CBE to keep rates unchanged on Thursday -Enterprise poll

Monday, 20 May 2024

CBE to keep rates unchanged on Thursday -Enterprise poll

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Today at a glance

M&A WATCH

UAE’s Electra wants up to 25% of Elsewedy Electric.

Privatization

Private sector could soon manage and operate public hospitals.

POLL

CBE to leave interest rates unchanged on Thursday.

What We're Tracking Today

Basata could make its EGX debut next year.

BUDGET WATCH

This fiscal year’s budget could get a top up.

What We're Tracking Today

Search and rescue operations are underway to find Iranian President.

Also on our Radar

GB Logistics launches bonded warehouse services.

PLANET FINANCE

Latest inflation data sends USD rally into reverse.

BLACKBOARD

Answering the age-old question: British or American.

What We're Tracking Today

EGX-listed Qalaa Holding will offer shareholders more clarity on its debt buyback soon

Good morning, folks. We hope you’re staying cool and hydrated as the heat wave continues in Cairo. It is shaping up to be another busy day, so let’s jump right into it.

You can pay in EGP after all: Market watchers welcomed news yesterday that Qalaa Holdings shareholders interested in buying into its debt purchase transaction will be able to pay in EGP rather than having to transfer funds abroad in USD, as was originally the case. The Financial Regulatory Authority made the announcement (pdf) yesterday.

The background: Shareholders looking to participate in the buyback — a series of transactions that will see Qalaa retire some USD 430 mn in foreign-currency debt — were originally required to pay their share of the transaction in foreign currency in a UAE bank account.

Additional clarity for the shareholders: Qalaa Holdings plans to publish a report detailing its debt buyback plan, after the FRA and company ordinary general assembly approve the report’s content, the company said in an EGX disclosure (pdf). The Authority has asked Qalaa to “immediately” disclose additional information regarding participation in the buyback process. Shareholders of Citadel Capital Partners — the vehicle through which the company’s founders and top executives own their equity — will not vote on the matter at Qalaa’s ordinary general assembly, scheduled for 30 May.

Want the full story? We sat down with Qalaa founder and chairman Ahmed Heikal last week.

WATCH THIS SPACE-

#1– Basata to head to the EGX in 2025? Private equity firmBPE Partners is planning on offering around a 25% stake in its fintech subsidiary Basata Holding for Financial Investments on the EGX within 18 months, BPE co-founder Aladdin Saba told Al Mal. The move comes as part of Basta’s plan to double its capital to EGP 1.4 bn.

Basata? Initially dubbed Ebtikar, Basata was established as a JV between B Investments, BPE Partners, and MM Group for Industry and International Trade in 2017. Basata’s e-payment arm provides point-of-sale machines to merchants, has its own app — dubbed Basata Pay — for consumers to pay bills and make other transactions remotely.

#2- Work on Ras El Hekma to kick off sooner than expected: ADQ plans to break ground on infrastructure and construction work for its Ras El Hekma project before the end of the year, Housing Minister Assem El Gazzar told Asharq Business, explaining that ADQ has already acquired the the necessary permissions and licenses. ADQ was initially expected to break ground on the project early next year.

ICYMI: Egypt expects to transfer the land for the project to the newly established Ras El Hekma for Urban Development Project Company “in the coming days,” cabinet spokesman Mohamed El Homsani said earlier this week.

#3- ACUD pushes back IPO advisor selection: The Administrative Capital for Urban Development (ACUD) will postpone selecting an international financial advisor for its planned IPO until 4Q 2024, chairman Khaled Abbas told Asharq Business. ACUD was aiming to offer 5-10% of its shares on the EGX in 2Q 2024.

#4- The Housing Ministry is aiming to sell some USD 6 bn in land and housing units to foreigners and Egyptian expats this year, Deputy Housing Minister for Technical Affairs Abdul Khaleq Ibrahim told Asharq Business. The ministry will set up a new company to manage and advertise real estate assets to buyers abroad. The new entity will work with the Central Bank of Egypt and the Finance Ministry, and will aim to sell 25k residential and commercial units during its first phase, Ibrahim said, without providing a specific timeline.

Also on the cards: Egypt is considering setting up real estate funds, which will invest in the central business districts of the new capital, New Alamein, and Ras El Hekma, Ibrahim added.

Want more? We delved into Egypt’s potential to fast track real estate exports in a recent Hardhat. Read the piece here.

FROM THE RUMOR MILL-

TE no longer looking to sell stake Vodafone Egypt? State-run Telecom Egypt has reportedly backed out of its plan to sell a portion of its 45% stake in Vodafone Egypt, after receiving underwhelming offers, Asharq Business reports, citing two sources it says are in the know. The offers failed to “meet the aspirations” of Telecom Egypt’s shareholders who had received EGP 2.1 in dividends from their Vodafone stake last year and are on track to get EGP 3 bn in 2024, one of the sources explained. And while TE didn’t confirm or deny the news of backing out of the sale, it said that it hadn’t received any official offers, according to an EGX disclosure (pdf).

A turn of events: Telecom Egypt reportedly resumed negotiations with the Qatar Investment Authority in March to acquire a portion of its stake in Vodafone Egypt. The Qatari fund has reportedly been eyeing TE’s share in Vodafone Egypt since 2022, but talks have failed to progress after the two sides failed to reach an agreement over the stake size.

PSA-

WEATHER- It’s another hot day in Cairo, with a high of 41°C and a low of 28°C, according to our favorite weather app.

It’s a lot cooler in Alexandria, with a high of 33°C and a low of 24°C.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Want to subscribe? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

HAPPENING TODAY-

#1- Shoukry in Greece: Foreign Minister Sameh Shoukry is in Athens today to discuss Egyptian-Greece relations with his Greek counterparts, a statement from the ministry said. The minister will also meet with Greece’s Copelouzos Group to follow up on a project to link the power grids of Egypt and Greece — dubbed GREGY — that will enable exports of Egyptian renewable energy into Europe.

#2- All about green industrial parks: The Trade Ministry and the UN Industrial Development Organization (UNIDO) are hosting a Global Eco-Industrial Parks Program-affiliated forum at Cairo’s Dusit Thani Hotel, UNIDO said in a press release (pdf ). The forum aims to support Egypt’s transition to eco-industrial parks and promote sustainable industrial development. It will include sessions on financing, an exhibition area, and chances for professionals to network.

DATA POINT-

Road accident fatalities in the country dropped 24.5% y-o-y in 2023 to 5.9k, according to figures (pdf) from state statistics agency Capmas. Although fatalities fell, road accident injuries rose 26.8% y-o-y to 71k during the year.

ICYMI- Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we looked at how the country’s first specialized industrial investment fund set to launch later this month is planning to give local SMEs a boost. Check out the story here.

THE BIG STORY ABROAD-

One story has captured the attention of the foreign press this morning: Search and rescue operations are underway to find Iranian President Ibrahim Raisi and Foreign Minister Hossein Amirabdollahian after their helicopter crashed in the country’s northwest. Their lives are “at risk,” according to Iran’s state news agency, Irna.

The search is being slowed by poor weather, a contributing factor in the crash. The two were returning from a visit to the border with Azerbaijan, where they inaugurated a dam, media reports suggest.

Business as usual? Iranian Supreme Leader Ayatollah Ali Khamenei says there will be “no disruption to state affairs,” Reuters reports.

The story is everywhere: (CNBC | Financial Times | Bloomberg | AP | Reuters)

OTHER STORIES on which you’ll want to keep any eye as the week unfolds:

We could see a verdict as early as this week in Donald Trump’s hush-money trial in New York;
Boeing will send two astronauts to the space station tomorrow in the first crew test of its Starliner capsule;
G7 finance ministers and central bankers will meet on Thursday in Italy to chew over the state of the global economy.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: We explore the strengths and weaknesses of the British and US education systems in Egyptian schools.

Tags:

Qalaa Holdings What We're Tracking Today

Discover your dream getaway with our signature collection of vacation homes and let our expert team craft your perfect holiday experience.

M&A WATCH

UAE’s Electra eyes up to 24.5% of Elsewedy Electric

Elsewedy Electric could welcome a new shareholder: UAE-based Electra Investment Holding has submitted a voluntary offer for up to 24.5% of EGX-listed Elsewedy Electric at USD 1.05 a pop, according to a statement (pdf) from the Financial Regulatory Authority (FRA). The buyer wants to acquire at least 15% of Elsewedy Electric — which is over 76% collectively owned by the Elsewedy family — to execute the offer. The FRA is currently studying the offer.

This would be a big ticket acquisition: If Electra succeeds in getting 24.5% of the company at USD 1.05 a pop — a premium of c. 11% to Elsewedy Electric’s share price of EGP 44.41 at yesterday’s close — the transaction would be valued at USD 558.1 mn (EGP 26.2 bn), according to our math.

Remember: Elsewedy Electric finished 2023 on a high note after net income jumped 87% y-o-y to EGP 10.1 bn. The company's revenues also jumped 65% y-o-y to EGP 152.2 bn during the same period.

Advisors: EFG Hermes is Electra’s sole financial advisor for the transaction, an informed source told Enterprise.

Market reax: Elsewedy Electric’s shares jumped 20.0% to EGP 44.41 a share at the end of trading yesterday.

Tags:

EFG Hermes Elsewedy Electric M&A Watch

POLL

Egypt’s central bank expected to leave interest rates unchanged in May

The Central Bank of Egypt (CBE) is expected to leave interest rates unchanged when it meets on Thursday as inflation cools, FX inflows pick up, and the USD / EGP exchange rate stabilizes, according to our interest rate poll. All 11 of the analysts and economists we surveyed expect the Monetary Policy Committee (MPC) to hold rates steady.

Where rates currently stand: The overnight deposit rate stands at 27.25%, the overnight lending rate at 28.25%, and the main operation and disc. rates at 27.75%. The MPC delivered a jumbo 600 bps rate hike following a surprise monetary policy meeting in March, which coincided with the float of the EGP and a bigger package from the IMF.

The rationale: Things have stabilized post jumbo hike and float. The USD / EGP exchange rate is stable, FX liquidity has returned to the official banking system, and net foreign reserves jumped to their highest level in two years, HC Securities’ Heba Mounir told Enterprise.

The EGP will continue to strengthen against the USD, mainly on the back of the Ras El Hekma funds landing in the state’s coffers, economist Mona Bedeir told us. “Although this trend will not continue because a big chunk of our FX inflows will be used to cover financing needs, be it for debt servicing, balance of payments, or to boost FX in banks,” she continued.

It’s still too early to scream rate cuts: “It is too early to [cut rates], as it’s only been two months since the float of the EGP and there are still some inflationary pressures on the horizon, especially with a new hike in fuel prices likely in June,” EFG Hermes chief economist Mohamed Abu Basha told Enterprise. He expects the MPC to start cutting rates in 4Q 2024, when inflation cools to 23-24%.

Most are penciling rate cuts in 2H: Ahmed Hafez, head of Research at Beltone Holding, is “no longer ruling out a 2H 24 rate cut,” adding that “there could be a window to kick-start monetary easing on 5 September.” Zilla Capital’s Aya Zoheir expects the central bank to start cutting rates between the end of 2024 and the beginning of 2025, “after ensuring inflation is under control.”

Cutting rates prematurely will hurt the EGP: Cutting rates now will weaken the EGP against the greenback, which will in turn push inflation higher. It will also trigger FX outflows, IBIS Consultancy economist Ali Metwally told us.

It’s all about inflation: “We expect inflation to continue its deceleration path, to possibly reach CBE target in 2H 2025. Hence, we believe the CBE is unlikely to start the easing cycle before 4Q 2024,” CI Capital’s Sara Saada told Enterprise. The central bank’s average inflation target is 7% (±2%) by 4Q 2024 and 5% (±2%) by 4Q 2026.

Remember: Inflation cooled for the second consecutive month in April, recording 32.5% down from 33.3% the month before.

Regional issues to bear in mind: “We expect a gradual appreciation [of the EGP], but that will remain limited as long as the geopolitical impact on the Suez Canal and other balance of payment revenues remain in place,” Saada said.

All eyes on the Fed: “We won’t see a rate cut before the US Federal Reserve starts reversing its aggressive monetary tightening policy,” Metwally said. With potential interest rate cuts on the Fed’s cards, Egypt may not need to keep its own rates high as it will negate the interest rate differential.

ICYMI- The Fed has left interest rates at their current 22-year high of 5.25-5.5% for the past few policy meetings, but traders are hopeful that cuts are coming this year.

Tags:

Central Bank of Egypt economy foreign exchange inflation interest rates POLL

Privatization

Egypt’s House gave preliminary approval to bill allowing private investors to manage public health facilities

The House greenlights hospital privatization bill: The House gave preliminary approval to a new bill that will permit the private sector to manage and operate public hospitals and healthcare facilities in Egypt.

The exception: The bill will not include medical facilities offering health services key to national security or basic healthcare and birth control units and centers as well as facilities operating blood and plasma collection.

Backing the bill: Private sector involvement in public health will improve the services offered to citizens, head of the Social Solidarity Committee Abdel Hadi Al Qasabi said. Meanwhile, Health Minister Khaled Abdel Ghaffar said that the bill is in line with the government’s strategy to attract the private sector into all areas of the economy.

Not everyone is onboard: The bill received some blowback from some MPs including Atef El Meghawry and Ihab Mansour, who rejected the bill on the grounds that the move will make healthcare too expensive for ordinary citizens. “When the private sector acquires the right to manage public hospitals it will discriminate among citizens depending on who can pay and who can’t, this goes against the constitution,” Mansour said.

The bill was also rebuffed by the Doctors’ Syndicate: Local and foreign investors have the right to build new private hospitals in Egypt but should not be permitted to manage existing government or public hospitals that offer services to low-income citizens, head of the Medical Syndicate Osama Abdel Hay told the House. “The bill will give private investors the right to raise the price of healthcare services without a limit, not to mention that the bill will negatively impact the lives of 75% of doctors and nurses who are working with Health Ministry affiliated hospitals,” he added.

What to expect: Foreign medical staff will not be allowed to exceed 25% of all total staff members in licensed healthcare facilities under the bill.

What’s next? The bill will be up for a final vote when the House meets today.

Tags:

healthcare House of Representatives privatization watch

BUDGET WATCH

This fiscal year’s budget could get a top up

Gov’t could have more to spend from: The House Budget Committee approved a government-drafted bill that unlocks some EGP 320 bn, which would help the government increase spending on social support programs, reduce the impact of higher interest rates, support the float of the EGP, and manage rising wheat and oil prices, Finance Minister Mohamed Maait told the House.

Where will it come from? The additional funds will come from proceeds from the USD 35 bn Ras El Hekma agreement, Maait said. “The government will not need to borrow the amount of the new allocation,” he told the House.

Remember: This government has been running on a tight budget after the Madbouly cabinet approved a decision slashing allocations for investment.

The fiscal year ends on 30 June, after that the next fiscal year kicks off with a new budget.

Tags:

budget watch economy

EARNINGS WATCH

Raya CX more than doubles its net income y-o-y in 1Q

Raya CX doubles it net income: Raya Customer Experience (Raya CX) saw its net income more than double to EGP 109.7 mn in 1Q 2024, rising 143.7% y-o-y, the company said in its latest earnings release (pdf). The company’s top line also climbed 40.9% y-o-y to EGP 625.4 mn during the same period.

Driving the growth: The company’s business process outsourcing continued to be the primary contributor of growth in the quarter, contributing EGP 343.1 mn and accounting for 54.9% of total revenues for the quarter. The company’s hosting business recorded EGP 183.9 mn (29.5% of total revenue), while its insourcing business recorded EGP 98.4 mn (15.7%), according to the release.

Hard currency revenue streams continued to pay off: Offshore revenues denominated in USD recorded nearly EGP 479 mn, accounting for 76.6% of the firm’s total revenue — up from 69.3% in the same quarter last year. The firm’s FX revenues has put the company in an “advantageous position to mitigate the impact of the recent volatility and devaluation of the EGP.”

What’s next? “We are pushing forward with our global expansion and diversification plans. Growing our operations and strengthening our presence as a key player in the European market remains a top priority. Our goal is to expand the business beyond its current revenue contribution and to attract clients from other Western markets,” Raya CX CEO Alaa El Khishen said.

REVENUE GROWTH FOR VODAFONE EGYPT-

Vodafone Egypt recorded revenues of EGP 55.4 bn during the financial year ending March 2024, a 37.2% y-o-y increase, the company said in a statement (pdf ). The company has invested some EGP 7 bn over its financial year, it said, without providing further detail.

Vodafone Cash saw 52.1% y-o-y growth during the year to record 8.2 mn active users, who collectively made transactions worth EGP 1 tn over the past year.

MOPCO NEARLY DOUBLES NET INCOME IN 1Q 2024

Misr Fertilizer Production Company’s (Mopco) net income after tax rose 95% y-o-y to EGP 7.6 bn in the first quarter of the year, the fertilizer giant said in its latest financial statement (pdf). The company’s sales grew220% y-o-y to EGP 4.8 bn during the same period.

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NEVER WORKED IN INVESTOR RELATIONS BEFORE? We have the Enterprise Advisory Development Program. The two-month program will see full-time, paid participants take part in workshops and lectures from veteran investor relations and advisory professionals, while also applying their knowledge in a practical setting. Those who successfully complete the program will be offered full-time positions on staff for a chance to work in a flexible and supportive — but still fast-paced — work environment that eschews micromanagement and rewards good work. Enterprise Advisory offers the chance to build a network of high-ranking individuals across some of the largest and most influential companies in the region through direct exposure to clients.

During the program, you’ll learn:

Finance for non-finance people;
How to analyze businesses, their business models, their strategic advantages, and their strategies;
How to take that information and then tell an audience of investors, journalists, and analysts a compelling and well-developed story;
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Career switchers are very welcome.

Apply directly to jobs@enterprisemea.com and mention “advisory development program” in your subject line.

Tags:

earnings watch Mopco Raya CX Raya Holding Vodafone Egypt

LAST NIGHT’S TALK SHOWS

Egyptian talk shows cover the crash of a Helicopter carrying Iranian president

All eyes on Iran: The nation’s talking heads were abuzz with the news of the crash of a helicopter carrying Iranian President Ibrahim Raisi last night. Talk shows touched on uncertainty surrounding the fate of Raisi, the cause of the accident, and the ongoing rescue efforts, El Hekaya (watch, runtime: 20:14), Kelma Akhira (watch, runtime: 6:58) and Masa’a DMC (watch, runtime: 1:20).

ALSO ON THE AIRWAVES- Zamalek is African Confederation Cup champion: Zamalek Football Club was crowned champion of the African Confederation Cup for the second time in its history on Sunday, after defeating Morocco’s RS Berkane 1-0. Talk shows had extensive coverage of the win, including Kelma Akhira (watch, runti me: 34:45), El Hekaya (watch, runtime: 13:08) and Masa’a DMC (watch, runtime: 1:16).

Tags:

Iran LAST NIGHT’S TALK SHOWS sports

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EGYPT IN THE NEWS

Scientists think they may have answered an age-old question about the pyramids

Egypt’s pyramids are still catching the attention of the international press thousands of years after their construction, with a recently published study in Nature arguing that 31 of the country’s ancient monuments were built with the aid of a now disappeared branch of the Nile to transport heavy stone blocks for their construction.

Tags:

Egyptology

Also on our Radar

GB Logistics launches bonded warehouse services

LOGISTICS-

GB Logistics has launched a bonded warehouse services at its facility in Sadat City, according to a statement (pdf). “Both domestic and international companies can leverage this facility as a centralized storage and distribution hub, optimizing inventory management and reducing transportation costs,” the statement read.

SOUND SMART: Bonded warehouses are government-authorized facilities that store goods for a limited time without being subject to duties, taxes, or customs fees. They’re particularly useful for temporary storage of goods moving internationally.

AUTOMOTIVE-

#1-GB Auto expands business in Iraq: GB Auto has acquired exclusive distribution rights to the Chinese automotive brands JAC and Foton in Iraq through its GQ subsidiary, according to a statement (pdf). GQ was established in 2014 to manage two- and three-wheelers in Iraq, but now it will add passenger and commercial vehicles to its portfolio.

#2-Infinity to provide charging solutions for MG electric vehicles: Our friends at renewables firm Infinity will be providing charging solutions for owners of the MG4 EV models under a strategic partnership with Mansour MG Automotive — the exclusive importer of MG vehicles in Egypt — Infinity said in a statement (pdf). MG4 EV owners can now either opt for an exclusive pre-paid card giving them access to Infinity’s charging stations or install a charger at their home.

SMES-

#1- More support for local SMEs: Beltone Holding subsidiary Cash for Microfinance has signed a cooperation protocol with Italian consultant Microfinanza Italia to set up a EUR 2.2 mn project aimed at “empowering Egyptian entrepreneurs,” the company said in a statement (pdf). The project will facilitate startups’ access to financial resources and technical expertise. Cash for Microfinance is also “working to link scientific research with industries to enable a competitive knowledge economy and improve the business climate.”

#2- Noqood Finance receives SME finance license: Noqood Finance, a subsidiary of fintech startup Noqood Holding, has received the necessary license from the Financial Regulatory Authority to embark on its SME finance services, according to a statement (pdf). The company said it will target projects that “meet the needs of the community and enhance sustainable development, in addition to advisory services.”

AVIATION-

Daily flights between Cairo and Delhi? EgyptAir is considering launching daily flights between Cairo and Delhi on the back of stronger traffic between the two capitals, The Times of India reports, citing a statement from the airline. EgyptAir has been running four weekly flights between the two capitals since August 2023.

HEALTHCARE-

The Japan International Cooperation Agency will fund a three-year healthcare program which will be implemented across 22 facilities across the country, under an agreement signed with the Egyptian Healthcare Authority (EHA), according to a statement.

Tags:

ALSO ON OUR RADAR automotive aviation Beltone Financial EgyptAir GB Auto Infinity JICA logistics

PLANET FINANCE

Latest inflation data sends USD rally into reverse

The aftermath of promising inflation data continues: US inflation fell to 3.4% in April after months of higher than expected readings, prompting investors to rethink their forecasts on the Federal Reserve’s upcoming move, writes the Financial Times.

No more hikes: “The inflation data this week meant another rate hike is off the table… now it’s just a matter of time until they start cutting,” Bank of America’s head of G10 foreign exchange strategy told the paper. Traders now expect the Fed to deliver two quarter-point rate cuts in 2024.

The USD reacts: Reignited optimism for a cut has sent the USD rally into reverse, with the greenback expected to record its first down month of 2024.

US stocks are at an all time high: The weakening USD has helped drive up US stock markets, with Wall Street’s benchmark indexes — the S&P 500, Nasdaq and Dow — all hitting record highs last week.

Don’t celebrate yet: “We are at a turning point but we are going to faff around here for some indeterminate period of time, ”a foreign exchange strategist at Société Générale told the FT. Fed chair Jay Powell has said time and time again that the central bank will not cut rates before it ensures that the country is on a sustainable path to 2% inflation — its core target.

MARKETS THIS MORNING-

Asian markets are solidly in the green this morning, tracking last week’s gains on Wall Street, and both US and European equities futures ticked slightly higher overnight.

EGX30	27,316	+4.5% (YTD: +9.7%)
USD (CBE)	Buy 46.79	Sell 46.92
USD (CIB)	Buy 46.80	Sell 46.90
Interest rates (CBE)	27.25% deposit	28.25% lending
Tadawul	12,198	0.0% (YTD: +1.9%)
ADX	9,042	0.0% (YTD: -5.6%)
DFM	4,068	-0.4% (YTD: +0.2%)
S&P 500	5,303	+0.1% (YTD: +11.2%)
FTSE 100	8,420	-0.2% (YTD: +8.9%)
Euro Stoxx 50	5,064	-0.2% (YTD: +12.0%)
Brent crude	USD 83.98	+0.9%
Natural gas (Nymex)	USD 2.63	+5.3%
Gold	USD 2,417	+1.3%
BTC	USD 66,211	-1.1% (YTD: +56.5%)

THE CLOSING BELL-

The EGX30 rose 4.5% at yesterday’s close on turnover of EGP 6.0 bn (25.3% above the 90-day average). Regional investors were net sellers. The index is up 9.7% YTD.

In the green: Elsewedy Electric (+20.0%), AMOC (+19.9%), and Mopco (+17.8%).

In the red: Telecom Egypt (-4.9%) and Edita (-0.3%).

Tags:

Financial Markets interest rates Planet Finance US Federal Reserve

Our weekly deep dive into education in Egypt, from K-12 to post-secondary.

Published every Monday in EnterpriseAM.

Read Blackboard

BLACKBOARD

Weighing up the strengths and weaknesses of the US and British schooling systems in Egypt

British vs US education: Cairo-based educational services provider BalancED tried to answer the age-old question of which is better British or American education during its annual conference, which took place on Saturday under the title “The British & the American Systems in Egypt: Similarities & Differences.” Enterprise was in attendance, along with representatives from Pearson Education, Cambridge Assessment, Florida Atlantic University, Education First, the British Council, and the British University in Egypt.

BalancED has experience with both, as it tries to cater to different parent’s preferences. Last September, the company opened the British Asten College, with investments of EGP 920 mn, the company's vice president for strategy Omar El Bakry told Enterprise. It also manages the New Generation International Schools, which follow the US system.

“The matter of choosing between the British and American education system has been a hot topic among parents for years,” BalancED Managing Director Salma El Bakry told Enterprise. The question also concerns teachers who are interested in professional development and investors in the Egyptian education sector, she added.

HOW ARE THEY DIFFERENT-

The main difference between the two: How students are examined. While the British system uses projects and coursework to assess students from grades one to nine, the International General Certificate of Secondary Education (IGCSE) involves passing standardized exams that almost entirely determine the student's grade. The US system, on the other hand, involves standardized tests to receive the US diploma, but their weight in the final evaluation is almost as important as the cumulative GPA that the student earns throughout all stages of their education.

These examination methods serve overlapping but distinct educational goals. The US system encourages individuality and equips students with entrepreneurial and innovative skills, making active participation in school and extracurricular activities crucial for final assessments before university, shared Omar El Bakry. Supporters of the British system, on the other hand, believe that assessing hundreds of thousands of students through various projects and activities over several years could compromise integrity and fairness in British international schools, which are accredited in 160 countries. Therefore, they prefer standardized tests to measure academic performance, said Kathryn Booth, head of Pearson School Qualifications in MENAT.

One thing the British system offers is centralized school accreditation. The British Council, affiliated with the British government, liaises with British schools and mediates between them and international accrediting bodies like Pearson and Cambridge. This helps standardize the educational experience among schools, explained Maysaa Barakat, associate professor of education leadership at Florida Atlantic University. In contrast, US schools lack a central body for coordination with international accrediting organizations. This decentralization reflects the differences in accreditation requirements and enrollment conditions across various US states, leading to significant variations in the implementation of the US system. These inconsistencies can sometimes harm the system’s reputation and cause confusion among parents when choosing schools, Barakat noted.

BREAKING DOWN THE MISCONCEPTIONS- Parents have accumulated their own views and beliefs about each of the systems — which don’t always paint the systems in the best light.

#1- The British system: “Parents feel that the British system is the hardest route to obtain the IGCSE and prefer other pathways they see as easier,” said Omneya Kassabgy, head of the Career Development and Consultations Academy. However, she views this as a flawed approach to evaluating educational pathways. The British system takes a comprehensive approach, which aims to enrich students with multidisciplinary academic knowledge and ensure fair and honest assessments through standardized exams, she explained.

#2- The US system: “Some say it's for students who can't complete the British pathway, or that it's a way for the wealthy to buy university entrance, or that it lacks the discipline of the British system. These rumors are baseless," Barakat explained, noting that the US diploma is relatively new in Egypt compared to the established British system. “One of the best aspects of the US system is its vibrant student life, designed to encourage regular attendance, active participation, and teamwork. We should maintain this. If one school misuses this approach, it doesn’t mean the system itself is flawed,” BalancED’s Academic Director, Nabil Michel, said.

Getting with the times: The Cambridge program has introduced study materials on digital literacy and coding for middle schoolers. It has also begun experimenting with fully digital exams in various regions depending on the preparedness of their digital infrastructure, said Tabinda Mazhar, Cambridge Assessment’s head of educational projects for Pakistan and MENA.

Both systems are working on tackling the rise of AI: The development of AI language models poses a challenge when it comes to evaluating students through research and practical projects. Currently, projects are being piloted that allow students to use tools like ChatGPT in their work, Booth added. “Initially, Google search was considered a means of cheating, but it is now used for research and analysis. It's the same with AI,” Michel explained.

THE BIGGER PICTURE-

Choosing the right school is crucial. Whether opting for the American or British system, the key difference lies in the institution's commitment to comprehensive educational programs that meet standards. International accreditation ensures a school meets minimum requirements, such as having scientific laboratories and appointing social and psychological specialists, explains Booth. However, maintaining high educational quality and leveraging professional development for staff requires serious initiative from schools, she continued.

Schools must localize international education programs. It's crucial for these systems to adapt to local social and cultural contexts — some American school graduates excel in personal and academic skills but lack proficiency in Arabic and knowledge of Egyptian history and culture.

At the end of the day: Each educational system has its strengths and develops different skills in students, whether it's the American, British, Egyptian public, or vocational education systems, Salma El Bakry added. The choice ultimately depends on parents' perceptions of each system and the student's needs and personality, she added.

Your top education stories for the week: Education Minister Reda Hegazy isparticipatingin the World EducationForum 2024 in London from 19 to 22 May. The minister is set to discuss the country’s work to develop school curricula, technical education, and make education more accessible to people with disabilities.

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CALENDAR

2024

MAY

19-21 May (Sunday-Tuesday): Egypt International Summit for Digital Transformation and Cybersecurity.

20 May (Monday): Malaysian Palm Oil Forum in Cairo, with attendance from Malaysian Plantation and Commodities Minister Johari Abdul Ghani.

22 May (Wednesday): Egypt will host the annual meetings of Arab financial authorities, at the New Administrative Capital.

23 May (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

25-27 May (Saturday - Monday): Techne Summit, Cairo International Stadium.

29 May (Wednesday): Virtual launch of Chicago Booth Executive Program.

JUNE

15-19 June (Saturday-Wednesday): Eid El Adha (TBC) (national holiday).

29-30 June (Saturday-Sunday): EU-Egypt Investment Conference.

30 June (Sunday): June 30 Revolution Day (national holiday).

JULY

7 July (Sunday): National holiday in observance of Islamic New Year (TBC).

18 July (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

23 July (Tuesday): Revolution Day (national holiday).

AUGUST

4-5 August (Monday-Tuesday): Egypt Expat Forum.

SEPTEMBER

2-5 September (Monday-Thursday): Egypt International Airshow, El Alamein International Airport.

5 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

15 September (Sunday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

25-26 September (Wednesday - Thursday): The Asian Infrastructure Investment Bank’s (AIIB) 2024 annual meeting, Samarkand, Uzbekistan.

OCTOBER

6 October (Sunday): Armed Forces Day.

17 October (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

21-27 October (Monday-Sunday): The World Bank and IMF annual meetings.

NOVEMBER

21 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

DECEMBER

26 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

EVENTS WITH NO SET DATE

April 2024: President Abdel Fattah El Sisi will visit Turkey.

1Q 2024: Egyptian-Qatari Joint Supreme Committee.

1Q 2024: Opening of the newly developed Pyramids Plateau in Giza.

1Q 2024: The government is set to finalize the sale of the Gabal El Zeit wind farm.

February-May: The Grand Egyptian Museum could officially open to visitors.

March 2024: The USD 2.7 bn MIDOR Refinery is set to begin full operations.

May 2024: Egypt to receive USD 20 bn of Ras El Hekma funds.

May 2024: Arab Finance Ministers’ meeting at Egypt’s administrative capital.

June 2024: Gov’t expects to finalize sale of Beni Suef combined-cycle power plant.

Mid-year: The fifth Japan-Arab Economic Forum.

1H 2024: Gov’t expects to finalize sale of four water desalination plants.

2H 2024: Gov’t to launch the Cairo Ring Road BRT buses.

3Q 2024: Egyptian-Armenian Joint Committee.

November 2024: Egypt to host the World Urban Forum (WUF12).

End of 2024: The launch of the high-speed train line linking Ain Sokhna with Al Alamein City.

End of 2024: Shalateen Mining Company to launch a gold exploration bid in the Eastern Desert.

2025

EVENTS WITH NO SET DATE

2Q 2025: Safaga Terminal 2 to start operations.

2027

20 January-7 February: Egypt to host the African Games

EVENTS WITH NO SET DATE

End of 2027: Trial operations at the Dabaa nuclear power plant expected to take place.

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