Inflation cools for the second consecutive month in April, recording 32.5% as food and beverage prices rise at a slower pace

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What We're Tracking Today

Egypt’s House committee kicks off budget discussions

Good morning, friends. It’s an econ-heavy morning here in Egypt with fresh inflation and foreign debt data out over the weekend. We expect things to stay busy as the House Budget Committee prepares to hold 21 meetings on next year’s state budget.

WATCH THIS SPACE-

iPhones made in Egypt? Egypt is working to get Apple to set up a factory in the country, Prime Minister Moustafa Madbouly said during a visit to the Vivo smartphone factory in Tenth of Ramadan (watch,runtime : 8:17). The government is yet to release any statements to clarify what progress has been made in persuading the world’s second largest company to open up shop here.

The American tech giant is the only major smartphone manufacturer that doesn’t produce phones in Egypt, wth Xiaomi, Vivo, Oppo, Infinix, Nokia, and Samsung having now all established factories in the country.

HAPPENING THIS WEEK-

#1- House committee to discuss next fiscal year’s budget: The House of Representatives’ Budget Committee will hold 21 meetings this week to discuss the state budget for fiscal year 2024-2025. The meetings, which kick off today and wrap up on Thursday, will focus on allocations for each ministry and other state bodies.

Remember: Finance Minister Mohamed Maait delivered his budget statement to the House last month, giving us our first proper look at the draft budget for next year. The Madbouly government sees the economy growing at a 4.2% clip in the next fiscal year and expects headline inflation to average 17.9% over the 12-month period.

What’s next? The budget should go up for a vote at the general assembly before the start of the new fiscal year on 1 July. If the budget doesn’t pass before 30 June, the current budget rolls forward to direct state spending until the new document is passed.

#2-The IFC’s Africa VP is in town: International Finance Corporation (IFC) Vice President for Africa Sérgio Pimenta is in Cairo today and tomorrow to meet with senior figures in the public and private sectors and other development organizations to identify ways to support the state’s privatization program, the IFC said in a statement.

Remember: The IFC was tasked with giving “technical assistance and advisory support” on the state’s privatization program in an agreement inked last year. The two have been assessing an additional 50 state-owned companies to include in the privatization program to determine which sectors would be more attractive and lucrative.

We should be in line for some announcements: Pimenta is expected to sign several agreements supporting key sectors including finance, fintech, and healthcare, according to the statement.

#3- The Senate is back in session and tax incentives are on the agenda: The Senate reconvenes today and tomorrow and will discuss a report on the role of tax and fiscal policies in attracting foreign investment to Egypt

The pitch: The report proposes that the country should be “offering greater tax incentives to attract local and foreign investors to strategic and promising sectors like the fintech sector and help the private sector build partnerships that support economic development and raise growth rates.”

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

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PSA-

Uber introduces audio recording feature as an additional safety measure: Uber Egypt has added a feature to its app that will allow customers and drivers to record the audio during trips, according to a statement (pdf) from the ride-hailing giant. The encrypted audio file will be stored on the rider or driver’s phone and will only be accessible by Uber following a safety report.

WEATHER- Keep your sunnies at hand. We’re in for another sunny day in the Capital today, with a high of 29°C and a low of 17°C, according to our favorite weather app.

It’s a little cooler in Alexandria, with a high of 24°C and a low of 16°C.

CIRCLE YOUR CALENDAR-

Egyptian, Jordanian businessmen to meet next month: Egypt and Jordan will hold a joint forum for businessmen in June to encourage trade and cooperation between the two countries’ private sectors, a cabinet statement said after the Joint Egyptian-Jordanian Higher Committee met on Thursday.

*** We’ve got the rundown of all the important agreements to come out of the meeting in the news well below.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

ATTENTION, EGYPT INVESTORS-

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

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

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

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

WAR WATCH-

Israel orders more evacuations: Israel yesterday ordered Palestinians to evacuate more areas in Gaza’s southern city of Rafah, forcing tens of thousands more people to clear out as it gears up to expand its military operation there. The Israeli military also said it would return to northern Gaza’s Jabalia area where it says Hamas has regrouped to seize control of the area. Over 80k people left Rafah last week, according to UNRWA. (Bloomberg | Reuters).

Cairo ices out Israel: Egypt has refused to coordinate with Israel over the Rafah crossing due to “Israel’s unacceptable escalation,” Al Qahera News reported yesterday, citing what it says is a senior Egyptian official (watch, runtime: 0:38).

MEANWHILE- UN General Assembly votes in favor of Palestinian membership: The UN General Assembly on Friday voted by a wide margin on a draft resolution to upgrade Palestine’s rights and recommended that the UN Security Council reconsider Palestine’s request for full UN membership “favorably.”

THE BIG STORY ABROAD-

IN BUSINESS- The United States is about to slap a tariff of up to 100% on Chinese electric vehicles in a bid to protect its domestic EV industry from subsidized competition. The Biden administration will announce the move on Tuesday, the Financial Times reports this morning.

“All we do is complain while China advances,” writes Kevin Williams in Inside EVs after a trip to Beijing. Read: I went to China and drove a dozen electric cars. Western automakers are cooked. Need more background on what’s going on in the global EV market? Check out last Thursday’s Big Story Abroad here.

AND- UAE Foreign Minister Sheikh Abdullah bin Zayed swatted away Israeli claims that the UAE would be part of a post-conflict administration for Gaza, writing late Saturday night in a post on X that Netanyahu “does not have any legal capacity to take this step. The UAE refuses to be drawn into any plan aimed at providing cover for Israel’s presence in the Gaza Strip.”

IN TECH- OpenAI isn’t launching ChatGPT-5 or search engine, but will unveil on Monday “some new stuff we think people will love. Feels like magic to me,” CEO Sam Altman wrote on X. Reuters had earlier reported the AI company was launching a search engine to rival Google.

Google, meanwhile, will kick off its Google I/O conference tomorrow morning. Expect plenty of talk about (not around — about) AI.

AND- Apple is still in talks with OpenAI and Google to put their chatbots on the iPhone, Bloomberg reports.

ENTERPRISE IS LOOKING FOR SMART, TALENTED PEOPLE of all backgrounds to help us build some very cool new things. Enterprise — the essential morning read on all the important news shaping business and the economy in Egypt and the region — is looking for writers, reporters and editors to help us build out new publications.

NEVER WORKED IN A NEWSROOM BEFORE? We have the Enterprise Business Writing Development Program. Whether you are a recent graduate, an industry vet, or looking to switch careers, the Enterprise Business Writing Development Program will give you the tools you need to tell the most important stories to our audience of C-suite officials, government ministers, diplomats, financiers, investors and entrepreneurs.

Not an internship program — a career: The three-month program will see full-time, paid participants take part in workshops and lectures from veteran business journalists on subject matter knowledge, while also working on constructing and filing Enterprise stories that will run on any of our publications. Those who have successfully completed the program, will then be given long-term job offers.

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

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Egypt’s inflation cools for the second consecutive month to 32.5% in April

Inflation continues to ease in post-float Egypt: Annual urban inflation cooled to 32.5% in April, down from 33.3% in March on the back of slower food price increases as traders continued to price in a lower exchange rate than in the now-defunct parallel market, according to figures from state statistics agency Capmas.

You can thank food and beverage prices: Food and beverage prices — the largest component of the basket of goods and services used to calculate headline inflation — continued to rise but at a rate of 40.5% y-o-y — a 4.5 percentage point drop from the previous month.

Food and beverage prices fell on a monthly basis, with prices dipping 0.9% in April, from the month before, marking the first month of deflation since August 2021.

But for all items, monthly inflation inched up slightly, nudging up 0.1 percentage point to 1.1% after reaching a six-month low of 1.0% in March.

Core inflation also declined: Annual core inflation — which excludes volatile items such as food and fuel — slowed to 31.8%, down from 33.7% in March, according to data from the Central Bank of Egypt. Monthly core inflation, meanwhile, fell to 0.3%, down from 1.4% in March.

This month’s inflation data is in line with analyst expectations: A Reuters poll of 17 analysts saw headline inflation declining to 32.8%, while 10 out of 13 analysts polled by CNBC Arabia forecasted inflation slowing between 0.5 to 1.5 percentage points.

It looks like the state’s war on commodity prices helped offset the effect of price hikes at the gas station: The state’s initiative to bring down commodity prices by up to 30% that it launched during Ramadan has likely helped counterbalance fuel price hikes that came into effect in March, EFG Hermes’ Mohamed Abu Basha told Bloomberg.

Egypt’s foreign debt rose USD 3.3 bn in 1H FY 2023-24

Foreign debt rises during 1H FY 2023-24: Egypt’s foreign debt hit USD 168 bn during the first half of the current fiscal year, rising USD 3.3 bn compared to the USD 164.7 bn recorded at the end of fiscal year 2022-2023, according to central bank data (pdf).

The breakdown: Medium- and long-term debt accounted for over 81% of our total foreign debt, sitting at USD 136.8 bn, while short-term debt accounted for USD 29.5 bn. The central bank is projecting that we will repay some USD 36.4 bn — 21.7% of our total foreign debt — of the medium- and long-term debt in 2024.

We expect things to look different in the coming report as USD 11 bn of our external debt will be written off thanks to the USD 35 bn Ras El Hekma agreement inked earlier this year.

Remember: Egypt’s external debt has quadrupled over the past decade, reaching a record high of USD 165.4 bn at the end of 3Q 2023 due to increased borrowing from multilateral lenders and international debt markets.

Egypt’s Eva Pharma gears up to roll out veterinary vaccines from its new complex

Made-in-Egypt veterinary vaccines: Eva Pharma’s veterinary pharma arm, Eva Pharma Animal Health, completed the first phase of its veterinary vaccine complex in 6th of October, Managing Director Ahmed Waked told Asharq Business. The first of its products — poultry vaccination against the bird flu — will hit the market later this month.

The price tag? The company has already invested EGP 980 mn on the first phase of the EGP 1.8 bn complex — excluding tech and scientific research investments.

What’s next? Eva Pharma Animal Health plans to inaugurate three more phases to the complex over the coming six years, which will produce vaccines for cattle and poultry, Waked said. The company also wants to double the complex’s production capacity to 2.4 bn doses per year by 2028, half of which will be earmarked for exports.

Tapping into the Saudi market: The veterinary drugmaker wants to export its vaccines to the Saudi market by the beginning of 2025, Waked said, adding that the firm is currently working to meet the technical requirements that will allow it to enter the Kingdom.

ICYMI: Eva Pharma inked an agreement with the Saudi Authority for Industrial Cities and Technology Zones in September to build a USD 133 mn industrial complex for pharma research and manufacturing in the Saudi Sudair Industrial City. The complex will kick off the first phase of operations in April 2025 and will reach full operational capacity the following year.

The situation in Gaza once again dominates the Egyptian airwaves

The nation’s talking heads continued to hone in on the war in Gaza, while Amr Adib forayed into a discussion of the government’s efforts to attract the likes of tech giant Apple into the Egyptian market.

“Israel has begun the real extermination in Gaza,” political researcher Mahmoud Mohieldin told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 4:17). The Israeli army is waging war on every corner of the strip, carrying out expanded military operations in northern, central, and southern Gaza, Mohieldin said.

Humanitarian aid is in jeopardy: The continuation of Israeli military operations in Rafah at this scale would end humanitarian aid operations, UNRWA Media Advisor Adnan Abu Hasna told El Hadidi (watch, runtime: 7:16). An Israeli offensive in Rafah would be catastrophic because the city houses all of UNRWA’s relief operation centers, he said. “We have hours before we completely run out of fuel and 48 hours before we run out of food supplies,” he said.

** We have the latest on the situation in Gaza in the news well, above.

ELSEWHERE ON THE AIRWAVES- Apple in Egypt? El Hekaya’s Amr Adib turned his focus to the government's efforts to attract international companies into the local market, with a particular interest in US tech giant Apple (watch, runtime: 22:52). Adib argued that attracting foreign investment requires the state to first establish a strong industrial base, questioning what would happen if Apple entered the market amid a shortage of production supplies and a lack of infrastructure.

Greece will be employing Egyptian farmers to help fill labor shortage

LABOR-

Greece to fill labor shortage with Egyptian farmers: Greece will be employing over 5k Egyptian farm workers starting this summer for temporary agricultural work as part of an agreement signed in 2022 with Egypt, the Greek Migration Ministry said in a statement. There’s also early-stage plans to roll out the plan to Greece’s construction and tourism sectors.

Remember: One of the six pillars of Egypt’s joint strategic and comprehensive partnership with the EU was concerned with migration and mobility and involves using work programs and other legal pathways to tackle irregular migration into the bloc.

MANUFACTURING-

Prometeon eyes big investment in Egypt: US-based tire manufacturer Prometeon Tyre plans to invest EUR 100 mn in Egypt over the next five years to boost production and support research and development, the group’s CEO Roberto Righi was quoted as saying by Al Mal.

Refresher: Prometeon said in late 2022 it would invest EUR 30 mn to ramp up production at its Alexandria plant.

STARTUPS-

DisrupTech readies funds for Egyptian tech startups: Local VC DisrupTech Ventures wants to pour USD 17 mn into startups by mid 2025, with an eye on “Egyptian companies working in digital transformation services," founder and managing partner Mohamed Okasha told Asharq Business.

The Cairo-born and -based VC has already had a busy 2024: Disruptech led both fintech startup Bokra’s USD 4.6 mn pre-seed round in April and edtech startup Sprints’ USD 3 mn bridge financing round in March.

OUTSOURCING-

An outsourcing freezone? The government is looking into setting up its first freezone for outsourcing services over the coming year, Al Borsa reports, citing informed sources. The Madbouly government has already started on the feasibility study for the zone and plans to complete it in September. The government has plans to set up 56 outsourcing service centers “over the coming period.”

Remember: The government wants to nearly triple outsourcing exports to USD 13 bn by 2030.

Spinneys share jump on market debut

Spinneys’ shares rose up to 11% on its trading debut on the Dubai Financial Market (DFM) on Thursday, before settling up nearly 5% at AED 1.6. Shares opened at AED 1.7, up from the final set price of AED 1.53. The IPO had raised AED 1.38 bn after receiving more than AED 71 bn in orders, marking a successful, rare listing of a private family business in Dubai.

This marks the third successful IPO of the year in the UAE, following Parkin and Agility Global’s successful debuts. Parkin had raised some AED 1.57 bn as the first IPO of the year in the country, while Agility Global’s technical listing on the ADX saw its share price jump more than fourfold on its first day of trading.

Advisors: Our friends at HSBC Middle East are joint global coordinators alongside Emirates NBD Capital and Merrill Lynch. Our friends at EFG Hermes are joint bookrunners, while Rothschild Middle East is independent financial advisor. Emirates NBD Capital is also acting as listing advisor, while Emirates NBD Bank is lead receiving bank. Other receiving banks include our friends at FAB as well as MBank and Commercial Bank of Dubai.

EGX30	26,003	+0.1% (YTD: +4.5%)
USD (CBE)	Buy 47.27	Sell 47.40
USD (CIB)	Buy 47.30	Sell 47.40
Interest rates CBE	27.25% deposit	28.25% lending
Tadawul	12,284	-1.4% (YTD: +2.7%)
ADX	9,090	-0.3% (YTD: -5.1%)
DFM	4,173	-0.2% (YTD: +2.8%)
S&P 500	5,223	+0.2% (YTD: +9.5%)
FTSE 100	8,434	+0.6% (YTD: +9.1%)
Euro Stoxx 50	5,085	+0.6% (YTD: +12.5%)
Brent crude	USD 82.79	-1.3%
Natural gas (Nymex)	USD 2.25	-2.1%
Gold	USD 2,375.00	+1.5%
BTC	USD 61,013	+0.8% (YTD: +44.2%)

THE CLOSING BELL-

The EGX30 rose 0.1% at Thursday’s close on turnover of EGP 2.8 bn (42.8% below the 90-day average). Local investors were net buyers. The index is up 4.5% YTD.

In the green: Egypt Kuwait Holding -EGP (+7.2%), Abu Qir Fertilizers (+3.2%), and Ezz Steel (+2.1%).

In the red: Qalaa Holdings (-7.5%), Orascom Construction (-3.3%), and Telecom Egypt (-2.0%).

Trade, media cooperation, and Gaza reconstruction topped the agenda of the Joint Egyptian-Jordanian Higher Committee

Egypt, Jordan eye stronger trade relations: The Joint Egyptian-Jordanian Higher Committee agreed to encourage trade between the two sides and discussed the establishment of a private-sector-led joint logistics zone, according to a cabinet statement released after the committee wrapped its meetings on Thursday.

Media protocols signed: Prime Minister Moustafa Madbouly and his Jordanian counterpart Bisher Khasawneh signed a cooperation agreement to work together on media issues, including the regulation of electronic and children’s media, a second cabinet statement said

Post-war Gaza: “We must now look at the post-war phase and reconstruction efforts to restore basic services in the Gaza Strip, which will prevent any plans to displace the population of Gaza,” Madbouly said. It will not be possible to begin reconstruction initiatives until the end of the war and the ceasing of aggression in Gaza, Khasawneh added, estimating the reconstruction efforts to total USD 90 bn.

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.

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.

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.

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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