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IMF expects Egypt’s debt to decline to 74% of GDB by 2022/2023

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CAIRO – 6 April 2019: The International Monetary Fund (IMF) reported that Egypt’s total public debt is projected to continue to shrink to about 74% of the gross domestic product (GDP) by 2022/2023 given the implementation of the economic reform program.

The figure is expected to be driven by the recovery of tourism, construction, expansion in the gas extractives and investment sectors and proceeding with the implementation of strong structural reforms.

In its statement released on Saturday on the fourth review of Egypt’s Extended Fund Facility arrangement, the IMF said that the country’s economic growth is still expected to reach 6 percent in the medium term.

Meanwhile, Egypt’s inflation rate is expected to range between 13 and 14% by the end of the current fiscal year, the IMF added.

Monetary policy remains anchored by the medium-term objective of bringing inflation to single digits. The recent pick-up in headline inflation reflected temporary increases in food and energy prices, but a restrictive monetary policy stance has helped to reverse the increase and keep core inflation well anchored.

The authorities have taken important steps to deepen the foreign exchange market and allow greater exchange rate flexibility, including by eliminating the repatriation mechanism.

While the outlook remains favorable, a more difficult external environment poses new challenges as global financial conditions have tightened. Egypt has successfully weathered recent capital outflows, but consistent policy implementation will be essential to further strengthen policy buffers, including by containing inflation, enhancing exchange rate flexibility, and reducing public debt.

Egypt embarked on a bold economic reform program that included the introduction of taxes, such as the value-added tax (VAT), and cutting energy subsidies, with the aim of trimming the budget deficit.

The country floated its currency in November 2016 before it clinched a $12 billion loan from the International Monetary Fund (IMF).

– EGYPT TODAY

Economy

SA Chamber’s data shows business confidence waned in May

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JOHANNESBURG – South Africa’s business sentiment and conditions deteriorated in May, data from the South Africa Chamber of Commerce and Industry (Sacci) and Standard Bank showed.

Sacci’s business confidence index waned from 93.7 points in April to 93 points in May on the rand’s depreciation against the major currencies with the decline of the JSE all-share index, poor vehicle sales and depressed retail sales weighing further on sentiment.

Sacci chief executive Alan Mukoki said although business confidence was not at an ideal level, there was a positive mood coupled with hopes that President Cyril Ramaphosa would drive a positive growth of the economy.

“There are still uncertainties about physical electricity supply, and this factor alone has the highest and immediate impact on business, consumer and investor confidence. This, among several other factors, needs urgent attention,” Mukoki said.

“Public sector financial challenges at all levels of government as well as some state-owned enterprises also call for urgent remedies by the new administration.”

The local bourse endured a torrid month shedding more than 4 percent, with Naspers responsible for a quarter of the loss as it slumped 10 percent last month due to its biggest subsidiary, Tencent, plummeting 14 percent in local currency-terms as Chinese markets bore the brunt of trade-war escalations between the worlds two biggest economies.

Dave Mohr from Old Mutual Multi-Managers, in an investment note, said that May was a gloomy month for the JSE.

“In rand, the JSE All Share Index lost 4.8 percent in the month, which reduced 2019 returns to 7.1 percent. This is still ahead of cash, but over one year local cash has beaten equities,” Mohr said.

The National Association of Automobile Manufacturers of South Africa yesterday said new vehicle sales fell 5.7 percent on a yearly basis in May with 40 506 units sold compared to the 42 950 vehicles sold in May last year. Export sales were also down for the first time this year, declining 8.8 percent.

Meanwhile, the Standard Bank Purchasing Managers Index, which gauges private sector activity, slid back into contraction territory in May, following a slight expansion in April. The index declined from 50.3 the prior month to 49.3.

Standard Bank said businesses were hampered by a faster drop in new orders and a fourth successive fall in export sales, leading them to reduce output and cut back on purchases.

David Owen, economist at IHS Markit, which compiles the index, said firms however remained hopeful that the new government would bring some much-needed stability to the markets.

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“Future sentiment rose to the highest for 13 months, showing that there is still confidence in the South African economy.

“Nevertheless, recent PMI readings show that the government faces a difficult struggle to reignite growth this year,” Owen said.

The South African Revenue Service said last week that South Africa’s trade balance unexpectedly swung to a deficit in April, recording a gap of R3.4 billion against market expectations of a R1.6bn surplus.

BUSINESS REPORT

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Economy

German Businesses to Partner with Angola in Economic Diversification

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Source: African Energy Chamber

This is one of the best platforms for German investment, cutting-edge technology and service providers to engage in Africa’s second-largest oil producing market

BERLIN, Germany, May 27, 2019 – The Germany Africa Business Forum (GABF) proudly endorses the Angola Oil & Gas Conference 2019, organized by Africa Oil & Power and taking place in Luanda on June 4-6, 2019. This is one of the best platforms for German investment, cutting-edge technology and service providers to engage in Africa’s second-largest oil producing market.

Since swearing into office, President João Lourenço has galvanized his country’s oil and gas sector, business opportunities and foreign investment with its transformational government reforms. The move supports the government’s quest of diversifying the economy via the development of export-oriented industries and other commodities that will benefit all Angolans and increase the ability of employers to further generate more opportunities for citizens, investors and the African region at large.

Sebastian Wagner, CEO of DMWA Resources and Co-Founder of the Germany Africa Business Forum, said: “President João Laurenço’s focus on creating an enabling environment for investors is resonating with German entrepreneurs and institutional investors. He has matched the rhetoric with substance through reforms. Germany’s business and economic interests in energy especially gas is served when Germans invest in Angola’s economic diversification drive and also technology transfer. Germans will play a strong role in the midstream, downstream, power and petrochemical projects in Angola.”

With a resurgent economy, Angola is one of the most lucrative business locations in Africa. With its upcoming Marginal Fields Bidding Round, ongoing licensing of several blocks from this year onwards, and numerous opportunities across the gas value-chain, Angola has become one of the most attractive markets for oil investors.

“We are very focused when it comes to supporting government and the oil industry in accomplishing the right reforms that will help German companies succeed in Angola. German businesses can work with Angola in the power sector, petrochemicals, oil and gas infrastructure,” stated Sergio Pugliese, President of the African Energy Chamber (www.EnergyChamber.org) in Angola. “German businesses can have a huge impact through their ability to grow and create jobs, to address a lack of enabling infrastructure and to increase efficiency,” added Sergio Pugliese.

During the visit of the former President José Eduardo dos Santos in Berlin, the Federal State of Germany and the Republic of Angola signed a bilateral commercial agreement, strengthening German-Angolan relations, which resulted in initiatives such as the educational cooperation between the Goethe Institut and the German Ministry of Economics.

The Germany Africa Business Forum advocates for German companies, entrepreneurs and Influencers to sojourn with us, on the chartered road to the Angola Oil & Gas Conference 2019 in Luanda. “Manufacturing, technology and increased power generation will be part of Angola’s economic resurgence. German businesses have a strong role to play in this and we welcome them at Angola Oil & Gas 2019,” said Guillaume Doane, CEO of Africa Oil & Power.

For registration and more information: https://bit.ly/2ze4oDZ

African Energy Chamber

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Economy

Jordanian, Egyptian, Iraqi meeting to discuss economic cooperation

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President Abdel Fatah al-Sisi receives his Jordanian counterpart King Abdullah II – Press Photo

AMMAN – 9 May 2019: A Jordanian-Egyptian-Iraqi meeting discussed in Amman on Thursday preparation of plans and mechanisms to implement what was agreed upon during the three-way summit held recently in Cairo between King Abdullah II, Egyptian President Abdel Fattah El Sisi and Iraqi Prime Minister Adel Abdul Mahdi.

The meeting, which brought together Minister of Industry and Trade, Tarek Al-Hammouri, Iraqi Minister of Industry and Minerals Saleh Al-Jubouri and Egyptian Minister of Trade and Industry Amr Nassar, reviewed the mechanisms of enhancing economic integration and cooperation, including the promotion and development of cooperation in industrial fields and joint industrial zones.

It also discussed cooperation in the sectors of energy and infrastructure, reconstruction as well as increasing trade exchange.

The ministers agreed to facilitate trade and increase the volume of trade between the three countries, enhance integration and cooperation in the field of energy (oil pipeline, electric linkage), achieve industrial integration among the three countries, and develop joint industrial zones.

Al-Hammouri said the meeting comes to build on the trilateral summit of the leaders of our countries and to institutionalize joint cooperation and coordination efforts. “The meeting represents an important opportunity to translate the special relations between the three countries into fruitful and constructive cooperation in the economic, trade and investment fields,” he added.

For his part, Egyptian Minister of Trade and Industry Amr Nassar said that the meeting reflects the interest of our countries to follow up on the results of the tripartite summit held in Cairo, calling for building strategic partnership relations between Jordan, Egypt and Iraq in the economic and trade fields.

Iraqi Minister of Industry and Minerals Saleh Al-Jubouri also stressed the importance of the meeting to following up on the results of the three-way summit held recently in Cairo and working together to implement items that have been agreed upon.

Egypt Today

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