Good morning, folks. We have another brisk issue for you this morning to wrap up a particularly quiet week on the business front.

WATCH THIS SPACE-

#1- SMART POLICY- Egypt, South Africa look to collaborate on medical tourism projects: The Egypt Healthcare Authority is looking into creating an alliance with one of South Africa’s largest hospitals to offer medical tourism packages in Egypt and South Africa, as the two countries look to become medical tourism hubs to capture market share from India and Europe, according to a statement from the authority.

This is important: As we’ve recently been grumbling, we missed the boat as a nation by not taking seriously the potential to create a meaningful manufacturing industry with a focused program to turn Egypt into a magnet for FDI. It’s still not too late to start, but we need to move the needle in the meantime, and the export of services is a smart way forward.

HSBC and, recently, Mashreq have shown that it’s possible to sell sophisticated banking services. Microsoft, Vodafone, and others have been doing high-end call center support here, as have specialized players such as Concentrix.

Egypt has great hospitals and even better physicians. Becoming a continental hub for medical tourism is a smart move and deserves sustained, concentrated focus from policymakers.

#2- The richest Sawiris rethinks his future: Nassef Sawiris is considering overhauling his Dutch-listed chemicals and fertilizer group OCI GlobaI, with one of the options being turning the empire into a cash-shell company pursuing acquisitions in new industries, he told the Financial Times. OCI has obtained some USD 7 bn from asset sales since December. “We’re evaluating what we want to do, not just with the money [from the asset sales] but as a team, and maybe OCI stays with a piece or two pieces and it becomes a cashcow, and becomes a machine for further investment. We’re quite open-minded,” Egypt’s richest man told the FT.

Where did the USD 7 bn come from? OCI Global in December inked a binding agreement to sell its wholly-owned subsidiary Iowa Fertilizer Company (IFCo) to Koch Ag & Energy Solutions for USD 3.6 bn. This came shortly after it announced that it would offload its entire 50% stake in ammonia and urea producer Fertiglobe to Abu Dhabi’s oil giant Adnoc for USD 3.62 bn.

RED SEA WATCH-

Egypt has lost some USD 508 mn in Suez Canal revenues due to ongoing Red Sea disruptions, according to estimates from BloombergIntelligence. The canal — a vital source of much-needed foreign currency for cash-strapped Egypt — saw its receipts fall 44% y-o-y in January, as the world’s largest shipping firms divert around the Cape of Good Hope to avoid Houthi attacks.

We’re not past the worst of it: Maersk believes that reroutes away from Yemen could last well into the second half of the year, advising customers to ensure they have “a longer overall transit time build into their supply chain,” Maersk North America’s Charles van der Steene told CNBC. After suspending all Red Sea transit on 26 January, the company has upped the capacity of its vessels to compensate for longer arrival times as it makes the longer journey around Africa.

Another firm steering clear: US-listed commodity shipping firm Star Bulk Carriers has become the latest to pause all Red Sea transit after two of its vessels were subject to Houthi attacks last week, Bloomberg reported.

HAPPENING TODAY-

Lula + El Sisi: Brazilian President Luiz Inácio Lula da Silva will meet with President Abdel Fattah El Sisi today, on day two of his first official visit to the country since taking office in January, according to a statement from the Brazilian president’s office. The two heads of states will make a statement to the press following their meeting.

Beef may be on the menu: Egypt is expected to soon approve new imports of Brazilian beef, a subsequent statement from the Brazilian president’s office said. The statement also highlighted Egypt as one of its strongest trading partners in Africa, praised its role in repatriating its citizens from Gaza, and added that a new air route between Cairo and Sao Paulo will be on the agenda.

Next stop, Ethiopia: Lula will leave one Brics country for another as he heads to Addis Ababa later today to take part in an African Union meeting with heads of states.

HAPPENING THIS WEEK-

The Akhbar Al Youm Economic Conference is taking place this weekend, under the title “The Egyptian Economy … Challenges and Priorities,” bringing together government officials, economic experts, and investors. The conference will be held at Al Masa Hotel Nasr City on Saturday at 9am.

HAPPENING NEXT WEEK-

The Egypt Energy Show is kicking off on Monday, 19 February at Egypt International Exhibition Center, New Cairo. The three-day event will gather 35k energy industry professionals and host over 80 conferences on energy transition and sustainable production.

PSA- Another cigarette price hike: Tobacco distributor Al Mansour International Distribution Company has raised the price of its products between EGP 2-10, Al Shorouk wrote. A pack of Davidoff now goes for EGP 84, Time rose to EGP 44 a pack, and Manchester to EGP 39.

ICYMI- Philip Morris hiked the price of cigarettes by up to 18% last week, with a pack of Merit rising 15% to EGP 85, while the L&M brand will now go for EGP 59 a pack, up 18%.

DATA POINTS-

#1- Funding for healthtech in Egypt jumped 137% y-o-y in 2023 to USD 36 mn, on the back of investments in pharma delivery startups Yodawy (USD 16 mn), Chefaa (USD 5.3 mn), and our friends at primary care company Dawi Clinics (USD 8 mn), according to Salient’s 2023 RoundUp: Investments in African HealthTech report.

#2- Demand for LNG is expected to skyrocket by 2040: Global demand for liquefied natural gas is expected to increase by over 50% over the next 15 years on the back of Asia increasingly ditching coal for gas, according to Shell’s annual LNG outlook report (pdf). The oil and gas giant expects demand to reach 625-685 mn tons in 2040, from 404 mn tons in 2023.

#3- Egypt needs USD 100 mn every week for animal feed imports, Agriculture Minister El Sayed El Quseir said.

WAR WATCH-

Ceasefire talks once again collapse: Israel has withdrawn from negotiations and will not return to the negotiation table without “a change in Hamas’ positions,” after Prime Minister Benjamin Netanyahu dismissed Hamas’ ceasefire proposal as “delusional,” Bloomberg reported.

ICYMI-An Israeli delegation was in Cairo earlier this week to participate in ceasefire negotiations alongside US, Qatari, and Egyptians officials. They headed back to Tel Aviv to brief leaders on the talks and were expected to head back to Cairo yesterday to continue discussions.

THE BIG STORY ABROAD-

It’s all politics, all the time in the pages of the foreign press. Let’s start in Washington, where Politico and the New York Times report that Moscow may have made significant progress on the development of an anti-satellite nuclear weapon. The weapon has not yet been deployed, the Times writes.

MEANWHILE- The Wall Street Journal and Bloomberg are leading with Israel pulling out of Gaza peace talks. The Financial Times and the New York Times are looking at European defense policy in the wake of Republican presidential challenger Donald Trump’s remarks about not defending Nato allies that fail to hit their defense spending targets.

Oh, and Vladimir Putin would prefer that Joe Biden be elected president of the United States, calling the sitting president “more experienced and predictable.”

MORNING MUST-READ-

MORE INTERESTING- The Financial Times does a great job of arguing that our AI moment is becoming just a little bit frothy. No, it’s not a bubble. In the long run, AI will change how we live, work, and do business. But when Sam Altman talks (unironically) about raising USD 7 tn — more than the combined GDP of the UK and France, Inside Business columnist June Yoon writes — it may well be time for a reality check.

Go read AI hype has echoes of the telecoms boom and bust.

And while you’re at it: Go check out Early adopters of Microsoft’s AI bot wonder if it’s worth the money. Businesses everywhere are working out what AI tools mean to them, but is it really time to spend USD 30 per person, per month to get access to a bot that amounts to a not-too-bright intern that lies to you with great confidence (to steal from Benedict Evans and Nilay Patel in one sentence)?

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