Latest news with #FaroukSoussa
Zawya
5 days ago
- Business
- Zawya
Egypt details economic strategy, private sector empowerment to Goldman Sachs
Egypt's Minister of Planning, Economic Development and International Cooperation, Rania Al-Mashat, has outlined the country's economic reform progress and government efforts to empower the private sector and increase investment during a meeting with a Goldman Sachs delegation. The delegation included Farouk Soussa, Chief Economist at Goldman Sachs International Financial Institution, and other bank officials. The meeting reviewed key developments in the Egyptian economy and state initiatives aimed at improving the business environment and creating an investment climate attractive to local and foreign investors, thereby enhancing macroeconomic stability. Al-Mashat emphasised that strengthening macroeconomic stability has been a governmental priority since the inception of the economic reform programme, aiming to boost confidence and credibility in the Egyptian economy. 'Maintaining macroeconomic stability is a priority through continuous structural reforms,' Al-Mashat stated. The minister highlighted that current government priorities include sustaining macroeconomic stability and implementing the national programme for structural reforms. This programme is centred on three main pillars: promoting the resilience and stability of the macroeconomy, improving the business environment and investment climate, and advancing the transition to a green economy. Within this framework, Al-Mashat noted that various national entities are implementing numerous measures and policies to enhance public finance discipline and reduce burdens on investors. She mentioned that, for the first time, the state is working to consolidate all fees borne by investors into a single framework, following directives from President Abdel Fattah Al-Sisi. Furthermore, the government has established a national committee focused on the World Bank's Business Ready (B-Ready) report, which will measure and monitor regulations to improve the business environment and support the competitiveness of the Egyptian economy. Al-Mashat also referred to ongoing procedures to promote the transition to a green economy. The minister elaborated on the national strategy for economic development, affirming the state's determination to shift the Egyptian economic growth model towards one based on tradable and export-oriented sectors. 'We are working to elevate the Egyptian economic model to achieve investment and production-driven growth,' she said. Al-Mashat pointed to positive developments in the first half of the current fiscal year, which demonstrated positive growth with a qualitative change, led by the non-petroleum manufacturing sector, tourism, transport and storage, and information and communications technology. This occurred despite regional and global geopolitical tensions. Reviewing relationships with international institutions and development partners, Al-Mashat highlighted their role in driving finance for development, particularly for the private sector. She noted a positive change in the volume of financing alongside economic and structural reform measures, which contributed to an increase in such financing to approximately $4.2bn by the end of last year, surpassing government financing for the first time. The minister also outlined ongoing negotiations with the European Union to implement the second phase of the macroeconomic assistance mechanism and budget support, valued at €4bn. Al-Mashat addressed state measures to empower the private sector and create space for local and foreign investments through the implementation of the State Ownership Policy Document. She explained that the state is focusing on three pillars in this regard. The first is the sovereign fund, which aims to increase returns on assets and maximise their utilisation for future generations. This works alongside the government offerings unit at the Cabinet. The second element involves 'issuing the State-Owned Companies Law to maximize returns on assets and open up space for the private sector,' as Al-Mashat put it. She clarified that this law, currently under debate, concerns the management of or participation in state-owned companies and will enable the establishment of a unit to inventory and monitor these companies. This unit will undertake tasks including determining optimal methodologies for dealing with these companies to enhance private sector empowerment efforts. The third pillar involves partnerships, such as the one with the International Finance Corporation (IFC), which provides advisory services to strengthen public-private partnerships (PPP) in the airport sector. This aims to improve infrastructure, connectivity, and passenger services. © 2024 Daily News Egypt. Provided by SyndiGate Media Inc. (
Zawya
5 days ago
- Business
- Zawya
Minister of Planning, Economic Development Meets Goldman Sachs Delegation to Review Progress in the Egyptian Economy and Government Efforts to Empower the Private Sector and Increase Investment
H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development and International Cooperation, met with H.E. Mr. Farouk Soussa, Chief Economist at Goldman Sachs International Financial Institution, and a number of bank officials. The meeting reviewed key developments in the Egyptian economy and the state's efforts to improve the business environment and create an investment climate to attract local and foreign investments and enhance macroeconomic stability. During the meeting, H.E. Dr. Rania Al-Mashat emphasized that since the beginning of the economic reform program, the government has prioritized strengthening macroeconomic stability, to boost confidence and credibility in the Egyptian economy. H.E. Minister Al-Mashat pointed out that the government's priorities include maintaining macroeconomic stability and implementing the national program for structural reforms. This program focuses on three key pillars: promoting the resilience and stability of the macroeconomy, improving the business environment and investment climate, and driving the transition to a green economy. H.E. Dr. Al-Mashat noted that within the framework of the program, varous national entities are implementing dozens of measures and policies that enhance public finance discipline and reduce burdens on investors. For the first time, the state is working to consolidate all fees borne by investors to unify them into a single framework, following the directives from H.E. President Abdel Fattah El-Sisi. The government has also formed a national committee concerned with the Business Ready (B-Ready) report, issued by the World Bank, which will measure and monitor the regulations to improve the business environment and support the competitiveness of the Egyptian economy, and referred to the ongoing procedures to promote the transition to a green economy. H.E. Dr. Al-Mashat highlighted the national narrative for economic development and the state's determination to transform the Egyptian economic growth model to be based on tradable and export-oriented sectors. She pointed to the positive developments in the first half of the current fiscal year, which showed positive growth with a change in the quality of growth, led by the non-petroleum manufacturing sector, tourism, transport and storage, and information and communications technology, despite geopolitical tensions in the region and the world. H.E. Minister Al-Mashat also reviewed the strong relationships with international institutions and development partners to drive finance for development, particularly for the private sector, and the positive change in the volume of financing alongside economic and structural reform measures. This contributed to an increase in financing to approximately $4.2 billion by the end of last year, exceeding government financing for the first time. She outlined the ongoing negotiations with the European Union to implement the second phase of the macroeconomic assistance mechanism and budget support worth €4 billion. H.E. Dr. Al-Mashat addressed the state's measures to empower the private sector and make room for local and foreign investments through the implementation of the State Ownership Policy Document. She highlighted that the state is working on three pillars in this context: first, the sovereign fund, which aims to increase returns on assets and maximize their utilization for future generations, alongside the government offerings unit at the Cabinet, as well as the currently debated law concerning the management of or participation in state-owned companies. This law will enable the establishment of a unit to inventory and monitor state-owned companies, which will undertake many tasks, including determining the best methodologies for dealing with companies to enhance private sector empowerment efforts. At the same time, she pointed to the partnership with the International Finance Corporation (IFC), which provides advisory services to strengthen public-private partnerships (PPP) in the airport sector, to improve infrastructure, connectivity, and passenger services. Distributed by APO Group on behalf of Ministry of Planning, Economic Development, and International Cooperation - Egypt.
Zawya
07-03-2025
- Business
- Zawya
Egypt's lucrative carry trade in the balance after recent dips
CAIRO: Analysts and bankers expect foreign investors to largely roll over their holdings of Egyptian treasuries one year after an IMF deal and record UAE investment rescued a faltering economy. Local currency T-bills worth 1.08 trillion Egyptian pounds ($21.3 billion) are due to mature in March. Most are one-year bills bought soon after Egypt signed an $8 billion financial support agreement with the International Monetary Fund on March 6, 2024, according to estimates from one Egypt-based banker. The T-bill carry trade has provided the government with an ample, albeit expensive, way to help plug a current account deficit that ran at $5.91 billion in the third quarter of 2024, the latest data available. It has also provided investors with healthy returns. The central bank has not reduced interest rates, despite a marked decline in inflation. Some foreign investors have already pared back holdings, pulling several hundred million dollars out of Egyptian treasuries last month after the U.S. issued a broad freeze on foreign aid and said Egypt and Jordan should take in Palestinians from war-ravaged Gaza, bankers said. In December, the maturing of around $20 billion in nine-month treasury bills resulted in a net outflow of around $2 billion, a second banker estimated. "The concentration of foreign ownership is relatively low, which should limit the potential outflows," said Farouk Soussa of Goldman Sachs. "At the peak before last year's sell-off there was something like $18 billion to $19 billion in foreign holdings of local T-bills and bonds. Today, that is more like $10 billion to $11 billion. If anything, there is scope to add EGP exposure, not reduce." 'STILL LUCRATIVE' Foreign investors use dollars to buy local currency then T-bills, taking advantage of high local interest rates and a stable exchange rate to convert funds back at a profit once the bills mature. A one-year bill purchased on March 11, 2024, earned an average yield of 32.3%, although this has gradually fallen to 25.6% at the most recent sale on Tuesday. The exchange rate has shifted slightly to 50.7 pounds to the dollar from 49 pounds over the same period. "We will see some profit taking for sure but others will still stay as the differential continues to be lucrative," said a senior banker, declining to be named because they were not authorised to speak with media. "I think watching the interest rate and waiting for profit realisation on the back of (interest rate) cut is more tempting," he said. Others are more cautious. JPMorgan's Gbolahan Taiwo said investors had recently cut their bullish positions in Egypt. "We roll our maturing Egypt T-bill trade into a 12-month NDF," (non-deliverable forward, or currency trade contract) said Taiwo, adding this would now offer a "decent" yield pick-up. "We expect Egypt's strong performance to continue." IMF REVIEW Egypt negotiated the IMF deal following an acute currency crisis and after the war in Gaza ate into tourism and Suez Canal revenues. Canal fees, a main source of foreign currency, plunged to $931 million in the third quarter of 2024 from $2.40 billion a year earlier. The IMF executive board is due to meet on Monday to approve the fourth review of last year's Extended Fund Facility arrangement, potentially unlocking a $1.2 billion disbursement. Egypt and the IMF reached a staff-level agreement on the fourth review in December, but final board approval has been delayed in part after Egypt fell short on a primary surplus indicator and asked for a waiver, which is expected to be granted, according to a source with knowledge of the negotiations. The board on Monday is also likely to approve additional financing under its Resilience and Sustainability Facility, the source added. Egypt expects to receive up to $1 billion from the facility. The IMF loan followed a record $35 billion investment deal with the United Arab Emirates and coincided with a sharp currency devaluation and a 600-basis-point increase in the central bank's overnight interest rates. The central bank's Monetary Policy Committee next meets on April 17. ($1 = 50.6200 Egyptian pounds) (Reporting by Patrick Werr; Additional reporting by Karin Strohecker; Editing by Aidan Lewis)
