Minister of Investment Ashraf Salman said the ministry will study legislation conducted by the Egyptian Financial Supervisory Authority (EFSA) to give it complete independence as a prelude to present it to the parliament soon. The suggested legislation renders EFSA an independent entity not affiliated to any governmental body, such as the Central Bank of Egypt (CBE).
Salman will discuss with CBE Governor Tarek Amer and Minister of Finance Hany Kadry Dimian ways to activate the secondary bonds market after the government presents its programme to the parliament, which is scheduled for two weeks time.
Dimian and Amer are convinced of the importance of activating the secondary bonds market that enables buying and selling governmental bonds. Salman’s statements came during a visit to Aswan on Wednesday.
Salman praised Minister of International Cooperation Sahar Nasr’s achievement of the $1bn World Bank loan. It has been decided that it will be directed to support the general budget and not to fund projects as usual with World Bank’s loans, which is contrary to the International Monetary Fund that finances budget deficits.
“Hats off to the Minister of International Cooperation for the ‘miracle’ of the World Bank loan,” Salman said, adding that the procedures of delivering the first segment of the loan are going well. The programme to offer dollar bonds in global markets is still ongoing. “We are waiting for the right time to offer the second segment.”
As a financing mechanism, Sukuk is not replacement for dollar bonds but would rather be directed to different markets and buyers from those interested in dollar bonds.
Offering the capital increase of Misr Insurance Company in the stock market was suspended. The priority now is to increase capitals of four public oil companies in the stock market. “I will not put low-quality goods into the stock exchange,” he said, adding that he will work to increase the public companies’ capitals beforehand.
The minister expected the public business sector to achieve profits estimated at approximately EGP 4bn before taxes and that reconstructing the sector will take time. He believes the dollar price alone is not the main factor influencing investors’ decision to inject investments in Egypt, where they expect higher risks in their feasibility studies. Solving current disputes will open the door for huge investments.
Current disputes under settlement will add EGP 4bn worth of investments to the country in a very short period. Salman said Egypt still achieves growth, despite the slowdown of the global economy due to crises of the Chinese economy, of which its problems affected global markets, and the drop in all global stock exchanges with the decline of oil prices.
Salman is working on solving the disputes over major companies’ lands and solving conflicts of the Saudi group Al-Sharbatly and Emirati Al-Futtaim is underway. He refused to disclose the details of these settlements to ensure their termination.
Palm Hills, one of the largest real estate development companies in Egypt, decided to distribute its liquidity in cash on all stakeholders after it achieved great revenues from its sales estimated at EGP 6.5bn despite the difficult economic circumstances, which shows optimism for the future of real estate activity.
About 35 investors obtained the conditions of contract of the new cement certificates put by the Industrial Development Authority (IDA), which means that investors are interested in increasing cement production to meet the needs of the local market, which is expected to face a shortfall in cement over the next two years.
Zara clothing company achieved its largest sales globally during its first year in Egypt, which shows that the consumer demand in Egypt is very high.
The Egyptian market has a million consumers annually, which is equivalent to the number of total consumers in four Arab countries combined. This increases the Egyptian market’s competitiveness in attracting trade companies and malls.
Salman said Egypt has about EGP 325bn outside the banking system and official channels, used in non-official economy and causes the state treasury to lose taxes, insurance, and labour. The economic growth in Egypt is based on consumption and this kind of growth must be utilised to increase production and manufacturing.
Authority over lands will belong to land owners, not the Ministry of Investment, even after the activation of the single-window system, which only puts them after they are prepared in coordination with state authorities in terms of pricing and allocation.
Salman will head a committee that organises the process of preparing lands before making them available for investors, in coordination with an international consultant.
