expand our
technological services provided to the governmental sector.
POLITICS
PARLIAMENT GRANTS GOVERNMENT ITS VOTE OF CONFIDENCE
Source: Ahramonline, April 21, 2016
Egypt's government got its first vote of confidence in Parliament, with Prime Minister Sherif Ismail saying
afterwards that "Egypt is still in a state of danger and all state institutions and citizens should join forces to stand up
to the challenges." The vote of confidence was reached with 433 MPs voting in favour according to an electronic
tally. In a 10-minute speech ahead of the vote, Prime Minister Ismail addressed a wide array of domestic issues and
challenges. "We do not have the luxury of choosing between two options; success or failure, reform or corruption,
and winning the war of the future or being defeated before the forces of the past," said Ismail. He also said that his
government intends to reform the country’s subsidy policy to make sure that "subsidies go to those who deserve
them only."
ENERGY – OIL & GAS
TOTAL EGYPT INVESTS EGP 20MN IN 12 GAS STATIONS, SENIOR OFFICIAL
Source: AlMal, 24 April 2016
Total Egypt is planning to inject investments worth 20 million pounds in building between 10 and 12 fuel stations
during the current year, according to the company’s Media Relations Director Tariq Gohar.
Gohar said the company has opened, a month ago, a refueling station on the Autostrad Road, adding that works are
being done on many other stations in preparation for opening them.
He pointed out that the company is negotiating with several international auto companies agents to reach joint
agreements on equipping brands’ cars marketed by these agents in Egypt with oils, technical support and training.
Total Egypt has announce at the end of last week the winners in entrepreneurs competition launched by the
company late last year; and winning projects included areas of irrigation, health care and care for people with
special needs.
TRADE FAIRS AND EVENTS IN EGYPT 2016
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 28
Event Description Schedule Venue
Plastex
Trade fair for plastics
technology
14-17 January Cairo International
Convention Centre
(CICC)
Lifetech Expo
International Trade fair for
Elevators & Escalators,
technologies and
Accessories
21-24 January Cairo International
Convention Centre
(CICC)
Egypt Transport Infrastructure
Summit
2nd Annual Summit in Cairo
- Meet the transport
stakeholders responsible for
overseeing Egypt’s most
ambitious infrastructure
projects
26.01.2016 IQPC - International
Quality & Productivity
Centre| Cairo |
Digi Sign Africa
Advertising technology 28-31 January Cairo International
Convention Centre
(CICC)
Underground Infrastructure and
Deep Foundations
Laying the foundations for
Egypt’s future
02.02.2016 IQPC - International
Quality & Productivity
Centre| Cairo |
Egypt Downstream Summit and
Exhibition
The summit is bringing
together key Egyptian
stakeholders with
international downstream
technology and service
providers
15.02.2016 Fairmont Heliopolis &
Towers, Cairo
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 29
Event Description Schedule Venue
Egypt Energy Investment Summit
Explore the opportunity in
Egypt’s energy and power
sectors, with a focus on
private sector development
and investment realization
16.02.2016 Intercontinental Hotel
Windoorex + Glass & Aluminium
Middle East 2016
The 7th International
Exhibition for Glass,
Aluminum, Windows, Doors,
Skylights and Curtain Wall
Technology, Components
and Prefabricated Units
18.02.2016 Cairo International
Convention Centre
(CICC)
Cement and Concrete Middle East
Second International
Exhibition for Cement,
Concrete & their supported
industries in Egypt.
18.02.2016 Cairo International
Convention Centre
(CICC)
Fabex Metal and Steel Middle
East
Steel structures and metal
forming
18-20 February Cairo International
Convention Centre
(CICC)
Grain Tech Middle East
Fodders Equipment and Rice
Beaters
23-25 February International Fair
Ground - Hall 19 -
Cairo – Egypt
German-Egyptian Business Forum
With site visits in Egypt.
Cairo | Ismailiya |
Alexandria.
29.02.2016 German-Arab
Chamber of Industry
and Commerce (GACIC
- AHK)
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 30
Event Description Schedule Venue
57th Cairo Fashion & Tex
The International Fashion,
Apparel & Textile Exhibition
03.03.2016 Cairo International
Convention Centre
(CICC)
Forth International Conference in
Nanotechnology, Biotechnology
and Spectroscopy ICNBS Egypt
2016
The conference will take
place over 3 days, and will
be divided into sections
that allow focusing on the
conference topics
04.03.2016 | 6th of October |
Naqaa Foundation for
Scientific Research,
Technology and
Development
Microfinance Egypt 2016
Strengthening Egypt’s
Economy through the
provision of microfinance
to the countries
entrepreneurs and MSMEs
21.03.2016 The Nile Ritz-Carlton
Cairo
2nd
Future Rail and Metro
Creating a platform to
increase multimodality and
examine projects and
technologies to maximise
capacity safely and
efficiently
29.03.2016 IQPC - International
Quality & Productivity
Centre
Cairo, Egypt
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 31
Event Description Schedule Venue
SDEC(Sustainable Developments
Exhibition & Conference) 2016 –
Cairo
SDEC the Region's Leading
Sustainable Developments
Event >> www.sdec-
mea.com
04.04.2016 Fairmont Towers
Heliopolis
Pharmaconex 2016
Industrial Pharmaceutical
event in North Africa and
Middle East.
05.04.2016 Cairo International
Convention Centre
(CICC)
International Conference on
Agricultural Biotechnology
Applications
to address new challenges
and emerging researches in
the multidisciplinary arena
of Biotechnology and Life
Sciences.
05.04.2016 Sharm El Sheikh
Faculty of agriculture,
Cairo university
CityScape Egypt
Real Estate, investment and
development
07-10 April Cairo International
Convention Centre
(CICC)
Cafex
Specialized Fair for Café &
Restaurant Equipment,
Supplies, Furnishing and
services
13-16 April Cairo International
Convention Centre
(CICC)
Mediconex
Mediconex Cairo Health is
the number one medical
event that links science,
technology, and business all
in one place at one time.
19-21 April Cairo International
Convention Centre
(CICC)
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 32
Event Description Schedule Venue
MOC 2016
Mediterranean Offshore
Conference & Exhibition has
become through the years
the most important
international meeting
focusing on oil, gas and
energy.
19-21.04.2016 Bibliotheca Alexandina
Conference Center
| IES International
Exhibition Services
EgyMedica
Medical 05-07 May Cairo International
Convention Centre
(CICC)
Food Africa
The International Trade
Exhibition for Food and
Beverages Serving Egypt &
the African Markets
04-07 May 2016 Cairo International
Conference Center
CICC
Afro Packaging & Food 2016
5th International Exhibition
for Packaging & Food
Processing technology
26-29 May Cairo International
Conference Center
CICC
eLearning Africa
International conference on
ICT for development,
education and training.
24-26 May Cairo International
Convention Centre
(CICC)
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 33
Event Description Schedule Venue
Sahara
Agro-food industry 24-27 September Cairo International
Convention Centre
(CICC)
Cairo Energy 2016
International Exhibition &
Conference for Oil, Gas &
Energy
02.10.2016 Cairo International
Convention Centre
(CICC)
Pharos 2016
The International Exhibtion
& Conference for Logistics,
Ports & Shipping
02.10.2016 Cairo International
Convention Centre
(CICC)
Paper Middle East
Paper, board and converting
industry
22-24 October 2016 Cairo International
Convention Centre
(CICC)
MS Africa & Middle East
Building machinery and
stone design
10-13 October 2016
Cairo International
Convention Centre
(CICC)
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 34
Event Description Schedule Venue
Handling Expo
Material Handling and
storage equipment
17-20 November
2016
Cairo International
Convention Centre
(CICC)
MACTECH
Machinery tools, industrial
tools, welding and cutting
equipment
17-20 November
2016
Cairo International
Convention Centre
(CICC)
Transpo-Tech
Commercial Vehicles and
spare parts
17-20 November
2016
Cairo International
Convention Centre
(CICC)
Airtech
Compressed Air Technology
and Accessories
17-20 November
2016
Cairo International
Convention Centre
(CICC)
Mefsec
Safety Equipment 10-13 December
2016
Cairo International
Convention Centre
(CICC)
Electrix
Energy and Electrical
Engineering
4-6 December 2016
Cairo International
Convention Centre
(CICC)
Commercial Office, Y.Sh - Monthly Economic and Commercial Bulletin–April 2016 Page 35
Event Description Schedule Venue
Cairo ICT
ICT 27-30 November
2016
Cairo International
Convention Centre
(CICC)