Good morning, wonderful people, and welcome to the final workday of April. That means about 32.6% of the year has passed. The upside: We have about 246 days left to hit our budgets.

PSA- It’s another short work week. Thursday, 4 May is off in observance of Labor Day, the Manpower Ministry confirmed in a statement Thursday.

THE BIG STORY here at home: Egypt will not default, says Madbouly. Prime Minister Moustafa Madbouly moved yesterday to reassure international markets about the sustainability of Egypt’s debt amid concerns among some investors that Egypt faces a rising risk of default. “I reassure you that the Egyptian state has not failed, nor will it fail, to pay back its international debt,” he said in televised statements (watch, runtime: 29:40). “Egypt respects its financial obligations … so far we have never delayed a debt payment.”

Madbouly’s comments come following a tough week in the markets: The sell-off of Egypt’s USD bonds accelerated last week as foreign investors continued to take a dim view of the country’s debt outlook. The sell-off was aggravated by S&P Global Ratings’ decision to cut its outlook on Egypt’s credit rating last week, which said that a lack of progress on privatization and reform was putting the country’s ability to meet its external funding needs in jeopardy. Moody’s jumped in last Wednesday, writing in a note that slow progress on the state’s asset sale program is contributing to “downside risk to Egypt’s debt affordability and debt sustainability profile.”

Madbouly signaled we can expect asset sales by the end of June, sayinghis government will start selling off state assets to private-sector investors before the end of the current fiscal year. The government is aiming to raise up USD 2 bn from asset sales by June, Madbouly said. That’s on par with the USD 2.5 bn June 2023 target to which we’ve committed in our loan agreement with the IMF.

More companies (including military-owned) to join the program: “The state will not back down from the privatization program … there are more companies joining,” he said, adding that the state is preparing over 10 military-owned companies for offering. President Abdel Fattah El Sisi suggested earlier this year that more military firms could be earmarked for privatization. CI Capital has been marketing bottled drinks firm Safi and fuel retailer Wataniya to strategic investors since the middle of March, but has made no public comment on the state of the transactions.

The government announced its rebooted, 32 company program in February. Talks with Gulf sovereign wealth funds on the sale of stakes in United Bank and Telecom Egypt have apparently fallen through amid expectations for a further currency devaluation. Other reports have suggested that our Gulf allies want to see more progress on reforms before investing.

Could this change now that we’re past Eid?Several press reports recently suggested that we could move towards the first sale after the Eid break. One unconfirmed report claimed the sale of United Bank was imminent, while the Public Enterprises Ministry is expected to soon publish the tender booklet for the project to refurbish Cairo’s historic Continental Hotel. Our friends at the Sovereign Fund of Egypt, meanwhile, have taken a portfolio of seven five-star hotels to market.

Subsidized commodities are about to get pricier: The government will start gradually raising the prices of commodities sold to ration card holders, Supply Minister Ali El Moselhy said during a presser yesterday (watch, runtime: 34:06). The price review will start “in the coming days,” the minister said, adding that without raising prices “the government will not be able to fund or provide these commodities.”

Food prices are rising at a record rate:Inflation jumped 32.7% y-o-y in March as prices continued to accelerate on the back of the series of currency devaluations, the foreign-currency crunch, and higher fuel prices.

ALSO FROM THE PRESSER- Egypt has 2.6 months’ worth of wheat in strategic reserves, El Moselhy said. The Madbouly government has so far bought 365k tons of wheat during this year’s local harvest, he said. The country has strategic reserves of meat sufficient for 7 weeks, he added.

AND- Customs exemptions for gold imports? The Supply Ministry is working on a proposal that would allow Egyptians living abroad to import gold to Egypt without paying customs duties in a bid to help stabilize the gold market, ElMoselhysaid. Local gold prices have more than doubled over the past year amid the ongoing foreign exchange crunch.

MORNING MUST-READ-

Yuval Noah Harari is really freaked out about AI. The Sapiens author (particularly popular among guys over the age of 35 here in Omm El Donia) writes cogently in the Economist that artificial intelligence has “hacked the operating system of our civilisation” by having “gained some remarkable abilities to manipulate and generate language, whether with words, sounds or images.”

His starting point: “We have just encountered an alien intelligence, here on Earth. We don’t know much about it, except that it might destroy our civilisation. We should put a halt to the irresponsible deployment of AI tools in the public sphere, and regulate AI before it regulates us. And the first regulation I would suggest is to make it mandatory for AI to disclose that it is an AI. If I am having a conversation with someone, and I cannot tell whether it is a human or an AI—that’s the end of democracy.” Read Yuval Noah Harari argues that AI has hacked the operating system of human civilization.

HAPPENING TODAY-

The House is back from its Eid vacation: MPs will spend their first day back debating and then voting on a bill regulating the possession of dangerous animals and dogs. The bill would introduce new controls on personal dog ownership, measures to contain the spread of stray animals, and regulations on the possession of dangerous animals. The bill has momentum after considerable media attention last month to a pitbull attack.

Among the House committee meetings today:

  • The Economic Affairs Committee will discuss ways to market Egyptian exports to help increase our FX revenues;
  • The Industrial Committee will look into issues facing Port Said and Aswan industrial zones and discuss the government’s industrial strategy;
  • The Environment and Energy Committee will discuss the government’s policy to expand the use of EVs;
  • The Arab Affairs Committee will look into Egyptian-Iraqi-Emirati-Jordanian economic partnership;
  • The SMEs Committee will review the impact of the FX crunch on SMEs.

On the House agenda this week:

  • Monday: The House will vote on amendments to the law regulating the Nuclear Power Plants Authority (NPPA), which would fully exempt from taxes all parties involved in building and operating nuclear projects.
  • Tuesday: Religious Endowments Minister Mohamed Mokhtar Gomaa will answer questions from MPs on the ministry’s role in reforming religious discourse and improving the finances of mosque clerics.

AND- It’s deadline day for e-invoicing registration: Self-employed professionals who work with entities required to file electronic invoices need to register on the e-invoicing system by today. The Egyptian Tax Authority earlier this month said it was exempting self-employed people who work with end consumers from the requirement to file electronic invoices following an outcry from doctors, lawyers and pharmacists.

WATCH THIS SPACE-

#1- AWID is looking at Egypt’s desalination program:The water infrastructure investment platform established by Metito and British International Investment earlier this year could be interested in building two desalination plants here, Al Borsa reports, citing Metito CEO Ramy Ghandour. Africa Water Infrastructure Development (AWID) was set up by the British DFI and Emirati water company in March to invest in water projects across Africa.

#2- Is Nahr Elkhair Development plotting an IPO? EGX-listed Nahr Elkhair Development and Investment is considering listing its EGP 100 mn subsidiary, Al Ahly Group, on the EGX, the company’s co-founder Ahmed Mohamed Sayed told Al Mal TV in an interview on Thursday (watch, runtime: 39:56.)

HAPPENING THIS WEEK-

National Dialogue kicks off: The National Dialogue will hold its first session on Wednesday. The dialogue was initially set to kick off in January but was postponed after the political parties failed to name their representatives to the sessions on time.

The African Private Equity and Venture Capital Association is holding its annual summit in Cairo this week: The event will run Monday through to Friday at the Four Seasons Nile Plaza.

It’s Fed week: Analysts expect the Federal Reserve to raise interest rates by 25 bps when it meets on Tuesday and Wednesday this week, according to Bloomberg. This would be the tenth consecutive rate hike by the central bank, which is trying to rein in stubbornly high inflation which remains significantly above target.

THE BIG STORY ABROAD-

The race to prevent First Republic from becoming the fourth US bank to collapse this year: The Federal Deposit Ins. Corporation (FDIC) has asked interested banks — JPMorgan Chase, PNC Financial, US Bancorp, and Bank of America — to submit final bids for embattled US lender First Republic Bank today with the aim of securing a buyer before tomorrow. This comes following a challenging week for the Californian bank which saw its share price tank after it reported it suffered larger-than-expected outflows during the banking crisis in March. (Reuters | Washington Post | Bloomberg | FT | Wall Street Journal | CNBC)

ALSO RECEIVING ATTENTION- A Russian fuel storage facility in Crimea erupted in flames after being attacked by two Ukranian drones, which a Ukrainian military official called “God’s punishment” on Russia. The attack destroyed over 10 tanks of oil products for Russia’s Black Sea Fleet. (Reuters | AP | DW | BBC)

The Enterprise Exports & FDI Forum, our latest industry-specific conference, is taking place on Monday, 15 May at the Four Seasons Cairo Nile Plaza The Enterprise Exports & FDI Forum will give insiders and newcomers alike the chance to talk about how to develop an export-centered business and how their companies can help Egypt build an export-led economy that makes us a magnet for foreign direct investment (FDI).

Why exports & FDI? In the wake of successive floats of EGP, exports and FDI have never been more important to our economy — or our businesses. We’re gathering some of the CEOs, top execs from local companies and multinationals, investors, bankers and finance folks to speak on how businesses can adapt their strategies to be export-oriented and what Egypt as a country can do to draw foreign investment and much-needed FX. Expect it to be heavy on lessons learned in Egypt and other global growth markets — and lots of success stories.You can learn more on our conference website here.

Some of the biggest names in business and finance are on board — are you? The Enterprise Exports and FDI Forum is taking place with the generous support of our friends, including:

Banking partners: Banque Misr | Al Baraka Bank | Emirates NBD | HSBC

Lead partners: DB Schenker | DP World | East Port Said Development | IDG | IFC | Madinat Masr

Event partners: Beyti | Concrete | Global Corp | Grant Thornton | Hassan Allam Utilities

WANT TO BECOME A COMMERCIAL PARTNER? Ping a note to Moustafa, our head of commercial, here.

HAVEN’T REQUESTED AN INVITE YET? If you’re a C-suite exec, business owner, DFI staff, export executive, investor or banker, please fill out the form here to signal your interest, letting us know your name, title and where you work.

CIRCLE YOUR CALENDAR-

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

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