**#1 New import tariffs have taken effect: Customs authorities at ports and airports across the country began yesterday to implement a decision signed off overnight Tuesday by President Abdel Fattah El Sisi to raise import tariffs everything from clothing to electronics and pet food, according to the Finance Ministry. The story is dominating headlines in the domestic press today.

More than 2k capital goods and raw materials will see duties rise out of a total of 5,791 items reviewed, Customs Authority chief El Sayed Negm noted, according to Reuters. The decision sets a 20% tariff on all imports by hotels and tourism businesses and raises duties on items including clothing, electronics, and pet food to 40%. Some categories of goods, including juices, saw duties jump to 60% from 20%. You’re also going to pay extra for having something repaired abroad: Send something out for maintenance or to have it fixed and you’ll be hit with a 10% levy.

Staple goods unaffected: The Finance Ministry was quick to note that staple goods are not impacted by the new duties — and that the decree reduced or eliminated tariffs other goods, including meds for chronic diseases and production inputs used by companies that assemble products domestically. The tariff changes also favour “greener” modes of transportation: Vehicles powered by natural gas will see duties fall 35%, while electric vehicles will be exempt from import duties.

The tariffs favour domestic manufacturers and will curb imports. “The amendments come as part of an effort to encourage local industry and urge citizens to forgo non-essential goods. They will help improve the state’s revenues,” said Radwa El Swaify, head of research at Pharos Securities Brokerage.

No WTO violation: The new tariffs are not in violation of any of Egypt’s trade agreements and were drafted with World Trade Organization policies and standards in mind, Finance Ministry customs affairs adviser Magdy Abdel Aziz tells Al Masry Al Youm. Moreover, the measures are in line with changes to the Harmonized System Code — a global standardized system of classifying traded goods to determine their customs duties — which underwent its regular five-year review by the World Customs Organization in 2017, according to Finance Minister Mohamed Maait.

Why now? The threat of outflows of hot money amid the EM Zombie Apocalypse has policymakers looking at ways to curb demand for FX, likely including leaving interest rates on hold (whereas earlier this year, the expectation was for further rate cuts). Add in a recent charge that the central bank is quietly guiding the exchange rate, and the rationale for the tariffs looks clear to us.

**#2 Higher yields on government bonds could be a plus, says RenCap’s Ahmed Badr: The higher demanded at government bond auctions could be read as a positive, our friend Renaissance Capital MENA CEO Ahmed Badr told Bloomberg TV in an interview on Tuesday. Allaying fears from the Finance Ministry, which cancelled two bond auctions over the past month on “unreasonably” higher than expected yields, Badr points out that if yields remain high this would bring portfolio investors back.

Will core inflation rising impact the CBE’s decision later in the month? Badr gives a strong call that it would not, with the central bank expected to maintain interest rates. Higher inflation was expected considering the impact of a strengthening USD on a net importing country and the subsidy cuts. It is actually advantageous for the CBE to keep interest rates marginally higher.

As for trade calls, Renaissance Capital likes infrastructure plays on the back of the interest given to it by the government, with companies such as Orascom Construction being undervalued. Badr also likes Qalaa Holdings for the expected turnaround in its finances that will take place when Egyptian Refining Company goes live. Bloomberg has posted only part of the interview, which you can catch here (watch, runtime: 3:02).

**#3 Is China calling in the currency-swap favor? The Chinese government is in talks with Egypt to base a number of key transactions between the two countries on the CNY. These include some of the high-profile loans for key projects signed during President Abdel Fattah El Sisi’s trip to Beijing earlier this month, Chinese ambassador to Cairo Song Aiguo said. The funding would be under the framework of the USD 2.65 bn currency swap with China, which Egypt signed in 2016 as part of the USD 5.7 bn funding required to secure a USD 12 bn extended fund facility from the IMF, he added. China is also currently discussing the possibility of allowing to ships to pay Suez Canal transit fees in CNY while allowing tourists visiting Egypt to use the Chinese currency. CBE Governor Tarek Amer had said last month that Egypt and China plan to renew the currency swap agreement.

**#4 EXCLUSIVE- JWT is off Egypt’s tourism account next week: The government does not intend to renew its contract with JWT to promote tourism in Egypt, which set to expire on Monday, 17 September, a government source told Enterprise. The Tourism Promotion Authority (TPA) will instead sign a contract with Egyptian Media Group subsidiary Synergy. Unlike JWT, Synergy does not have operations outside Egypt, but will instead sub-contract work to in-market agencies, the source added. The source did not give an explanation as to why the JWT contract was not renewed.

We broke up with them, says JWT: A top source from JWT told us that the global agency itself was not interested in renewing the contract. The source did not explain the move, except to say that the TPA was undergoing a restructuring and as a result is heading in another direction.

No love lost: JWT and the Tourism Ministry have been embroiled in a public spat over payment allegedly owed to JWT over the past year. High-profile JWT boss Hany Shoukry had said last year that the company hadn’t been paid in full for work completed.

For what it’s worth, we rather liked the #thisisEgypt campaign. (As did Lamees, readers may recall. Maybe she’ll be back on air in time to talk about whatever Synergy does…)

**#5 M&A WATCH- CIRA to acquire additional 24% stake in Al Saeed Education Services: Leading private sector education provider Cairo Investment and Real Estate Development (CIRA) announced yesterday that it intends to acquire an additional 24% stake in its subsidiary Al Saeed Education Services for EGP 10 mn, according to a filing to the EGX (pdf). The company will buy the shares from shareholder Al Saeed Investments in two transactions worth EGP 5 mn each, bringing its total holding of Al Saeed to 99% from 75%. CIRA, which announced its intention to go public late last month, is expected to begin trading on the EGX as of 1 October. The company expects to price its shares at EGP 5.45-6.30.

**#6 INVESTMENT WATCH- Egyptian, regional investors launch EGP 200 mn international school: UAE-based education services outfit Africa Crest Education (ACE) has signed the final contracts with Capital Group Properties to begin building a EGP 200 mn branch of the international school Cadmus within its integrated development Alburouj. For the project, ACE, which will own 35% of the school, will be partnering up with SABIS educational group (which will own 30%), as well as Redcon Construction Chairman Tarek El Gamal and Egyptian International Consulting Group (EICG) Chairman Mostafa El Shibini, who will split the remaining stake between them, El Shibini tells Al Mal in an interview.

What about funding? The main shareholders will provide EGP 100 mn for the project and talks are currently ongoing with Egyptian and Emirati banks to secure another EGP 100 mn through a medium-term loan, according to El Shibini, who expects funding to be in place before the end of the year. The school, on which construction has already started, is set to open with the start of the 2019 academic year and targets the mid-income segment.

Looking ahead, Africa Crest plans to establish five similar schools across Egypt over the next few years, either through new developments or the acquisition of existing facilities. Dubai Investments PJSC had pledged USD 20 mn in new investments to ACE earlier this year for the development of SABIS-operated schools in African countries, including Egypt. SABIS, which is one of the founders of ACE, runs the Choueifat schools in the region.

CABINET WATCH- The Madbouly Cabinet discussed the Finance Ministry’s proposed debt control strategy at its weekly meeting yesterday, according to a Cabinet statement. The statement did not delve into specifics on the plan or announce a timeline for it except to say that it is currently being finalized and will be out soon. The meeting also looked into preparations for the FY2018-19 school year, which will see the rollout of the new K-12 education system and the reform of the Thanaweya Amma graduation exam system. Healthcare strategy, particularly cutting down wait times for government operating rooms and a Hepatitis C survey, was also on the agenda.

Factories to get a national ID number? Following the meeting, the Supply Ministry’s Internal Trade Development Authority signed an agreement with the Tax Authority to begin implementing a national ID system for all factories and businesses, according to a cabinet statement. While there was little by way of explanation on that this entails, we know that this system had been in the works for some time, and a facility’s national ID would include more information than is present in the business’ license or its commercial registry. Decisions taken during the meeting include:

• Approving amendments to the role and responsibility of the Vice Ministers of Finance, the statement read without elaborating.
• Mandating the Nuclear Materials Authority and the Egyptian Black Sand Company to explore for black sand deposits in Egypt.

Ocean Alliance moves ports on better fees: Ocean Alliance has launched a new service through the West Port Said Port, Suez Canal Authority boss Mohab Mamish said yesterday, Al Mal reports. The new service line will see the group — which includes CMA CGM Group, APL, Evergreen, and China’s COSCO Shipping — launch 10 new ships that are set to make 55 annual voyages. The move comes less than a month after the international shipping alliance ceased operations at East Port Said to protest high fees. An alliance of Yang Ming, Hapag-Lloyd, K Line, Mitsui O.S.K. Lines, and the NYK Group retreated from East Port Said last year for the same reason, after the government hiked fees by c. 100%. Officials had promised to try and repeal the hike.

President Abdel Fattah El Sisi also ordered at a meeting with Mameesh that Egypt’s port authorities revisit port fees to make them more competitive, according to an Ittihadiya statement. He also called for a plan to upgrade port facilities in East Port Said.

MOVES- Citi chief Middle East economist Farouk Soussa (Linkedin) has jumped ship to Goldman Sachs, where he is now MENA economist. Soussa joined Citi in 2010 from Standard & Poor’s.

**#7 Did state news agency MENA’s website get hacked by Turkey? A Turkish group reportedly hacked the website of Egypt’s state news agency MENA on Tuesday in protest of death sentences handed down to 75 people over the 2013 Rabaa Adawiya sit-in, Anadolu Agency reports. The hackers reportedly posted on MENA’s landing page a picture of a man who was shot during the sit-in. The Turkish newswire claims that MENA Editor-in-Chief Ali Hasan confirmed the hack to local news website Masrawy, but that the article has since been taken down from Masrawy’s website.

CORRECTION- In our piece yesterday about overhead transmission lines at MNHD’s Taj City, we incorrectly reported that the lines were being installed by a military-run company. The lines are in fact being buried outside Taj City’s parameter and the work will take 4-6 months to complete. We apologize for the error and have corrected the story on our website here.

** WE’RE HIRING: We’re looking for smart, talented, and seasoned journalists and editors to join our team at Enterprise, which produces the newsletter you’re reading right now. We’re looking for people who can work on this product and help us launch exciting new stuff. Applicants should have serious English-language writing chops, a strong interest — and preferably some professional experience — in business journalism, and solid analytical skills. The ideal candidate for us is a native-level-writer of English with the ability to read and understand Arabic. We offer the chance to work in a unique and casual work environment that promises to be intellectually challenging and rewarding. If you’re interested, please submit your CV along with 2-3 writing samples and a solid cover letter telling us a bit about who you are and why you’re a good fit for our team. Please direct your applications to jobs@enterprisemea.com.