Good morning ladies and gents: Tax is well and truly back on the agenda as we start the beginning of a new week, with MPs getting ready to discuss not one but two bills that will both cut and raise (but mostly raise) various taxes and duties as the government looks to bolster revenues heading into the new fiscal year.

Also: We also bring news of more potential investment from China, a more specific timeframe for our maiden panda bond issuance, and a look at how the FX crunch could be impacting the nation’s food security.

But first things first…

It looks like we have another dusty day ahead: Greater Cairo is looking at more dusty winds throughout the day with a 30% chance of rain, according to the Egyptian Meteorological Authority. The mercury will rise to 34°C during the daytime before dipping to lows of 21°C.

Bad weather forces closure of two ports: Authorities yesterday shut down the Red Sea ports of Suez and Zeitiyat due to strong winds and high waves, the Red Sea Ports Authority said in a statement.

HAPPENING TODAY-

The House is back in session: MPs will question Finance Minister Mohamed Maait over the ministry’s proposed tax amendments, including the package of tax and development fee hikes and changes to income tax given approval by the House Planning and Budgeting Committee last week. We have more details on the income tax changes in this morning’s news well, below.

At the committees:

  • The Budget Committee will continue discussions on the state budget for the fiscal year 2023-2024;
  • The Industrial Committee will hold three meetings to discuss the problems facing the spinning and weaving industry, the dramatic rise in prices of building materials (particularly cement and reinforced steel), and how to boost private investments in the building materials sector;
  • The Agriculture Committee will hold discussions on this season’s wheat harvest;
  • The Environment and Energy Committee will discuss recommendations from the COP27 summit and the government’s green hydrogen plans;
  • The Youth Committee will review Egypt’s preparations for next year’s Summer Olympics.

Tomorrow at the House: MPs will discuss and vote on two foreign agreements on maritime transport, and a proposal for Egypt to join the 2006 Maritime Labor Convention.

The Builders of Egypt Forum takes place at the Nile Ritz-Carlton: The event will bring together more than 300 business leaders in the contracting and real estate sectors, financial institutions, and local and regional business organizations.

We’ll know who’s going to be leading Turkey for the next five years: TurkishPresident Recep Tayyip Erdogan is in pole position to win a third term in office as voters head to the polls today. The incumbent only narrowly missed out on claiming the presidency in the first round of voting earlier this month, and now with the backing of the third-placed candidate looks to be in a strong position to win the head-to-head match-up with challenger Kemal Kilicdaroglu.

NOT HAPPENING TODAY- The National Dialogue, which is taking a week off. The dialogue will resume sessions on Sunday, 4 June, according to a statement. The dialogue has been hosting four sessions every Sunday, Tuesday, and Thursday since it kicked off two weeks ago.

HAPPENING THIS WEEK-

IEF-IGU Ministerial Gas Forum: The International Energy Forum and the International Gas Union will hold its Ministerial Gas Forum on Monday, 29 May.

Deadline for 1Q financials: Listed companies have until Tuesday, 30 May, to report and publish their 1Q results.

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

MORNING MUST READ-

“Achieving genuine economic reform has become a matter of utmost priority”: That’s according to former deputy prime minister Ziad Bahaa Eldin, who calls on the government to get more ambitious with its reform agenda in an op-ed in the Financial Times on Thursday.

Looking to the future: Rather than talking about covid-19 and the war in Ukraine, Bahaa El Din urges policymakers to reassess some of the policies that have contributed to the crisis and focus on building a more sustainable economy driven by private sector-led exports.

More must be done: Welcoming the package of business-friendly reforms announced earlier this month, the former deputy PM calls on officials to go further. “For the message to be truly convincing, and to attract the attention of a skeptical community of international and local investors, a comprehensive economic reform programme must be adopted, declared and followed through,” he writes. “Only then will success stories become the norm and will Egypt’s abundant opportunities and potentials be realized.”

THE BIG STORY ABROAD-

Crisis averted: US President Joe Biden and House Speaker Kevin McCarthy last night reached an “agreement in principle” to raise the debt ceiling and avert a federal debt default. “We still have more work to do tonight to finish the writing of it,” the House speaker told reporters, adding that he expects the bill to be written today and a vote to take place on Wednesday. (Associated Press | Reuters | Bloomberg | Financial Times | New York Times | Washington Post | Wall Street Journal | CNBC)

WATCH THESE SPACES-

#1- We still don’t know if household electricity prices are rising come July:A final decision hasn’t yet been made regarding the potential increase in household electricity prices in July, Deputy Electricity Minister Ali Abdelfattah told MPs on Thursday. The current freeze on prices is due to expire at the beginning of the coming fiscal year on 1 July. Residential electricity bills had been set to rise by as much as 21% last year under government plans to restructure pricing and phase out electricity subsidies by 2025.

#2- We might have a competitor regional natural gas hub: Cyprus wants to accelerate building a pipeline to Israel’s natural gas fields under a plan that could see it become a key energy supplier to the rest of Europe, Bloomberg reported Friday. Having originally planned to lay a pipeline connecting the Eastern Mediterranean to Greece and Italy, Cyprus now plans to acquire its own LNG facilities where it can liquefy imported Israeli gas and export it to Europe, its energy minister told the business news outlet.

Why this matters: We’re currently the only country in the EastMed able to export LNG and in recent years have been positioning ourselves as the region’s key energy hub.

What’s next: Cyprus is holding a two-day workshop this week to discuss its plans for the project with potential stakeholders, includingTotalEnergies, Exxon Mobil, Eni and Shell — the oil and gas firms already working on projects in Cyprus.

#3- A USD 100 bn plan to help developing countries secure green finance is on the table: An intergovernmental summit in Paris next month is set to discuss a plan that would see the IMF and other multilateral development banks (MDBs) spend some USD 100 bn annually on currency guarantees to help developing countries secure climate finance, Reutersreports. The proposal is part of the Bridgetown Initiative — a plan to reform how rich nations extend development finance to developing countries — and will be discussed at a summit in Paris in June.

The mechanism: Under the plan, MDBs would compensate investors who purchase sustainability-linked bonds if the country involved devalues its currency. This would lower the risk premia of these bonds, enabling issuing countries to cut their interest rates. These guarantees would cover only green transition investments, including green bonds that finance environmentally friendly projects and blue bonds, which are ocean-focused.

FACT CHECK- The Cairo Court of Cassation has denied permitting real estate developers to increase their prices and push their deadlines, Akhbar El Youm reported. This was in response to local media reporting yesterday that the court had ruled in favor of an undisclosed real estate company increasing its prices and extending the implementation deadline of its project.

What happened: The decision was taken by a court in Alexandria for a specific case and is not a general rule issued by the Court of Cassation, Tarek Shoukry, head of the real estate division of the Federation of Egyptian Chambers of Commerce, told El Hekaya’s Amr Adib last night (watch, runtime: 13:02). The developer was suffering losses because of the 2016 devaluation and because of that the court allowed it to increase its prices and extend its delivery deadline by two years, he said.

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