THIS AFTERNOON: Tourism + finance ministries to launch subsidized financing initiatives for hospitality investors

Good afternoon, folks, and happy Sunday. It’s a relatively slow start to the week as far as the local news cycle goes, but we have the rundown on the distribution and concentration of wealth across African countries — including the number of m’naires and b’naires in Egypt last year.

THE BIG STORY TODAY

Subsidized financing for new hotel rooms: The Tourism and Finance Ministries have reportedly reached an agreement to launch a subsidized financing initiative that offers hospitality investors looking to build new hotel rooms loans with a 12% interest rate, Al Mal reports, citing sources it said have knowledge of the matter.

The rationale: Finance Minister Mohamed Maait last week told the House of Representatives’ budget committee that the current hotel room count isn’t sufficient to welcome more tourists into the country. And because the sector is one of the country’s stronger and faster FX magnets, the ministry came up with the subsidized financing initiative to encourage investors to invest in hospitality expansions and add more hotel rooms.

What’s next: The mechanisms under which the initiative will be implemented will be drawn up by the finance and tourism ministries. The sources expect it to reach the cabinet for discussion, without mentioning a specific date.

Foreign investors are falling in love with Egypt again… Foreign investors we speak with (debt, equity, and strategic alike) have a growing appetite for Egypt. They’re buying into local debt, eyeing promising shares, and committing bns of USD to both new ventures here and the growth of their existing businesses. They like the Egypt story that’s taking shape after the float of the EGP, and our competitive advantages are clear to many of them: We’re a massive consumer opportunity and the regional export hub of tomorrow.

…but here at home, our community is in a rut. The enthusiasm gap between domestic business leaders and global investors is stark.

We’d all do well to remember: It’s a chicken-and-egg kind of thing. Foreign strategic investors will be reluctant to commit capital here until they see Egyptian businesses leading the way.

The Enterprise Optimism Forum 2024 will do exactly what it says on the tin: Spark conversations about a future that we think is much brighter than so many in our community feel right now. Think of it as much-needed shock therapy combined with an early, actionable roadmap for those of us who are “long Egypt.”

We’ll be talking with you about the agenda over the coming couple of weeks.It features speakers from Egypt and abroad who are future-proofing their businesses and angling to capture tomorrow’s opportunities — and who aren’t afraid to answer some tough questions.

*** Interested in attending? Tap or click here to let us know. Seating is limited.

THE BIG STORY ABROAD

No single story has captured the imagination of the international press today. Among the stories on the front pages:Investment firm Elliott Management has reportedly gone all-in on Sumitomo, a Buffet-favored trading house based in Japan, investing JPY tens of bns. Meanwhile, World Economic Forum President Borge Brende has been urging the application of certain economic measures without which he claims the global economy will face low growth for the coming decade. Elsewhere, international development sharks are circling the ruins of Gaza — which has been under attack by Israel for almost seven months, resulting in the killing of 34k Palestinians — to plan for the “economic development” of the territory. They plan to rebuild Gaza as a “Mediterranean commercial hub.”(Reuters | Bloomberg | CNBC | NYT)

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

• IMF greenlights expedited access to funding unlocked by upcoming third review: Egypt could receive USD 820 mn from the International Monetary Fund from June 15 onwards — shortly following the Fund’s third review of our loan program in the same month — after the Fund agreed to “to better align access with review cycles under the program.”
• Act Financial gets the green light to list on the EGX: Investment management firm Act Financial is closing in on its long-awaited initial public offering on the EGX and expects to start trading its shares within two months, after obtaining approval from the EGX.
• Ras El Hekma is getting a freezone, tourist port: Cabinet last week approved decisions to set up a freezone, investment zone, and international tourist port in the North Coast’s Ras El Hekma.

*** It’s Inside Industry day —your weekly briefing of all things industrial in Egypt. Inside Industry focuses each Sunday on what it takes to turn Egypt into a manufacturing and export powerhouse, ranging from initial investment and planning to product distribution, through to land allocation to industrial processes, supply chain management, labor, automation and technology, inputs and exports, regulation and policy.

In today’s issue: After the Madbouly government unveiled its spending plans for the upcoming fiscal year to the House of Representatives, we take a look at what the FY 2024-25 state budget has planned for local industry, which is expected to contribute 15% of GDP.

☀️ TOMORROW’S WEATHER- The mercury is going to climb to a high of 26°C and drop to a low of 18°C, according to our favorite weather app.