{"id":549061,"date":"2022-09-01T03:30:54","date_gmt":"2022-09-01T03:30:54","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/09\/01\/this-morning-fresh-measures-to-ease-imports-crisis-could-be-on-their-way-the-social-safety-net-widens-today\/"},"modified":"2022-09-01T03:30:54","modified_gmt":"2022-09-01T03:30:54","slug":"this-morning-fresh-measures-to-ease-imports-crisis-could-be-on-their-way-the-social-safety-net-widens-today","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/09\/01\/this-morning-fresh-measures-to-ease-imports-crisis-could-be-on-their-way-the-social-safety-net-widens-today\/","title":{"rendered":"THIS MORNING: Fresh measures to ease imports crisis could be on their way + The social safety net widens today"},"content":{"rendered":"

Good morning, wonderful people, and welcome to September. <\/strong>We hope those of you whose kids are not already back in school are able to enjoy what we think is effectively the last weekend of summer.<\/p>\n

We have a busy news well and an absolutely packed What We\u2019re Tracking Today for you<\/strong>, so read on, friends, and we\u2019ll get to the weekend soon enough.<\/p>\n

Oh, and before you do: A huge THANK YOU to all of you <\/strong>who have written in with kudos, comments and suggestions for Enterprise Climate. We\u2019ll get back to each and every one of you in the coming days. Writing to you folks each day is the highlight of our professional career. \"?\"<\/p>\n

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WATCH THIS SPACE #1- It looks like the<\/strong> IMF has just concluded its second bailout in four <\/strong>days: <\/strong>The IMF will today announce a preliminary agreement for an emergency loan to Sri Lanka, Reuters<\/a> reported overnight, citing four sources it says are close to the talks. The sources didn\u2019t disclose the size of the program. Sri Lanka is facing its worst economic crisis in over seven decades and in July defaulted on its debt<\/a> for the first time in its history.<\/p>\n

This comes just a few days after the Fund came to an agreement with Pakistan<\/strong> for a USD<\/a>1.1 bn loan package<\/a> to save the country from default.<\/p>\n

Are we next in line?<\/strong> We\u2019re still ironing out the final details<\/a> of our own IMF facility, which BNP Paribas is now predicting will be in the USD 3-5 bn ballpark and could be announced in September or October. We have the full rundown in this morning\u2019s Economy section, below.<\/p>\n

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<\/a> WATCH THIS SPACE #2- More measures <\/strong>to ease the import bottlenecks <\/strong>could be imminent: <\/strong>The Central Bank of Egypt could announce today or tomorrow its own measures to tackle the crisis in Egypt\u2019s ports, where thousands of containers have been prevented from entering the country due to import restrictions introduced in March to address a shortage of foreign currency. This came from the head of the Customs Authority, El Shahat Ghatoury, who told Salet El Tahrir yesterday that the central bank could allow importers to pay open letters of guarantee in exchange for the immediate release of their shipments until they are able to retrieve a Form 4 to receive their letter of credit (L\/C) (watch, runtime: 5:38<\/a>). This would give them a grace period of six months, he added. This came a day after the Finance Ministry announced a raft of emergency measures<\/a> to allow importers to clear shipments from the nation\u2019s ports.<\/p>\n

SPEAKING FOR ITSELF- Prime Minister Moustafa Madbouly is meeting daily with the new <\/strong>central bank governor, Hassan Abdalla, to discuss economic policy<\/strong>, cabinet said<\/a> yesterday, without giving anything else away. Abdalla\u2019s entry into the central bank<\/a> two weeks ago has brought with it speculation about a possible policy u-turn on the currency and the bank\u2019s Tarek Amer-era import rules<\/a>. A firm consensus of Egypt-watchers now expect the EGP to fall against the USD in one way or another while a number of senior government officials have in recent days telegraphed a possible relaxation of import restrictions that have prevented many importers from accessing letters of credit.<\/p>\n

Just as we were about to dig out those Ever Given memes\u2026<\/strong> A 252-meter-long Singapore-flagged oil tanker \u2014 Affinity V \u2014 was close to being renamed Ever Givem II<\/a> yesterday after it ran aground in the Suez Canal and blocked traffic. Thankfully, the Suez Canal Authority and its fleet of tug boats managed to release the vessel<\/a> after five hours, sparing us the ignominy of single-handedly halting global trade twice in two years. (AP<\/a> | Reuters<\/a> | Daily Mail<\/a>)<\/p>\n

***<\/strong>Tell us how you\u2019re feeling about your business and the wider economy<\/strong> and we\u2019ll be back with the results just in time to give you a sense of what everyone else is thinking heading into budget season.<\/p>\n

How has 2022 been for your business? And how do you feel about what\u2019s left of the year? <\/strong>Are you investing? Do you plan to hire new staff (or make cuts to your existing staff) now or in 2023? What\u2019s the USD \/ EGP rate you expect to use for your 2023 budget? Where do you see your industry as a whole heading?<\/p>\n

Make your voice heard in our Fall Reader Survey.<\/a><\/strong> It won\u2019t take more than a few minutes to complete.<\/p>\n

***<\/p>\n<\/div>\n

WHAT\u2019S HAPPENING TODAY-<\/strong><\/p>\n

<\/a> The social safety net gets a bit wider today:<\/strong> Today another 900k families will be included in the Takaful and Karama program \u2014 and ration card holders will start to receive increased allowances for the next six months.<\/p>\n

Rations are rising by more than we thought:<\/strong> Each one-family ration card will now see an EGP 300 increase in credit rather than EGP 100<\/a> as previously announced, state news agency MENA<\/a> reported yesterday.<\/p>\n

\u2026and the gov\u2019t will up its spend on bread subsidies: <\/strong>The government will Increase its allocations to the bread subsidy program by EGP 32 bn, bringing its total allocations to the program during the current fiscal year to EGP 87 bn. The measures come as the government steps up its support<\/a> to vulnerable people in response to the surging cost of living.<\/p>\n

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<\/a> M&A WATCH- We\u2019re halfway through Expedition Investment\u2019s mandatory tender <\/strong>offer for Domty<\/strong> and so far shareholders have so far agreed to sell 14.3% (40.46 mn) of their shares in the cheesemaker, Al Borsa<\/a> reported yesterday. This accounts for nearly half of the shares eyed by Expedition, which is looking to acquire 34% of the company. Shareholders have until Wednesday, 14 September<\/a> to make a decision.<\/p>\n

FinMin doubles down on fiscal discipline:<\/strong> The Finance Ministry has concluded a review of ministerial \u201cprivate funds\u201d and will move to regulate them more closely starting in January 2023, Finance Minister Mohamed Maait said in a statement<\/a>. The move comes to improve management of public finances, Maait said, without giving any more details. President Abdel Fattah El Sisi in February ratified a bill<\/a> that provides for 5-15% of the annual surplus generated by private funds to be transferred to the state treasury, which is expected to raise EGP 2.5-3 bn for state revenues.<\/p>\n

SOUND SMART- \u201cPrivate funds\u201d are ministerial-level slush funds<\/strong> through which some ministers are able to generate and retain earnings from a range of activities and then use the funds to support programs of their choosing, effectively putting those funds outside the formal budget process.<\/p>\n

A new month begins<\/strong>, kicking off our monthly list of data points to keep your eye on:<\/p>\n