FinMin hopes to unlock USD 2.5 bn from the IMF this fall

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What We're Tracking Today

Lukoil plans USD 23 mn investment in oil exploration

Good morning, friends, and welcome to a holiday-shortened workweek for our readers in Egypt.

It’s a macro-heavy kind of morning thanks to Finance Minister Ahmed Kouchouk’s roadshow to London last week and the good folks at the IMF. In short order, we have for you news that the ministry hopes to unlock USD 2.5 bn after it wraps the next two IMF reviews this fall; that tax reforms could double collection this fiscal year; and the inside track on where we stand in the phase-out of subsidies.

We also have word that the Customs Authority is mulling the imposition of a levy on royalties and reviews of both venture capital and M&A activity in Egypt in the first half of the year.

^^ All of this and more below and in this morning’s news well.

PSA-

#1- Egypt is in for a long weekend: The public and private sectors will be taking Thursday, 24 July as a holiday in observance of the 23 July Revolution.

We’re off, too: EnterpriseAM Egypt will be taking a publication break on Thursday, but we’ll be back in your inboxes on Sunday, 27 July.

#2- Fly directly from Abu Dhabi to Alamein: Etihad Airways kicked off service to Alamein from Abu Dhabi on Thursday — the new route offers twice-weekly flights on Thursdays and Sundays, Etihad Airways said in a statement. “As leisure travel continues to grow, destinations like Al Alamein offer tremendous appeal for our guests seeking premium summer experiences,” the statement read.

WEATHER- It’s another sunny day in Cairo, with a high of 36°C and a low of 25°C, according to our favorite weather app.

It’s a little cooler in Alexandria, with a high of 31°C and a low of 22°C.

MORNING MUST-READ-

#1- Bragging to your clients about how much time you’re saving with AI may not be good for business. That’s what PwC found: It had to “cut prices for some services as clients raised the fact that the consultancy is using artificial intelligence to complete its work quicker. ‘Clients would hear us talking about using AI and say, ‘We want our fair share of those efficiencies,’ PwC Chief AI Officer Dan Priest” told Bloomberg.

Some AI tools are now handling up to 90% of certain processes during an audit, The Finance Story notes. AI is also “showing up in supply chain optimisation and risk analytics … [and] automating GST filings, transfer pricing reviews, and global tax strategies.”

The catch: You still have to believe what the AI says. Tech strategy pundit and former VC sage Benedict Evans put it nicely: “I find it puzzling and frustrating that OpenAI and Anthropic keep launching new models where they propose as use cases highly specific information retrieval in professions that require zero defects, when their systems are inherently incapable of doing that. These are use cases where ‘80% correct’ is meaningless — there is only right or not right. There are lots of scenarios where a system that produces a fantastic first draft is useful. But ‘build me a DCF’ where you should presume that there are mistakes everywhere is not useful.”

#2- Mansoura University grad Mahmoud Felfel (LinkedIn) has sold his California-headquartered startup PlayAI to Mark Zuckerberg’s Meta. It’s a homecoming of sorts for the former Dubizzle engineer, who co-founded PlayAI in April 2020 but worked for Meta-owned WhatsApp as a software engineer for part of 2021 and 2022.

What’s PlayAI? The company bills itself as a “platform for generative speech and voice cloning” and is used by teams at companies including Amazon, Coursera, and Chevron as well as by the US Army, according to its website.

The PlayAI team joins Meta this week, according to Bloomberg. There’s no word on how much the acquisition cost Zuckerberg. PlayAI said last November that it had raised USD 21 mn in seed and pre-seed funding from outfits including Kindred Ventures, Y Combinator, and 500Global.

WATCH THIS SPACE-

#1- HSBC has launched a new bid to figure out who will succeed Sir Mark Tucker as chairman after none of the 100 or so names considered in the first search worked out. “Some of the candidates of interest to the board were unavailable while others had declined when approached,” the Financial Times reports.

#2- Russian energy giant Lukoil plans to invest around USD 23 mn in oil exploration in the Eastern Desert, a government official told Asharq Business. Operations are expected to focus in the west Gulf of Suez. The Russian company is set to conduct a seismic survey this month and drill six exploratory wells throughout a three-year research period in the region.

#3- More Egyptian projects in Libya? The value of Egyptian projects in Libya is expected to double to USD 10 bn by 2028, an official from the General Libyan Union of Chambers of Commerce told Asharq Business. Libya’s Reconstruction Fund has allocated LYD 69 bn (c. USD 12.7 bn) for companies participating in the rebuilding effort, with Egyptian firms expected to take a significant share, he added.

REFRESHER- Egypt is already ramping up its investment presence in Libya, moving forward with plans to set up two industrial zones in Libya worth USD 250 mn, with at least 22 local companies having expressed interest in the projects. Egyptian firms are also forming joint ventures with Libyan counterparts to ease market entry.

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

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THE BIG STORY ABROAD-

Trump’s lawsuit against the Wall Street Journal is dominating global headlines this morning: US President Donald Trump has filed a USD 10 bn libel lawsuit against the Wall Street Journal, owner Rupert Murdoch, Dow Jones, and News Corp after the newspaper published claims that Trump had contributed a suggestive letter to a scrapbook for Jeffrey Epstein’s 50th birthday, marking his most aggressive legal challenge to media coverage since entering office. Reactions to the WSJ report and lawsuit have been sharply divided — even within Trump’s base. (Reuters | Bloomberg | Financial Times | New York Times | The Guardian)

AND- Trump wants higher tariffs on EU goods: Trump is pushing for a 15-20% baseline tariff on EU imports, in an aggressive turn that could derail talks ahead of his self-imposed 1 August deadline, writes the Financial Times, citing sources familiar with the matter. Trump is also unwilling to lower 25% auto tariffs and “would be happy to keep duties on the sector,” according to the sources. The EU, which has already faced steep US duties on steel and aluminum, appears divided on countermeasures.

Egypt expects IMF reviews to wrap up this fall, unlocking USD 2.5 bn disbursement

A combined fifth and sixth review of Egypt’s USD 8 bn IMF loan program is expected to conclude in September or October, unlocking a USD 2.5 bn tranche, Finance Minister Ahmed Kouchouk said during his visit to London last week. “Both sides are working on the expectation that this should be happening in September, October,” he said, adding that “the IMF is after certain targets — and that's what is important.”

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

The IMF is expected to focus heavily on the government’s state asset sales strategy, with authorities now targeting “few, but key strategic transactions,” he said. The Madbouly government wants to conclude up to four sales this fiscal year in the telecom, airport management, and financial services sectors, Kouchouk said, adding that another four sales are expected the following year.

ICYMI- Earlier this month, the IMF decided to combine the fifth and sixth reviews, stating that “more time is needed” to make progress on the state withdrawing itself from the economy and the broader reform agenda. According to the IMF’s country staff report for the fourth review of our loan program, the combined reviews are scheduled for 15 September.

Some fresh privatization moves? The government aims to complete three to four privatization transactions during the current fiscal year, Kouchouk said. “It will be across a lot of sectors,” he added, noting that Egypt has shared a strategic, medium-term plan with the IMF and other international partners that includes a “clear, visible timeline.” The IMF said in its report that Egypt expects to receive USD 3 bn in inflows from asset sales during the current fiscal year, up from USD 600 mn last fiscal year, and USD 2.1 bn the year after.

And brace for more investment: Kouchouk pointed to continued interest from Middle Eastern and European partners across several sectors. “We are expecting more and more big announcements on the energy, on the renewables, on the tourism, as well as on the real estate and the financial sector,” he said. The IMF is also banking on FDI to help close Egypt’s FY 2025-26 external financing gap, projecting net FDI inflows to reach USD 15.6 bn this fiscal year, up from an estimated USD 13.2 bn in FY 2024-25.

Fiscal + debt strategy also in the spotlight: Speaking at a panel in London, during his participation in a three-day business mission to the UK — organized by the British Egyptian Business Association — Kouchouk said the government is implementing an “integrated strategy to improve public debt indicators and maintain investor confidence.” He emphasized plans to diversify financing tools and markets tapped, extend debt maturities, and reduce reliance on short-term instruments.

Balancing the books while supporting growth: Kouchouk added that the government is managing public finances “with balance,” maintaining fiscal sustainability while supporting economic activity and upping investments in human development and social safety nets. Fiscal performance, he said, “significantly improved” last year, enhancing Egypt’s resilience to global and regional shocks.

Egypt eyes USD 4 bn bond issuance to address funding gap

Egypt plans to issue up to USD 4 bn in international bonds over the next year to help address its USD 11 bn external financing gap, Finance Minister Ahmed Kouchouk said, according to Bloomberg.

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The details: The planned issuances could include EUR- and USD-denominated securities, sustainability bonds, sukuk, and even CNY- or JPY-denominated instruments,Kouchouk said. These issuances would cover about 40% of the country’s external funding needs. The remainder is expected to come from concessional financing.

SOUND SMART- “Issuing new USD bonds could prove expensive. Egypt’s USD bonds trade at an average yield of 9.3%,” Bloomberg writes.

More in the pipeline: Authorities are also mulling EGP-denominated sukuk and retail bonds for the domestic market this fiscal year to offer new savings instruments and increase liquidity. Moreover, the country is working to rejoin JPMorgan’s bond index and is in talks with Euroclear to facilitate foreign access to the local debt market, both of which aim to attract fresh inflows.

REMEMBER- Egypt was dropped from the index in January, 2024 due to persistent FX shortages in the country at the time that prevented investors from repatriating returns. This was not the first time we were put back on the list, as Egypt rejoined the index in early 2022 after having been kicked out for over 10 years because of the economic turmoil following the 2011 revolution. Egypt hopes to be added once again to JPMorgan’s Government Bond Index-Emerging Markets by 2026, especially with the gradual improvement of the exchange rates and other crucial economic indicators, a government source told EnterpriseAM earlier this summer.

Not our first effort to close this gap: Last month, the Finance Ministry completed a USD 1 bn sovereign sukuk issuance on the Vienna Stock Exchange via private placement, which was fully subscribed by Kuwait Finance House.

Reforms to nearly double tax revenues in FY 2025-2026

Tax reforms to nearly double tax revenues this fiscal year: The government is looking to secure an additional EGP 195.2 bn in tax revenues — equivalent to 0.98% of GDP — in FY 2025-26 through a bundle of tax reforms, the IMF said in its country staff report (pdf) for the fourth review of our USD 8 bn loan program. To put the target in perspective, the government expects to generate some EGP 200 bn in tax revenues this fiscal year, meaning the reforms are expected to nearly double the pool. These reforms — some of which have already been rolled out — include amendments to the VAT Law, according to EnterpriseAM’s sources.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

“Structural tax measures” coming our way include imposing a 4% withholding tax on freezone goods sold domestically, which is expected to deliver an additional EGP 13.78 bn in tax revenues — equivalent to c.1% of GDP. The current proposal on the table would categorize the 4% tax as a tax deductible expense, and would be deducted from fees paid to the General Authority for Freezones and Investment (GAFI), a senior government source told EnterpriseAM. The proposal — which would require amending Article 41 of the Income Tax Act — also looks to include an additional flat tax on these goods on top of customs duties, according to our source.

Other tax measures on the horizon: The government is looking to ratify amendments to the Disabilities Act with an eye to fully implement the amendments in the current fiscal year, according to the report. The plan also includes the rollout of the overhauled property tax, which is expected to yield tax revenues equivalent to 0.05% of GDP in FY 2025-26, the report shows. Legislative changes governing tax exemptions are also currently in the works to regulate — but not eliminate — disability-related car imports and personal vehicle imports, as well as to help close regulatory and legislative loopholes that allow for tax evasion, a Customs Authority source told us.

And we can expect more changes next fiscal year: “We also commit to legislate another tax package of high-quality tax measures to be delivered in the context of the FY 2026-27 budget to meet the program’s tax revenue objective,” the Finance Ministry said in the report.

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Diving deeper into the IMF’s forecasts for subsidies in Egypt

The IMF now sees subsidies reaching EGP 744 bn in FY 2025-26, before edging up to EGP 833 bn in the next fiscal year, with energy subsidies making EGP 154 bn of total subsidies this fiscal year, before falling to EGP 140 bn in FY 2026-27, the fund said in its country staff report (pdf) for the fourth review of our USD 8 bn loan program.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

How this compares to gov’t targets: The EGP 154 bn is a little bit higher than the government’s forecast of E GP 150 bn for the current fiscal year’s budget. Meanwhile, the figure is lower than the EGP 216 bn the fund had initially penciled in for FY 2024-25 during its third review, before revising it to EGP 159 bn.

Energy subsidies to peak before declining later: Energy subsidies are projected to jump to EGP 180 bn in FY 2027-28, and further climb to EGP 190 bn in FY 2028-29, before dropping to EGP 166 bn in FY 2029-30.

Let's talk fuel subsidies specifically: Fuel subsidies are projected to reach EGP 79 bn this fiscal year by the Fund, higher than the EGP 75 bn the government had allocated in its FY 2025-26 budget. Looking ahead, the IMF sees fuel subsidies in the country rising to EGP 95 bn in FY 2026-27 and to EGP 130 bn in FY 2027-28.

REMEMBER- Prime Minister Moustafa Madbouly reiterated in March Egypt’s intention to have energy prices reach cost recovery levels by the end of the year, by phasing out all fuel subsidies in line with its structural reform agenda with the IMF. Despite ongoing efforts to reform its subsidy system, the government still spends EGP 366 mn per day and EGP 11 bn a month on fuel subsidies, according to the Oil Ministry.

The government hiked fuel prices at the pumps in April for the first time in 2025, raising fuel prices by 11.8-14.8%.

Fossil fuel subsidy removal and green investments could boost our GDP: The IMF sees Egypt having a significant opportunity to achieve its climate goals and enhance its growth through removing fossil fuel subsidies alongside expanding renewable energy investments. Proper fossil fuel pricing in Egypt, paired with allocating 50% of revenues toward reducing the budget deficit, could boost the country’s GDP by up to 7.3% by 2030 and 13.8% by 2040, the IMF noted.

As for electricity subsidies, the IMF expects them to reach EGP 75 bn during this fiscal year, matching the amount the government allocated in its budget. Looking ahead, these subsidies are projected to drop to EGP 45 bn in FY 2026-27, before gradually increasing to EGP 50 bn in the subsequent fiscal year and to EGP 56 bn in FY 2028-29 and finally to EGP 63 bn in FY 2029-30.

ICYMI- Two government sources told us in May that the Madboully government could push back the electricity price hike planned for this summer. The Electricity Ministry raised electricity prices by 14-40% between August and September 2024.

Fuel + power hikes help restore EGPC’s finances: “Successive and notable fuel and electricity price hikes have begun to restore the finances of the Egyptian General Petroleum Corporation (EGPC) and lay the foundation for price incentives to motivate more efficient consumption behavior and a shift toward a greener economy,” the report read.

Food subsidies projections: The IMF sees food subsidies reaching EGP 153 bn during the current fiscal year, before decreasing to EGP 149 bn for the following three fiscal years. However, a notable jump is foreseen in FY 2029-30, with food subsidies projected to hit EGP 163 bn.

Egypt aims to increase food subsidies spending to 0.7% of GDP this fiscal year. This percentage is then set to be reduced to 0.6% of GDP in the next fiscal year and to 0.5% of GDP in FY 2027-28. The government aims to achieve this by expanding targeted cash transfers and increasing resources to health and education, the IMF said.

More is needed: While the IMF praised the government’s expansion of the Takaful and Karama cash transfer program to reach 5.2 mn households, it has emphasized the need for further enhancement, especially amid rising poverty risks from recent economic shocks. Takaful and Karama’s total spending is set to increase to 0.4% of GDP this fiscal year, the fund noted.

Egypt considers customs on royalties for imported goods, services

The Finance Ministry is considering introducing a new framework for collecting customs on royalties for imported goods and services, government sources told EnterpriseAM. The move is designed to address long-standing disputes with several foreign companies.

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But first, what do royalties mean in this context? They specifically cover the amounts paid for the use, licensing, or exploitation of any intellectual property rights. This includes, for instance, fees for franchise agreements, the use of intellectual property rights, and consulting services. It also extends to goods produced locally under agreements between local and foreign manufacturers.

The move does not require legislative amendments, as the law already stipulates them, but the mechanism for their collection has not yet been issued, the source noted.

How we got here: The Customs Authority in 2021 suspended (pdf) customs on royalties after the levies “significant debts for foreign firms due to valuation differences arising from royalties, sparking a major issue.” However, this decision does not mean waiving the duties that are being calculated, meaning that they are being recorded as outstanding debts. Moreover, the “five-year prescription rule” does not apply in this case, our sources said, meaning that the Customs Authority does not lose its right to claim these debts even after five years pass.

The new system aims to establish clear rules for when and how royalties would be subject to customs. It will also introduce new ways to collect VAT on these royalties. The move is expected to significantly resolve the issue related to foreign firms’ debts, attracting more foreign investment to the country, according to our sources.

It will be part of an updated customs system: The mechanism for calculating customs duties on royalties is expected to be part of the updated customs system, which also includes new provisions, the sources told us.

The new tax and customs system is part of Egypt’s structural reform program agreed with the IMF, the sources noted. The IMF is set to hold its combined fifth and sixth reviews of Egypt’s USD 8 bn EFF arrangement later this year, it noted in its recently released report on the program’s fourth review. Earlier this month, the IMF decided to combine the fifth and sixth reviews, stating that “more time is needed” to make progress on the state withdrawing itself from the economy and the broader reform agenda.

The government is currently working to identify foreign companies providing services such as consulting, intellectual property licensing, and trademark usage in the local market and reviewing their contract structures. This comes alongside drafting new regulatory and mandatory mechanisms for the new sector.

Maintenance and replacement contracts and after-sales services between local and foreign companies will be subject to custom duties if their value is included in the overall price of the imported goods, according to our sources.

A game changer? The proposed customs duties are expected to have a significant impact on foreign transfers and overall foreign currency flows, one of our sources said, adding that an “unprecedented surge” in VAT revenues is also expected.

What went wrong? The Customs Authority used to assess customs duties without fulfilling the fundamental conditions set by the international customs law for royalties and international marketing expenses. The most important one is that they must be added to the price of the commodity and related to it, customs expert Badawi Ibrahim told EnterpriseAM.

This led to four problems, Ibrahim noted, one of which is the collection of customs duty on product components. Secondly, the VAT is collected on the product, including the royalty. This leads to paying higher than expected tax amounts. When receiving imported services from an unregistered foreign provider, the service recipient pays 14% VAT on the services contract under the reverse charge mechanism. In addition, income tax is also paid on that service, Ibrahim noted, adding that this creates a situation of double taxation on VAT.

Also, the Customs Authority imposes late payment penalties on VAT.. Finally, the fourth problem arises when an agreement includes other services beyond just royalties, without explicitly detailing their specific proportion of the total contract value, Ibrahim added.

International agreements will be taken into account to avoid double taxation, ensuring the interests of foreign companies operating in various sectors in Egypt, according to our sources.

The planned customs aim to localise brands and expand franchises through clear mechanisms that meet international standards.

Decisive solutions in the making: Our sources told us that the proposed solutions will introduce a flexible system for collecting customs duties on royalties. This includes a mechanism to ensure accurate VAT collection and the cancellation of fines previously imposed by certain customs departments. Additionally, tax will not be levied on services unless they are explicitly included in the price of goods on invoices submitted to customs outlets.

Moody’s keeps Egypt’s rating unchanged, but sees signs of improvement ahead

Moody’s kept Egypt’s outlook positive and affirmed its Caa1 rating — seven rungs into junk territory — the credit rating agency wrote. The agency said its positive outlook “reflects the prospect for an easing of Egypt's debt service burden. Increasing monetary policy credibility and effectiveness.”

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REMEMBER- In March of last year, shortly after the float of the EGP, Moody’s upgraded Egypt’s outlook to positive from negative and affirmed its Caa1 rating. The agency cited the USD 35 bn Ras El Hekma investment and policy measures taken by the central bank for its decision.

It could go either way: “The ongoing fiscal adjustment and structural reforms raise the prospect of a medium-term improvement in fiscal metrics and higher potential growth. However, geopolitical disruptions and social pressures could challenge the policy adjustment,” Moody’s said.

Still a long way to go: Moody’s flagged continued risks from high debt (89% of GDP), low revenue (19% of GDP), and a still-wide current account deficit (6% of GDP). Structural rigidities, the outsized role of the public sector, and vulnerability to geopolitical or social pressures could also slow down reform momentum.

A possibility for an upgrade: Moody’s indicated that the rating could improve if there is sustained improvement in debt affordability, driven by structurally higher revenue and lower borrowing costs. Continued adherence to a flexible exchange rate regime and preservation of FX buffers would also support a stronger credit rating over time.

…Or a downgrade: However, the agency warned that downward pressure could materialize if macroeconomic reforms stall, debt affordability deteriorates further, or FX buffers come under renewed stress due to capital outflows or external shocks.

Egypt’s M&A engine roars through 1H, and it’s just getting started

M&A activity saw a strong start to the year, with industry leaders including our friends at Fawry, Hassan Allam, CIRA, and Taqa Araba driving the momentum and local corporates actively reshaping their portfolios.

The first half brought major consolidation moves across fintech, ins., education, and energy — setting a dynamic tone for 2H.

IN FINTECH-

Fintech giant Fawry was easily the most acquisitive firm in 1H, kicking off its spree in February with the acquisition of a majority stake in local hospital and medical institutions manager Code Zone. That was quickly followed by a 56% stake in SME-focused financial services provider Virtual CFO, and a 51% stake in ERP software firm Dirac Systems. The moves — worth a combined EGP 80 mn — are part of the launch of Fawry Business, a platform offering digital transformation tools for SMEs and large enterprises.

Elsewhere in fintech: Basata upped its stake in Jordan’s MadfoatCom to 25%, part of its broader play to expand regionally and potentially raise its holding to 49%. EFG Finance exited its 51% stake in PayTabs Egypt in March, selling it to Saudi parent PayTabs Global as part of a portfolio streamlining effort.

EDUCATION-

CIRA Education submitted an MTO (pdf) earlier this month to up its stake in EGX-listed subsidiary Cairo for Educational Services (CAED). CIRA is looking to increase its stake in CAED to up to 90% from the current 69.4%. CIRA is looking to snap an additional 20.6% of its subsidiary — represented in 2.5 mn shares — at an initial price tag of EGP 32.7 per share. CIRA plans to keep CAED listed on the exchange if the MTO goes through.

INS.-

The ins sector also saw heightened M&A interest, with a major bid from Morocco’s Wafa Assurance to acquire up to 100% of the Egypt Kuwait Holding subsidiary Delta Ins. The bid values the insurer at around EGP 5 bn. Wafa is looking to take Delta Ins. private, with plans to delist the company from the EGX.

In June, insur-tech broker Bringy acquired healthtech startup HealthTag, which provides affordable medical access to the uninsured — a strategic move aimed at deepening Bringy’s footprint across the MENA region.

CROSS-BORDER TRANSACTIONS-

In June, Hassan Allam Utilities secured regulatory approval to acquire a 30% stake in Acwa PowerLuxor, a local subsidiary of the Saudi renewables player.

In May, Elsewedy Electric acquired a 60% stake in Dubai-based Thomassen Service, which includes Middle East and Africa operations, filters manufacturing, and an African business unit. The transaction marked Elsewedy’s entry into oil and gas services as it looks to diversify its energy portfolio.

DIDN’T MAKE IT ACROSS THE FINISH LINE-

Arla foods still has Domty on its radar: Danish dairy giant Arla Foods delayed submitting a mandatory tender offer (MTO) to acquire EGX-listed Domty in April, citing its inability to complete legal, financial, and technical due diligence while Domty proceeded with a spin-off. Arla emphasized that the deal is on hold, not off the table.

In March, Dice scrapped plans to acquire Twin Top for Real Estate Investment, citing pricing disagreements.

WHAT’S NEXT?

Looking ahead, consumer finance appears to be poised to take the lead in 2H with Al Ahly Capital and our friends at Taqa Arabia both hinting at transactions in the pipeline, signaling continued dealflow in sectors ripe for scale and integration. If the first six months are any indicator, 2025 could be one of the busiest M&A years in recent memory.

VC funding in Egypt hits USD 185 mn in 1H 2025

Venture capital funding in Egypt rose 90% y-o-y in 1H 2025, hitting USD 185 mn in investments during the six-month period, according to Magnitt’s Emerging Venture Markets (EVM) report (pdf). The increase in investments placed Egypt in the sixth spot among the countries with the highest funding value, rising three spots compared to the same period last year. The report covers venture activity across the Middle East, Africa, Southeast Asia, Pakistan, and Turkey.

The ranking places Egypt behind Saudi Arabia and the UAE, which together contributed 85% of total funding and 74% of total transaction count in the MENA region. Saudi Arabia ranked second among all EVM geographies, with USD 860 mn raised from 114 investments in 1H 2025, a 116% y-o-y increase. This was partially attributed to mega transactions (over USD 100 mn), including Ninja and Tabby. The UAE logged USD 447 mn in investments (up 84% y-o-y) across 114 transactions (up 10% y-o-y) — its highest deployment since 1H 2020.

Across the region, VC funding rose 92% to USD 1.5 bn across 310 investments, according to Magnitt’s EVM press release (pdf). The figure marks the region’s strongest half-year performance since 2022 and represents 39% of total funding across emerging markets tracked by the platform. In 2Q 2025, the Middle East funding rose 22% y-o-y to USD 741 mn from 117 investments, according to the report. The region secured USD 1.4 bn across 258 investments in 1H 2025, doubling its performance compared to the same period in 2024.

Fintech was the standout sector in 1H 2025, with funding in the Middle East rising to USD 516 mn, representing 38% of total capital deployed in the region. E-commerce came in second place in terms of funding in the Middle East with USD 321 mn, followed by Enterprise Software with USD 105 mn. Across the broader MENA region, fintech attracted USD 596 mn in 1H 2025, a threefold increase y-o-y.

Who were the top performers? Riyad Capital emerged as the most active investor by capital deployed, while Plus.VC led in terms of the number of investments, according to a separate Magnitt brief (pdf). The largest disclosed transactions included Ninja’s USD 250 mn funding round, Tabby’s USD 160 mn Series E round, and AppliedAI’s USD 55 mn Series A round. These transactions helped push MENA’s mega transactions (USD 100 mn+) to outpace the full-year 2024 total within the first six months of 2025.

Some 42% of Series A and B rounds exceeded USD 20 mn, up from just 10% a year ago — reflecting a growing preference for ventures with proven traction and scalability.

Zooming further out: Total VC funding across all EVMs dropped 7% y-o-y to USD 4 bn — the lowest half-year level since 2017. The decline primarily came on the back of a 32% drop in Mega rounds and continued contraction in Southeast Asia, historically the largest EVM market.

Trump touches on GERD once again

GERD back to the airwaves: US President Donald Trump’s latest comments on the Grand Ethiopian Renaissance Dam (GERD) and improved travel guidance from the US and UK were the main talking points on the airwaves last night.

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Trump doubles down on GERD remarks: Trump has once again weighed in on the GERD dispute, saying Ethiopia “built the dam with US money largely,” adding that “it doesn’t allow much water going into the Nile River,” Trump told GOP senators yesterday (watch, runtime: 17:52). Trump described the GERD as “one of the largest dams in the world” and said, “It should’ve never happened the way it happened.” The topic has been getting a lot of attention from Trump as of late, with the US president making similar comments last week, when he called the GERD a “big problem” and stressed the Nile’s vital importance to Egypt.

An end to the dispute? Ala Masouleety’s Ahmed Moussa weighed in on Trump’s remarks, saying the US president stressed that “the dispute will be solved soon” — though he gave no timeline for a resolution (watch, runtime: 4:09).

AND- US, UK ease travel advisories on Egypt: The US State Department has upgraded its travel advisory for Egypt to Level 2 — “exercise increased caution” — placing it on par with destinations like France and Germany. The UK Foreign Office also revised its guidance, citing the nearly 1 mn Brits who visit Egypt each year as a reflection of the country’s stability and safety, according to a Foreign Ministry statement.

Could we see more countries follow? Moussa described the US’ decision as a significant and timely step (watch, runtime: 2:51). “Many countries follow America’s lead when it comes to travel guidance,” he said.

El Sisi ratifies VAT Law amendments + Eastern Company hikes cigarette prices

LEGISLATION-

VAT amendments signed into law: President Abdel Fattah El Sisi ratified amendments to the VAT Law, according to a decision published in the Official Gazette. The amendments will help the government bring in an additional EGP 200 bn in tax revenues, a senior government official previously told us.

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REMEMBER- The House of Representatives granted final approval to the government-drafted VAT Law amendments last month. The changes will impact the prices of several key goods and services — construction and contracting services, crude oil, cigarettes, and alcoholic beverages.

Cigarette maker Eastern Company hiked the prices of its cigarettes by up to EGP 5.25 shortly after the law was ratified. The price of all its 20-cigarette packs, including Cleopatra, now stands at EGP 44, while its higher-end Viceroy and Pall Mall now sell for EGP 69 a pack. US tobacco giant Philip Morris earlier this month hiked prices by up to 11%.

DIPLOMACY-

Egypt engages with key players in nuclear talks: Foreign Minister Badr Abdelatty held calls with his UK and Iranian counterparts, as well as International Atomic Energy Agency chief Rafael Grossi, to explore reviving negotiations on Tehran’s nuclear program, according to a Foreign Ministry statement. The talks follow moves by the UK, France, and Germany to reinstate UN sanctions on Iran by the end of August, unless it makes progress on a nuclear deal.

CAPITAL MARKETS-

Zaldi Capital filed for a license to underwrite and promote securities, as it prepares to bring new listings to the EGX, Mohamed El Sherif, the company’s head of promotion, told EnterpriseAM.

Three listings in the works: Pending regulatory approval, Zaldi will advise on the potential EGX listings of three companies. One of these companies is in the tourism and real estate sector and plans to debut on the bourse before year-end, and another is in the fintech space and plans to go public in 1Q 2026. A third potential listing is being considered in the agricultural sector.

MENA fixed income rallies, while equities diverge in 2Q 2025 -Mashreq Capital

The second quarter of the year was a mixed bag for MENA markets. Bonds are holding steady on solid returns and sovereign supply, while equities are more uneven — dragged by oil in some markets and lifted by reform and demand in others, according to Mashreq Capital’s latest quarterly outlook (pdf).

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MENA bonds delivered a solid return in 1H, shrugging off global volatility and regional flare-ups. The Bloomberg MENA USD Aggregate Bond Index climbed 4.4% during the first half of the year on the back of a 2.6% rally in 1Q and a 1.7% gain in 2Q. The index continued to offer a yield of 5.7%, some 60 bps above its five-year average, the report said.

Gulf sovereigns and government related entities (GREs) drove most of the returns, with sovereigns contributing 256 bps and GREs contributing 118 bps. Saudi Arabia (+160 bps), the UAE (+122 bps), and Egypt (+36 bps) led the way in the six months ending June, according to the report.

Mashreq Capital’s sovereign picks: The UAE and Qatar offer stability through low breakeven oil prices and diversified economies, supporting steady spreads and investor demand, Mashreq Capital said. Saudi remains fundamentally strong, though long-end bonds face pressure from supply, the report said. Oman benefits from fiscal consolidation and policy credibility, with potential for rating upgrades, while Morocco sees tightening spreads from reforms and discipline, and Egypt is supported by GCC aid, IMF backing, and improving external balances.

It’s “positive” on Oman, Egypt, Morocco, and Turkey, and “neutral” on Saudi Arabia, UAE, Qatar, Kuwait, and Jordan, as these markets offer stability but may face headwinds. Bahrain stands alone with a “negative” view.

The take on corporate fixed income: Mashreq Capital remains overweight on select infrastructure-linked bonds in Saudi Arabia and the UAE, where strong sponsors, predictable cashflows, and sound structures offer compelling yield premiums over sovereign benchmarks, the report said.

GCC AT1s and Tier 2s in particular offer attractive carry opportunities, supported by well-capitalized, often state-linked banks, the report said. On the other hand, Mashreq is cautious on Bahrain and Sharjah, where weakening credit fundamentals underscore the need for more attractive entry points, despite the assumption of broader Gulf support.

The region’s bond supply is expected to reach USD 125 bn by year end, with around 62% already executed in 1H. Saudi Arabia alone accounted for 46% of issuance so far this year. Meanwhile, Kuwait is prepping a landmark USD 20 bn bond issuance, its largest ever, after passing a long-delayed debt law. The UAE is also expected to be a major contributor to 2H supply, with Sharjah and Ras Al Khaimah already active in 1H and further issuances expected at both the federal and emirate level, the report said.

ON THE EQUITIES SIDE-

Bullish on Emirati, Qatari equities: Sustained oil price movements remain the dominant driver of fiscal dynamics across the region, with the UAE and Qatar best positioned in a low-price environment due to their diversified economies and low fiscal breakeven levels, while Saudi Arabia, Kuwait, and Oman exhibit higher sensitivity, the report said.

Mashreq Capital remains cautious on sectors tied to government spending, maintaining limited exposure where fiscal tightening could pose downside risk. Meanwhile, Dubai real estate remains resilient, with Emaar recording its strongest month in May, and despite slower rent growth, there are no signs of distress.

Key market signals ahead: Earnings, projects, and pressure points. The upcoming earnings season will be closely watched, especially in Saudi Arabia, where any further deceleration in earnings growth could weigh on overall market sentiment. Financials are expected to remain solid performers, supported by robust sector data from both Saudi and the UAE, while materials and cyclical names — particularly aluminium producers and copper miners — may deliver upside surprises. A slowdown in regional project awards has also emerged as a concern — if this trend persists, it could drag on earnings growth over the next 12–24 months. On the tourism front, geopolitical tensions pose a lingering risk to arrivals, though recent improvements suggest a more stable outlook.

EGX30	33,821	+1.0% (YTD: +13.7%)
USD (CBE)	Buy 49.36	Sell 49.49
USD (CIB)	Buy 49.37	Sell 49.47
Interest rates (CBE)	24.00% deposit	25.00% lending
Tadawul	11,007	-0.3% (YTD: -8.6%)
ADX	10,262	+0.2% (YTD: +9.0%)
DFM	6,094	-0.2% (YTD: +18.1%)
S&P 500	6,297	0.0% (YTD: +7.1%)
FTSE 100	8,992	+0.2% (YTD: +10.0%)
Euro Stoxx 50	5,359	-0.3% (YTD: +9.5%)
Brent crude	USD 69.28	-0.4%
Natural gas (Nymex)	USD 3.57	+0.7%
Gold	USD 3,358	+0.4%
BTC	USD 117,760	0.0% (YTD: +25.9%)
S&P Egypt Sovereign Bond Index	881.36	+0.1% (YTD: +13.4%)
S&P MENA Bond & Sukuk	145.72	0.0% (YTD: +4.1%)
VIX (Volatility Index)	16.41	-0.7% (YTD: -5.4%)

THE CLOSING BELL-

The EGX30 rose 1.0% at Thursday’s close on turnover of EGP 4.5 bn (10.2% below the 90-day average). Regional investors were the sole net sellers. The index is up 13.7% YTD.

In the green: Edita (+7.8%), GB Corp (+2.8%), and CIB (+2.3%).

In the red: Beltone Holding (-2.6%), Alexandria Mineral Oils (-1.3%), and Juhayna (-0.9%).

CALENDAR

JULY

24 July (Thursday): Holiday in observance of the 23 July Revolution.

End-July 2025: Egypt and Jordan to connect fifth FSRU ‘Energos Force’ to Arab Gas Pipeline via Aqaba port.

Also happening this month:

The first operational trial of Egypt-KSA electricity interconnection line
Etihad Airways to launch twice-weekly flights to Alamein
China’s State Grid aims to finalize contracts for two solar projects.

AUGUST

7 August (Thursday): Finance Ministry to begin disbursement of 50% of exporters’ pre-June 2024 dues over a four-year plan.

28 August (Thursday): Monetary Policy Committee’s fifth meeting.

Mid-August: Launch of electronic platform to register Old Rent Law tenants.

Tourism Development Authority to waive late payment penalties for land purchases if full installments are paid

Late-August: Deadline for cement factories to restart production.

SEPTEMBER

8-11 September (Monday-Thursday): EFG Hermes London Conference takes place in the British capital.

15 September (Monday): IMF to hold its combined fifth and sixth reviews of Egypt’s USD 8 bn EFF arrangement.

24-27 September (Wednesday-Saturday): Cityscape Egypt 2025, Egypt International Exhibition Center

The Egyptian-Moroccan Business Council to send a delegation of 23 local companies to Rabat.

The Engineering Export Council of Egypt will ship a commercial delegation to Russia to ramp up exports to European markets.

Egypt Education Platform (EEP) to launch two new schools in Alexandria and Somabay.

Egypt Otsuka’s nutritional products factory in Tenth of Ramadan to begin operations, with exports to Gulf countries expected by January 2026.

OCTOBER

2 October (Thursday): Monetary Policy Committee’s sixth meeting.

7 October (Tuesday): The 2025 EnterpriseAM Egypt Forum.

12-16 October (Sunday-Thursday): Cairo Water Week, Cairo.

19-22 October (Sunday-Wednesday): Arab African Investment and International Cooperation Summit.

October: The third iteration of the Export Smart Exhibition and Conference.

NOVEMBER

16-19 November: Cairo ICT 2025, Egypt International Exhibition Center

20 November (Thursday): Monetary Policy Committee’s seventh meeting.

November: Egypt to join the EU’s Horizon Europe research and innovation program.

DECEMBER

1-4 December: Egypt Defence Expo (EDEX), Egypt International Exhibition Center.

25 December: (Thursday): Monetary Policy Committee’s eighth meeting.

EVENTS WITH NO SET DATE

Mid-2025: EGX launches sustainability index.

3Q 2025: Nasr Automotive begins locally manufacturing passenger cars.

3Q 2025: Polaris Parks to finalize contracts for two new industrial zones in the new capital and Sadat City.

Mid-2025: The Administrative Capital for Urban Developments to roll out the second phase of offering industrial plots to investors

2H 2025: Potential visit by Chinese President Xi Jinping to Egypt

4Q 2025: The beginning of construction works on China’s State Grid two solar projects.

4Q 2025: GB Auto starts assembling one of China’s Great Wall Motor models in 4Q 2025.

4Q 2025-1Q 2026: Kasrawy Group to launch first Avatr EV models in Egypt.

2025: The InterAcademy Partnership assembly

2025: Nile Basin States Summit, Cairo, Egypt

2025: Release of the government’s Startup Charter document

Before 2025-end: The government will launch two ro-ro shipping lines with Saudi Arabia and Turkey.

2026

Early 2026: Passenger operations on the New Administrative Capital–Nasr City monorail scheduled to begin.

1Q 2026: Trial operations for the Ain Sokhna–Sixth of October section of Egypt’s first high-speed rail line scheduled to begin.

1 January: European Union’s Carbon Border Adjustment Mechanism (CBAM) to fully come into effect.

15 March 2026: IMF to hold its seventh review of Egypt’s USD 8 bn EFF arrangement.

May 2026: End of extension for developers on 15% interest rates for land installment payments

15 September 2026: IMF to hold its eighth review of Egypt’s USD 8 bn EFF arrangement.

2H 2026: Operations at Deli Glass Co’s new USD 70 mn glassware factory kick off.

2027

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

April 2027: Tenth of Ramadan dry port and logistics hub to begin operations.

EVENTS WITH NO SET DATE

2027: Egypt to host EBRD’s annual meetings for 2027.

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

September 2028: First unit of the Dabaa nuclear power plant begins operations.

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