Business Today Egypt | December 2023

December 2023

Vol 28 Issue 10 LE 30

plus:

Gaza in the

Crossfire:

Regional

Impacts and

Economic

Boycott

Foreign exchange

Gaza War

Inflation

Inflation

Government debt

A Year of Challenges

Looking back at the domestic and global hurdles of 2023 and

Egypt’s strategy for rebounding.

In This Issue

Vol. 28

No. 10

December

2023

projects, Egypt is increasing its reliance on

renewables to cut the quantities of used

fuel, where the total capacity generated

from renewable energy on the grid is

set to reach 68,500 megawatts by 2030,

representing 42% of the total capacity on

the national power grid.

By Nourhan Magdi

18

4

Editor’s Note

38

In-Depth

Legacy in the Making: How Do Family

Businesses Contribute to Egypt’s

Economy?

Highlighting and exploring the potential

and impact of family businesses in Egypt

and how they can ensure continuity.

By Nouran Allam

8

12

18

24

28

34

In Brief

News in Focus

Egypt under Rating Agencies’ Microscope

Egypt experiences a downgrade in credit

ratings from major agencies, including

Moody’s, Fitch, and S&P Global Ratings.

By Hanan Mohamed

On the Horizon: LNG Exports Poised

for Comeback

Egypt set to resume liquefied natural gas

exports following a period of increased

Israeli gas supplies.

By Hanan Mohamed

Diversified Investments Await as Egypt

Joins BRICS

Joining the bloc carries a diversification

of options for Egypt, which would directly

benefit from the experiences of member

states in increasing manufacturing and

production rates.

By Nourhan Magdi

Spotlight

Overview of FDI Inflow in 2023

Egypt attracted billions of dollars for green

energy, logistics, and IT.

By Noha El Tawil

Expanding RE projects in Egypt: A

Green Plan with Higher Purposes

With the aim to expand renewable energy

34

38

4 December 2023

www.BusinessTodayEgypt.com

In This Issue

66

68

74

76

82

Reasons for Egypt’s Continued Adherence to the

Peace Agreement with Israel

Boycotts: Impact on Economy and Investments

GAFI Is Now in Charge of Conducting Official

Procedures on Behalf of Investors.

By Hanan Mohamed

Boycotting for Peace.. An Effective Way to Bring

About Change?

btscene

Last Word

50

44

Why Egypt is a Good Market for Real

Estate Investment?

In 2023, the real estate sector in Egypt

succeeded in attracting investors from many

countries such as the UAE, Kuwait, Saudi

Arabia, China, and the United States.

By Nourhan Magdi

50

The Know How: Localizing

the Locomotive Industry in Egypt

Why global companies are building

locomotive factories in Egypt.

By Noha El Tawil

56

54

56

64

Gaza in the Crossfire: Regional Impacts

and Economic Boycott

Israel’s war on Gaza: A Timeline of

Egypt’s Efforts

Business Today Egypt presents the timeline

and key developments of Israel’s war on

Gaza and reviews Egypt’s fundamental role

in the mediation between Hamas and Israel

to end the airstrikes.

By Jehad El Sayed and Amr Kandil

The War on Gaza: Assessing

the Impact on Neighboring Countries

As the Gaza war escalates, an early

assessment by ESCWA and UNDP

reveals potential economic upheavals in

neighboring nations.

By Hanan Mohamed

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www.BusinessTodayEgypt.com December 2023

5

Editor’s Note

Egypt’s Economic Outlook:

Challenges and

Strategies in 2024

It’s the last issue of 2023. A year that presented numerous challenges, requiring

efforts to overcome the setbacks and the Coronavirus pandemic, not to

mention the escalation of the war on Gaza that has cast a shadow over tourism

bookings and the country’s imports of natural gas.

Gas imports have dropped to zero after Israel turned off its taps, limiting efforts to

resume liquefied natural gas exports. In “On the Horizon: LNG Exports Poised for

Comeback,” Senior Writer Hanan Mohamed explores Egypt’s reliance on imports of

Israeli gas to meet a portion of its domestic demand and for re-export purposes, and

assesses the possibility of the LNG sector rebounding in the coming months.

In parallel to the downturn, Egypt’s economy has faced a rating downgrade

from several agencies, including Moody’s, Fitch, and S&P Global Ratings. All agencies

attribute the downgrade to the country’s external financing, macroeconomic

stability, and the trajectory of its already-high government debt. In “Egypt under

Rating Agencies’ Microscope,” Mohamed weighs how the rating could be raised for

Egypt if the country reduced its levels of net government debt and total external

financing needs by accelerating reforms that support competitiveness, growth, and

financial outcomes.

On another note, the recent developments in the Gaza Strip have led to a boycott

of global companies supporting Israel gaining new momentum in 2023. Many

Egyptians viewed the recent war between Hamas and Israel as an expression of

Israeli aggression against the Palestinians, leading to calls for a boycott that had

noticeable economic impacts in Israel. Israeli exports to Egypt declined by 20% in

2023, and Israeli investments in Egypt declined by 15%, according to the Egyptian

Center for Strategic Studies (ECSS).

But the calls for a boycott have faced some challenges, including the lack of sufficient

awareness among people of the importance of the boycott and how to implement

it, as well as fears that the boycott could affect the Egyptian economy, especially

in light of the rise in inflation and the decline in the value of the Egyptian pound.

On a more positive note, and with the entry of 2024, Egypt officially joins the

BRICS group, benefitting the state in “rationalizing consumption of the import

currency basket which reduces the huge pressures on the state’s general budget to

provide the basic needs of wheat and fuel due to this alliance guarantees access to

the world’s largest food basket and may allow Egypt to settle trade contracts for its

major imports using national currencies, thereby easing some pressure on foreign

currency reserves,” as Senior Writer Nourhan Magdi writes in “Diversified Investments

Await As Egypt Joins BRICS.”

According to official statements, Egypt needs to utilize this year and part of 2025

to overcome the current economic crisis and return to the economic levels of 2021.

The nation would have reduced the debt percentage to less than 75% of the GDP

if not for the global crisis, which led to an increase in inflation. It has managed to

significantly contain the surging inflation by increasing subsidies, thereby reducing

the burden on the people. However, the debt percentage has increased to 95% of

the GDP over the past year.

With a plan for the next five years to gradually reduce the debt to less than 80%

by boosting revenues and decreasing expenditure, the main concern of the Central

Bank of Egypt is combating inflation and reducing its rates to below 10% by 2025.

The Business Today Egypt team wishes you all a blessed New Year filled with happiness,

success, and strength.

Founder William Harrison

(1940–1995)

Executive Editor-in-Chief

Mohamed Abdel Baky

Managing Editor

Noha Mohammed

Deputy Editor

Hanan Mohamed

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Hanan Fayed

Riham El-Shaer

Staff Writers

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Jehad El-Sayed

Nouran Allam

Amr Kandil

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Heba Mekky

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Yara Tarek Tabl

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Sherif Anis

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Sayed Abo El Magd

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December 2023


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In Brief Egypt

Telecom Egypt announces price increases as of January 2024

Telecom Egypt has announced its decision to raise

the prices of its landline internet packages, effective

January 5. The company, one of the leading

telecommunications providers in the country,

cited the need to sustain its services amid rising

operational costs as the primary reason behind

the price adjustment.

As part of the new pricing structure, Telecom

Egypt will offer free access to educational

websites to mitigate the impact on students and

facilitate remote learning.

Under the revised pricing scheme, the 140 GB internet

package will now cost EGP160 per month, up from the

previous rate of EGP120. Similarly, the price of the 200 GB

package has increased to EGP225, compared to its previous

cost of EGP170. Customers opting for the 250 GB

capacity package will see a price adjustment to

EGP280 per month, up from EGP210.

Furthermore, the 400 GB package will now

be priced at EGP440 per month, reflecting an

increase from EGP340. Subscribers interested

in the 600 GB capacity package will have to

pay EGP650, a rise from the previous price of

EGP500. The highest-tier package, offering a 1

TB capacity, will see its price elevated to EGP 1,050 per

month, up from EGP800.

Commuters using the Cairo Metro will pay

slightly more to move through the capital, with

Egypt’s Ministry of Transportation announcing

that ticket prices for the three-line Cairo Metro

have increased by EGP 1-2, effective January 1st.

This is the first time the ministry has altered

the prices since 2020, with the metro serving

over 3.5 million commuters daily within the

Greater Cairo area.

In its previous increase, the ministry upped

ticket prices for those traveling through one

zone (1 to 9 stops) to EGP 5 from EGP 3, two

Metro ticket prices upped by EGP 1-2 at start of

New Year

zones (10 – 16 stops) to EGP 7 from EGP 5, while

travelers moving through more than 16 stops or

three zones would pay EGP 10.

The ministry announced that the new 2024

metro prices are as follows:

- One zone (1 to 9 stops) – EGP 6

- Two zones (10 – 16 stops) - EGP 8

- Three Zones (16 – 23 stops) – EGP 15

The ministry also introduced a new ticket

pricing scheme for passengers traveling more than

23 stops, close to a year since its introduction of

tickets for trips passing through 25 stations/stops.

December 2023

8 www.BusinessTodayEgypt.com

In Brief Egypt

Electricity prices increased,

effective Jan. 1, 2024

The Egyptian Electricity Holding Company

announced new electricity prices for the first time

since 2021, effective January 1, 2024.

The announcement comes soon after the

government’s decision to raise Metro prices,

Telecom Egypt’s increasing household internet

prices, and mobile companies disclosing to

customers new pricing schemes.

Residential electricity consumption brackets,

starting on Jan. 1, are now set as follows: households

consuming within the 0-50 kWh consumption

bracket will pay EGP 0.58 per kWh, consumers of

between 51-100 kWh will pay EGP0.68 per kWh, and

those using 101-200 kWh will pay EGP0.83.

Residential homes consuming between 201-350

kWh will pay EGP1.25, while those using between

315-650 kWh will pay EGP1.40.

Commercial consumption prices were increased

as well, with commercial electricity users consuming

between 0-100 kWh will pay EGP0.65 per kWh, 0-250

kWh will pay EGP1.36, while users of 0-600 kWh will

pay EGP1.50.

Those in the fourth consumption bracket (601-

1000 kWh) will pay EGP1.65, while those using more

than 1000 kWh will pay EGP1.8 per kilowatt.

The price adjustments are within the

government’s efforts to reduce power

subsidies. As inflation and prices

soared during the pandemic’s peak, the

government has postponed increasing

prices since 2021 to protect citizens.

Egypt’s net foreign assets deficit

drops by $170M in November to

$26.98B: CBE

The Central Bank of Egypt (CBE) revealed that

Egypt’s net foreign assets (NFA) deficit narrowed

in November 2023 to EGP 833.96 billion (approx.

$26.98 billion), pointing towards a decline in Central

Bank liabilities and an increase in commercial bank

assets.

The Central Bank’s data represents the country’s

third-highest net foreign asset deficit, following

record-breaking numbers in June and October.

November data reported an EGP5.26 billion

decline (around $170.5 million) from October’s

deficit of EGP 839.21 billion ($27.2 billion).

NFAs saw a slight improvement during November,

reported at negative $11.2 billion compared to

negative $11.3 billion in October.

Debt interest increases Egypt’s

budget deficit to EGP 652.6B

within 4 months

Egypt’s budget deficit increased by 92 percent

during the first 4 months of the current fiscal year

2023/2024 on an annual basis, at a value of EGP

312.13 billion, according to the Ministry of Finance.

The Finance Ministry explained in its recent

report that the budget deficit jumped to EGP 652.65

billion during the period from July until the end of

November 2023, compared to a deficit of EGP 340.52

billion during the corresponding period of the last

fiscal year.

The budget deficit percentage of the gross domestic

product (GDP) rose to 5.51 percent, compared to

3.37 percent during the corresponding period of the

fiscal year.

The increase in the budget deficit comes as a

result of the significant increase witnessed in the

debt interest expense item, which rose to EGP 713.41

billion during the first four months of the current

fiscal year, compared to EGP 357.87 billion in the

same period of the previous fiscal year.

In general, Egypt’s expenditures increased during

the allocated period to EGP 1.258 trillion, compared

to EGP 808.52 billion in the comparative period of

the previous fiscal year.

Egypt’s revenues during the period from July until

the end of November 2023 recorded about EGP

608.96 billion, compared to EGP 463.95 billion in the

comparative period of the previous fiscal year.


December 2023

9

In Brief Egypt

Egypt’s Central Bank

cancels fees on digital

transfers

The Central Bank of Egypt

(CBE) issued a set of decrees that

include exempting customers from

all fees and commissions related

to bank transfer services executed

via electronic channels (internet

banking and mobile banking

applications) in Egyptian pounds

starting from January 1, 2024.

The decrees also included waiving

all fees and commissions related to

bank transfers within the Instant

Payment Network.

According to the CBE’s board of

directors, these decrees come within

the framework of Egypt’s Vision 2030

to support digital transformation.

The issued decrees, effective as of

January 1, 2024, come in alignment

to the CBE’s continuous efforts to

incentivize individuals to expand

their use of digital financial services,

and leverage from its wide range of

benefits, as well as the availability of

banking services from anywhere and

in a timely manner. Consequently,

the usage of digital financial services

contributes to the country’s digital

transformation towards a less-cash

society, and promotes financial

inclusion.

The Instant Payment Network,

launched in April, 2022, is one of

the most significant infrastructure

projects for payment systems

sponsored by the CBE, to act as

an integrated alternative to cash

payments, allowing the instantaneous

execution of all banking transfer

services 24/7.

The Instant Payment Network

witnessed a substantial growth in

the transactions volume carried out

through it, reaching 404 million

transactions, worth EGP 815 billion

via “InstaPay” application and

electronic banking channels, with the

number of service users exceeding

6.5 million.

Government’s electronic payment

yields reach EGP 8.1T in 53 months

The government’s Electronic Payment and Collection Center at

the Ministry of Finance has achieved unprecedented employment

rates, surpassing the value of “electronic payment and collection”

services at EGP 8.1 trillion in approximately 53 months.

According to a statement issued by the Ministry of Finance,

these achievements occurred between May 2019 and November

2023, with a total of 607.3 million electronic payments

transactions.

The Finance Ministry’s statement clarified that the growth rate

of electronic payment services for state employees reached 12

percent.

Additionally, 4.2 million cards carrying the national “Meeza”

mark were issued for state employees’ entitlements, with 93

percent of these cards activated so far.

The electronic collections for the Customs Department

amounted to approximately EGP 829.5 billion, with a growth

rate of 24 percent after transitioning to the Nafeza “Window”

payments platform.

The ministry noted a stability in electronic payments through

various channels for Egyptian taxes, with a growth rate of 30

percent.

The electronic payment and collection services for Egyptian

taxes recorded a value of EGP 1.9 trillion.

December 2023

10 www.BusinessTodayEgypt.com

In Brief Egypt

Egypt’s IPO Program generates $5.6B through selling stakes in 14 companies

Egypt’s initial public offering (IPO) program has

yielded a remarkable $5.6 billion, with the sale of

complete or partial shares in 14 state-owned companies,

as disclosed by Prime Minister Mostafa Madbouly.

In further collaboration with the Egyptian

government, the International Finance Corporation

(IFC) is conducting preliminary studies for the potential

inclusion of 50 additional state-owned companies,

Madbouly added.

The IFC has already prepared a study for the

next phase, which will prioritize four sectors:

management and operation of state-owned airports,

telecommunications, banks, and insurance, according to

the prime minister’s statement.

As part of Egypt’s IPO program, the Arab Company for

Tourism and Hotels Investments (ICON), a subsidiary

of Talaat Mostafa Holding Group, recently completed

the acquisition of 7 state-owned hotels located in Cairo,

Alexandria, and Aswan.

Egypt’s IPO program is a list of 35 state-owned

companies that was offered in 2023 to strategic investors,

the public offering on the Egyptian Stock Exchange, or

both, to provide foreign currency, within the framework

of a state-owned policy document.

Egypt declares 7 essential goods as strategic; implements measures

for market control, price regulation

Egypt’s Prime Minister Mostafa Madbouly issued a

decision declaring 7 essential commodities, namely

mixed oil, broad beans, rice, milk, sugar, pasta, and

white cheese, as strategic products in the application

of Consumer Protection Law No. 181 of 2018.

The law prohibits withholding these goods and

products from trading, whether by hiding them, not

offering them for sale, refusing to sell them, or in

any other form, for a period of six months starting

from the date of implementing this decision or until

further notice, whichever comes first.

The decision obliges holders of the mentioned

7 commodities, for purposes other than personal

use, including producers, suppliers, distributors,

and sellers, to immediately notify the relevant

directorates of supply and internal trade nationwide

about the type and quantities of these goods they

may have in stock, provided that the supply controls

and procedures are adhered to, as determined by

a decision of the Minister of Supply and Internal

Trade.

According to the decision, anyone who violates

the provisions of this decision will be subject to

the penalties stipulated in Article 71 of Consumer

Protection Law No. 181 of 2018.

Additionally, the Prime Minister issued Decision

No. 4585 for the year 2023 to form a permanent

technical secretariat for the committee recently

formed under the chairmanship of the Minister

of Planning and Economic Development. This

committee is concerned with studying mechanisms

for market control and commodity prices.


December 2023

11

News in Focus

Egypt under Rating

Agencies’ Microscope

Egypt experiences a downgrade in credit ratings from major

agencies, including Moody’s, Fitch, and S&P Global Ratings.

12 September 2023

www.businesstodayegypt.com

News in Focus

By Hanan Mohamed

Egypt has lately faced a rating downgrade

from several agencies, including

Moody’s, Fitch, and S&P Global

Ratings (previously Standard and

Poor’s). All agencies attribute the downgrade

to the country’s external financing, macroeconomic

stability, and the trajectory of its alreadyhigh

government debt.

Moody’s Rating Agency (Moody’s) downgraded

Egypt’s rating from B3 to Caa1 in October,

with a stable outlook. The downgrade is attributed

to the deterioration of the country’s ability

to bear debt and the ongoing shortage of foreign

currencies. The stable outlook, however,

is due to Egypt’s continued access to financial

support from the International Monetary Fund

(IMF) under an arrangement of $3 billion over

46 months.

As for S&P Global Rating Agency, it lowered

Egypt’s long-term sovereign credit rating from

B to B-, citing concerns over the country’s foreign

currency shortage, delayed disbursements

of multilateral funding, and debt sustainability.

S&P’s report explained that the downgrade was

due to the delayed progress of Egypt’s structural

reforms, as well as narrowed net foreign assets

and the IMF’s postponed reviews.

However, S&P upgraded its outlook for the

Egyptian economy from negative to stable and

maintained its short-term B rating.

For its part, Fitch Ratings downgraded Egypt’s

Long-Term Foreign-Currency Issuer Default

Rating (IDR) to B- from B in November, with

a stable outlook. This rating is attributed to increased

risks of external financing, macroeconomic

stability, and high government debt.

The stability of the official exchange rate

contrasts with the Central Bank of Egypt’s commitment

to a flexible exchange rate, according

to Fitch that also predicted that the country’s

external debt maturities are set to rise, and the

current account deficit is expected to expand.

Fitch noted that the country’s reliance on foreign

direct investment (FDI) has grown, while

its debt trajectory remains a concern, adding

that the potential security risks stemming from

regional conflicts and persistent high inflation

are also contributing factors in the downgrade.

Economic expert Ashraf Ghorab stated that

the world has undergone several crises in recent

years from the COVID-19 pandemic to climate

change and the Russian-Ukrainian war, causing

supply shortages. This war exacerbated the global

economic crisis, weakened growth rates, led

to further supply shortages, increased energy

prices, and disrupted shipping and transportation.

These factors caused a significant rise in inflation

rates worldwide, including in Egypt. This

resulted in the withdrawal of hot money from

all countries toward the U.S. market, which became

more attractive after the Federal Reserve

raised interest rates at the highest pace in about

40 years. Investors also clung to the dollar as a


December 2023

13

News in Focus

safe haven against financial risks.

Ghorab explained that Egypt witnessed an

outflow of over $22 billion in hot money, leading

to a shortage of foreign currency and an increased

pressure on the Egyptian pound, causing

its depreciation against the dollar.

He clarified that Fitch’s rating indicates slow

progress in reforms, delays in transitioning to a

more flexible exchange rate system, delays in International

Monetary Fund (IMF) program reviews,

and increased risks threatening external

financing for Egypt.

He criticized the fact that agencies like Fitch

link credit ratings to IMF reviews, saying this is

an unfair and biased evaluation and does not

align with the “very stable” economic conditions

in Egypt.

“Egypt remains committed to repaying its external

debts despite economic and geopolitical

challenges, having paid $52 billion in external

commitments over the past two years,” the expert

stated.

Ghorab suggested political pressures are being

exerted on Egypt in response to the country’s

acquisition of the BRICS membership to

diversify its funding sources and economic relations,

as well as its pro-Palestinian stance. This

pressure may be showing in the ratings of these

U.S. agencies, he claimed.

Nonetheless, Egypt’s stable and progressing

economy, commitment to reforms, and developing

business environment have made it attractive

for foreign investments. This is demonstrated

in the state policy’s instruction to increase

the private sector’s contribution to investments

to 65%.

Positive scenario

S&P stated that it could raise its ratings for

Egypt if the country reduced its levels of net

government debt and total external financing

needs by accelerating reforms that support competitiveness,

growth, and financial outcomes. It

added that it expects renewed financial support,

14 December 2023 www.businesstodayegypt.com

News in Focus

whether bilateral or multilateral, from external

parties under such scenario.

Fitch agreed with S&P, referring to a reduction

in external vulnerabilities, for example,

through improved international market access,

a sustained reduction of the current account

deficit, and the build-up of international reserves

or other liquidity buffers.

It also referred to another factor, which is

macro and public finances, highlighting policy

adjustments that reduce economic distortions,

improve access to external financing, support a

decline in government debt over the medium

term, and lower interest costs.

Meanwhile, Moody’s spoke of sufficient confidence

in the ability of the government to generate

necessary foreign exchange inflows with

the privatization program to meet increasing

external debt service payments over the next

two years, and bolster the economy’s foreign exchange

reserves.

“An ability to limit the increase in debt affordability

challenges, including via higher revenue

generation, would engender confidence in

Egypt’s ability to navigate continued depreciation

risks, paving the way for a return to a higher

ratings level,” Moody’s added.

IMF collaboration and funding gap

Egypt has been collaborating with the IMF in

implementing an economic reform program

since December 2022, supported by a funding

of up to $3 billion disbursed in tranches. Egypt

is awaiting the IMF’s first and second reviews of

the reform program to disburse two tranches of

the loan totaling about $700 million.

The IMF postponed its reviews of the reform

program amid demands for the Egyptian authorities

to swiftly return to a commitment to

exchange rate flexibility, after maintaining the

exchange rate since March 2023 following a

sharp decline in the previous year. These calls

from the IMF come in tandem with the progress

achieved by the government in the file of selling

some state assets.

During the current fiscal year, Egypt’s funding

gap amounts to $6-$8 billion, according

to recent statements by Minister of Finance

Mohamed Maait.

Ghorab anticipated that the completion of

the IMF review will lead to an improvement in

credit ratings across all agencies. He emphasized

Egypt is working to fulfill its foreign currency

needs through various initiatives and decrees

such as increasing the income from the Suez

Canal to $12 billion this year, boosting tourism

revenues, introducing an initiative for Egyptians

working abroad to import cars into Egypt, and

implementing the Central Bank decisions limiting

the use of credit and debit cards abroad to

prevent manipulation.

Furthermore, Egypt’s success in divesting

from various economic activities through the

government’s offerings program, alongside

the anticipated divestment from additional activities,

will increase foreign currency inflows to

cover the needs of the Egyptian economy.

Ghorab indicated that Egypt successfully issued

Panda bonds equivalent to $500 million in

the Chinese market and Samurai bonds worth

$500 million in Japanese yen in March 2022,

and that Egypt is currently launching the second

issuance of Samurai bonds worth ¥75 billion

(about half a billion dollars) for a five-year

term with an average yield of 1.5%. This highlights

Egypt’s easy access to external financing

in contrast to Fitch’s rating.

Additionally, initiatives like the debt swap

agreement with China that aims to establish


December 2023

15

News in Focus

Chinese investment projects in Egypt in exchange

for debt forgiveness contribute to reducing

Egypt’s external debts.

Ghorab also pointed out that Egypt’s engagement

in deals like the debt swap and currency

swap with the UAE as well as similar agreements

with Turkey and other countries will reduce

Egypt’s dependence on the dollar. This shift

will represent a significant breakthrough in securing

production necessities and raw materials

without the need for dollars. Also, Calls for boycotting

foreign products that allegedly support

the Israeli war machine contribute to reducing

some imports, easing the pressure on the dollar,

and stimulating the national industry.

Negative scenario

Standard & Poor’s stated that it could downgrade

Egypt’s ratings if the authorities failed to

implement the necessary macroeconomic reforms

to reduce economic imbalances in Egypt

and unleash multilateral and bilateral financing.

It added that it could also downgrade ratings

if government interest costs, “which are already

high,” increase, raising the risk of distressed

debt exchange.

The allocations for government debt interest

payments in the state’s general budget for

the current fiscal year are estimated at around

EGP 1.1201 trillion, compared to preliminary

estimates of EGP 775.2 billion for the fiscal year

2022-2023.

Moody’s said that an inability to arrest a further

drawdown in foreign currency liquidity

in the monetary system would likely lead to a

downgrade, as would a further deterioration in

debt affordability that undermines confidence

in the government’s capacity to service its debt.

Evidence of increased rollover risk amid significantly

large gross financing requirements would

also result in a downgrade.

For its part, Fitch considered three factors

when it comes to another downgrade, including

external finances, public finances, and a

structural factor. The rating agency stated that

greater external financing strains are weakening

international reserves and/or other liquidity

buffers. For example, this could result from

the authorities’ inability to restore confidence

in the currency or to secure sufficient financing

from multilateral, bilateral, or market sources.

“Increased debt sustainability risks,” it pointed

out, giving examples of risks come as a result

of loosening fiscal policy, and/or failure

to reverse the recent deterioration in interest/

revenue and government debt/GDP in the medium

term.

Regarding the structural factor, Fitch stated

that an escalation to the Israel-Hamas conflict

would increase instability and security risk in

Egypt, with a substantial negative spill-over impact

on tourism, investor sentiment, or increased

domestic socio-political challenges to reforms.

Egypt’s official outlook

On a governmental level, Maait commented

on the latest downgrade that the Egyptian government

has identified sources to meet external

financing needs until the end of the current fiscal

year, estimated at $4 billion, and that it aims

to continue diversifying international markets.

Maait highlighted the possibility of Egypt

securing about $5 billion annually with favorable

conditions from multilateral development

banks. This underscores the confidence of these

international institutions in Egypt’s economic

path, characterized by balanced responses to

successive global crises. The government’s financial

policies demonstrate increased fiscal


News in Focus

discipline, reduced debt and deficit ratios to

GDP, and sustainable primary surpluses. These

efforts align with structural reforms promoting

comprehensive economic growth by empowering

the private sector, which is seen as a driver

of the overall development.

Maait added that foreign direct investment

(FDI) inflows reached $10 billion during

2022/2023 previous fiscal year and are expected

to rise to $12 billion in 2023/2024. This aligns

with the expansion of the government offerings

program, aimed at enabling and encouraging

the private sector to increase its contributions

to economic and developmental activities, providing

more employment opportunities and improving

living standards and services. Further,

the Suez Canal recorded revenues of $10 billion

in the last fiscal year, with the target set to increase

to $12 billion this year. He confirmed that

the structural reforms in various sectors have

helped overcome the repercussions of regional

crises.

The minister noted that the general state finances

achieved robust performance, reflecting

its ability to positively and flexibly deal with

inflation and rising interest rates. This success

is shown in the change of the outlook by Fitch

from negative to stable. A primary surplus of

1.6% of GDP was achieved during 2022/2023

compared to 1.3% in the year before.

Egypt aims at a primary surplus of 2.5% this

year, and a 6% total budget deficit of GDP during

2022/2023, compared to 6.1% in 2021/2022.

The minister explained that indicators of public

debt to GDP will improve in the coming years

through efforts to increase state revenues and

enhance spending efficiency, as well as through

the full commitment to financial performance

policies. This comes in light of the exceptional

global circumstances.

The minister emphasized the success of the

Egyptian government in developing tax administration

by expanding technological solutions

and digital systems. This contributed to a 27.2%

increase in tax revenues during the last fiscal year

and a 34% increase in the first quarter of this year.

The state prioritizes expanding the umbrella

of social protection while continuing to implement

the structural reform agenda to flexibly

address the negative impacts of current internal

and external challenges. This approach aims

to alleviate the burden on citizens’ shoulders,

where allocations for support and social protection

in the current fiscal year’s budget reach

EGP 530 billion, with an annual growth rate of

20%.


December 2023

17

News in Focus


News in Focus

On the Horizon:

LNG Exports Poised

for Comeback

Egypt set to resume liquefied natural gas exports following a

period of increased Israeli gas supplies.

By Hanan Mohamed

Egypt is set to resume exporting liquefied natural

gas (LNG) after months of halting following

the increased supplies from Israel, as

reported by Bloomberg. Ship-tracking data

shows that the Adam LNG ship has arrived at the Idku

plant in Egypt, marking the return of foreign shipments

to Egypt.


December 2023

19

News in Focus

According to consulting firm Rystad Energy,

Egypt imports around 7 billion cubic

feet of natural gas annually from the Israeli gas

fields Tamar and Leviathan.

Egypt planned to resume liquefied natural

gas exports by the end of November or early

December at the latest after the resumption

of the natural gas flow from the Tamar field,

which was fully suspended since the beginning

of the Israeli bombing of Gaza. The government

anticipates stabilized natural gas injection

rates, coupled with reduced local market

consumption following a decline in electricity

stations usage due to lower temperatures during

this period.

Egypt relies on imports of Israeli gas to meet

a portion of its domestic demand, as well as

for re-export purposes. This comes at a time

when the demand for gas in Egypt is increasing,

while its production has fallen to its lowest

levels in three years. The country has faced an

energy shortage during the summer, with heat

waves leading to increased demand for cooling.

Resumption of natural gas flow

On November 14, Chevron announced in

a press release the resumption of natural gas

flow through the East Mediterranean Gas Pipeline

from Israel to Egypt, as it stopped on October

7 “due to the ongoing conflict between

Israel and Hamas in Gaza,” as described by the

energy company.

The pipeline extends from the city of Ashkelon

in southern Israel, about 10 kilometers

north of Gaza, to Arish in Egypt, where it connects

to a land pipeline. The 90-kilometer

pipeline is the main link between Chevron-operated

Leviathan offshore gas field and Egypt.

The Leviathan consortium includes Chevron

as the operator, Israeli company New Med

Energy, and Reshef Energies.

The resumption of Egyptian gas exports is

crucial for Egypt’s economy, with the country

earning $8.4 billion from LNG exports in

2022, and the prospect of exporting 1 million

tons of LNG before the end of 2023 has provided

a positive outlook amid the recent developments.

This came after Egyptian officials confirmed

in early November that gas imports dropped


News in Focus

to zero after Israel turned off its taps, which in

turn limited efforts to resume liquefied natural

gas exports. With gas being cut off to energyintensive

industries to maintain grid supplies,

activities outside the energy sector were set to

suffer as well.

Resuming exports

An executive from Italy’s ENI stated in mid-

November that Egypt is expected to resume

exports of LNG in December or January as domestic

demand declines during winter and as

it receives more gas from Israel.

“Consumption in Egypt is reducing and we

would expect by December, possibly January,

(LNG) exports could resume,” Cristian Signoretto,

director for ENI’s global gas and LNG

portfolio, told reporters on the sidelines of an

industry conference in London.

In 2022, Egypt directed 80% of its LNG exports

to Europe as the continent sought alternatives

to the Russian pipeline gas following

the invasion of Ukraine. However, LNG exports

for the current year have been limited

due to heightened domestic demand during

the summer, resulting in minimal to zero LNG

exports from May to September.

Middle East and North Africa economist at

Capital Economics James Swanston commented

that Natural gas production in Egypt has

been in decline since the fourth quarter (Q4)

of 2021, but consumption grew fast in 2023. As

a result, Egypt has become a net gas importer

for the first time since 2020. A large share of

this gap had been plugged by Israeli exports.

“Meanwhile, there had been hopes from

Egyptian officials that as seasonal demand

fell, Egypt could restart re-export of gas via its

LNG terminals in Damietta and Idku. This

would have provided a much-needed fillip

to Egypt’s hard currency receipts. This

now seems unlikely and will mean

that the FX crunch in the economy

persists and could intensify the

rationing by the central bank,”

Swanston added.

The size of foreign direct investment

(FDI) inflow in the sector in FY

2021/2022 amounted to $4.7 billion,

which composed 21.2% of the country’s total.

Also, natural gas and LNG exports jumped

by 154% in 2022, compared to the previous

year, hitting $9.9 billion up from $3.9 billion.

That is mostly attributed to the reoperation of

the Damietta gas liquefaction plant after an

8-year hiatus.

He added that the hit to gas imports has

led to cuts in supply to industry: fertilizer

manufacturers are reporting declines of at

least 30%. This gas has been rerouted to the

national grid to reduce the frequency of electricity

blackouts. With industrial output 15%

below pre-Covid levels, further restrictions on

gas could exacerbate this and weigh on GDP

growth.

Days before the Israeli aggression on Gaza,

Minister of Petroleum Tarek El-Molla announced

that Egypt’s imports of Israeli gas for

export purposes are expected to increase by

about 30% in the near future, following the

Egyptian-Israeli-European gas agreement that

has already led to a 40% increase in the quantity

of gas imported from Israel to Egypt since

January 2021.

Swanston clarified that Egypt’s current gas

production rate is approximately 6 billion cubic

feet per day, and maintaining the stability

of these rates by the end of the current fiscal

year depends on the companies’ commitment

to implementing field development and

growth operations to achieve production targets.

The Israeli gas primarily serves the local

market and is also exported to Jordan and

Egypt, which liquefies the gas and exports it

to Europe. Israel began exporting natural gas


December 2023

21

News in Focus

Moody’s added that officials

at the Italian company

Eni expect Egypt to resume

liquefied natural gas exports in

December 2023 or January 2024,

based on their estimates of a possible

decline in local demand during the winter

months.

The Egyptian government announced in

September plans to expand the Zohr gas field

managed by Eni. The strategy includes global

oil companies drilling 35 wells in 2024 and

2025, at an expected cost of $1.8 billion, with

the enhancement of new research and exploration

activities.

It is worth mentioning that Shell Egypt announced

the discovery of a new gas field - Mina

West, located in the North East El-Amriya

block in the Mediterranean Sea. The company

safely and successfully completed the drilling

of the first well within its exploration project,

which includes three wells.

It clarified that the well, located at a depth

of 250 meters below sea level, showed the presence

of a gas-bearing layer. Assessment operato

Egypt in January 2020 within the framework

of a deal that is regarded the most significant

since the Camp David Peace Accords between

the two countries in 1979.

For its part, Israel aims to increase gas

supplies to Egypt. It approved a plan

in May 2022 to build a pipeline in

the south of the country, stretching

65 kilometers along the border

with Egypt, to transport 6 billion

cubic meters of gas annually.

Egypt has two natural gas liquefaction

plants with a total daily production capacity

of 2.1 billion cubic feet, and exports depend

on its surplus production and gas imports

from neighboring countries.

Located on the Mediterranean coast, both

plants can export 12 million metric tons annually;

a target Egypt aims to achieve by 2025.

The Egyptian government seeks to enhance

its gas production capacities in response to

rising domestic consumption, aspiring to become

a regional gas hub, especially after the

discovery of the Zohr field in 2015. This discovery

stimulated investor interest in the Egyptian

gas sector, enabling the country to export

significant quantities of LNG.

Italian energy company Eni anticipates commencing

production from the Orion-1X gas

well in the Eastern Mediterranean in Egypt.

The well holds reserves of 10 trillion cubic

feet and is expected to start production within

three years with an investment cost of $130

million.

Domestic use vs exporting

Moody’s credit rating agency expected that

Egypt’s ability to export LNG would remain

limited, as quantities are directed for domestic

use rather than re-export.

In a recent report, Moody’s explained that

Egypt relies on gas imports from the Tamar

field through the East Mediterranean Pipeline

to fill any gaps in domestic production.

Moody’s noted that the resumption of Israeli

gas exports to Egypt alleviates the current

shortage resulting from intense summer heat.

The agency also pointed out that Egypt has

not exported any liquefied natural gas since

May due to the decline in local production

from the Zohr field amid increased demand

during the summer months. It expects that

the balance of local supply and demand will

remain limited unless production or supplies

from Israel increase to the levels before the

war on Gaza.


News in Focus

Egypt’s

natural

gas

exports

increased

by 14.3%

in 2022 to

8 million

tons, compared

to 7

million

tons in

2021.

tions and data collection

are still ongoing to determine

the size of the discovery and the

expected production.

Gas exports

Egypt’s exports of liquefied natural gas

amounted to about 3 million tons during the

first half of 2023, according to El-Molla, who

expected exports to resume in October after

the summer season, during which Egypt stops

exports to meet domestic needs. He also forecasted

that export volumes in the first half of

2024 would not be lower than those achieved

in 2023.

Egypt’s natural gas exports increased by

14.3% in 2022 to 8 million tons, compared

to 7 million tons in 2021, earning $8.4 billion

from gas exports in 2022, up from $3.5 billion

in 2021, a 140% increase.

Egypt continued its liquefied gas exports

until last June, before the country, aspiring

to become a regional natural gas hub, halted

exports in July due to a power crisis - the first

since 2014 - caused by rising temperatures and

a shortage of the necessary fuel to operate

power stations at their required capacity.

Egypt, having become a central hub for energy

exchange in the Eastern Mediterranean

and Europe, aims to continue optimally exploiting

its energy resources. The recent exploration

and production activities in Egypt

by foreign companies, including Eni’s plans

for $7.7 billion worth of new investments in

the next four years, underscore the country’s

growing significance in the global energy market.


December 2023

23

News in Focus

Diversified

Investments Await

as Egypt Joins

Joining the bloc carries a diversification of options for Egypt,

which would directly benefit from the experiences of member

states in increasing manufacturing and production rates.


News in Focus

By Nourhan Magdi

Egypt is scheduled to join the BRICS

in January 2024 to become the newest

member of a group of emerging

economies along with Brazil, Russia,

India, China, and South Africa.

Egypt’s business community welcomed the

move, saying it would open new doors for trade

and investment with the BRICS countries and

other regions.

International Cooperation Minister Rania

Al-Mashat asserted Egypt’s official accession to

BRICS is very important to develop the country’s

relations with emerging economies. The

move is also meant to promote cooperation

with the New Development Bank that Egypt

joins this year, the State Information Service

(SIS) quoted Al-Mashat as saying in September

2023.

About the New Development Bank

Established in 2015, the bank is headquartered

in Shanghai, China, and its role reflects the priorities

of emerging and developing countries.

The capital will be increased by the new

members by about $50 billion, bringing the total

subscribed capital to $1 billion.

With regard to environmental, social, and

procurement standards, the New Development

Bank uses national standards for the countries

of operation, and focuses on implementing

projects related to the national development

priorities of the member countries.

The New Development Bank works to support

sustainable development and enhance regional

cooperation and integration by investing

mainly in the field of infrastructure, which includes

various sub-sectors such as energy, transportation,

water, and communications.

The bank’s operations include the health

and social infrastructure sectors, and the bank’s

activity extends to the field of digitization due

to the adverse economic effects resulting from

the Coronavirus pandemic (COVID-19) on the

global economy.

With regard to environmental, social and

procurement standards, the New Development

Bank uses the national standards of the operating

countries only. The bank aims to provide

the necessary resources and technical assistance

for the implementation of projects related

to the national development priorities of the

member states.

Since 2022, the New Development Bank’s

portfolio included 80 projects, with a total value

of $30 billion. Membership in the New Development

Bank is still limited to BRICS countries,

as the bank followed a slow approach in

the process of expanding its membership due

to the different opinions among member states

on how to manage the expansion process.

Reducing pressure on foreign currency reserves

Over the past year, Egypt has suffered from a

foreign currency crunch, which has caused the

import bill to surge and fuel and wheat prices

to hike. Dealing in national currency among

member states of the BRICS will help Egypt in

“rationalizing consumption of the import currency

basket,” Minister of Finance Mohamed

Maait has said. “This would reduce the huge


December 2023

25

News in Focus

pressures on the state’s general budget to provide

the basic needs of wheat and fuel,” Maait

explained.

This alliance guarantees access to the world’s

largest food basket and may allow Egypt to settle

trade contracts for its major imports using

national currencies, thereby easing some pressure

on foreign currency reserves.

In January 2023, the Parliament approved an

agreement that allows Egypt to join the BRICS’s

New Development Bank, which comes as a significant

addition that supports development

plans and priorities of the country, enhancing

Egypt’s ability to achieve its economic, political

and social objectives.

Reshaping global economic balance

Mohamed Attia El-Fayoumi, chairman of the

Chamber of Commerce and treasurer of the

General Federation of Chambers of Commerce,

expressed deep appreciation for the trust the

BRICS member states place in Egypt. He emphasized

Egypt’s eagerness to collaborate with

the BRICS countries in the near future, with the

aim of achieving the alliance’s goals of bolstering

economic cooperation and amplifying the

voice of southern nations concerning various

developmental challenges.

In his statements to the press, El-Fayoumi

stressed that this economic bloc reshapes the

global economic balance, ushering in a new era


News in Focus

Trade value between Egypt and

BRICS increased by 10.5%, reaching

$31.2 billion in 2022 from

$28.3 billion in 2021.

the Egyptian export value to BRICS countries

at approximately $4.9 billion in 2022, up from

$4.6 billion in 2021. Meanwhile, imports from

BRICS countries to Egypt experienced an increase

recording $26.4 billion in 2022 versus

$23.6 billion in 2021.

of a multi-polar economic world. He clarified

that Egypt’s acquisition of the membership of

the BRICS Development Bank a few months

ago, followed by the official announcement

of joining the alliance, will provide the country

with opportunities to secure funding for its

developmental projects under better terms and

facilitations, free from the constraints imposed

by the World Bank Group and the International

Monetary Fund.

CAPMAS records highlight a trade value

increase between Egypt and BRICS, which increased

by 10.5% from 2021 to 2022, reaching

$31.2 billion in 2022 from $28.3 billion in

2021. CAPMAS also recorded an increase in

Diversification of investment options for Cairo

The decision of to join the bloc represents

a diversification of options for Egypt, which

would directly benefit from the experiences

of member states in increasing manufacturing

and production rates.

The BRICS Development Bank allows Egypt

to strengthen the trade exchange agreement

with 68 BRICS countries, thus providing a common

market for the promotion of Egyptian

goods and products, which supports the continuation

of the strategic vision on a new diversification

of international trade relations.

This bloc also gives member states a kind of

balance and rapid trade exchange to revive

their economies, as well as form reserves to address

the liquidity problem.

Egypt’s joining of the bloc will also strengthen

its influential role in Africa through trade agreements,

besides the expectations of more intra-regional

investments because countries like India

will be placed on Egypt’s investment map.


December 2023

27

Spotlight

Overview

of FDI

Inflow in

2023

Egypt attracted billions of dollars for

green energy, logistics, and IT.

28 September 2023


Spotlight


December 2023

29

Spotlight

By Noha El Tawil

Egypt’s government attracted billions

of EGP worth of investments in 2023,

which are mostly concentrated in the

sectors of green energy, logistics, and

IT, capitalizing on the unique location of the

country. We look back at the FDI attracted over

the past year.

December

Norway’s Scatec and the Egyptian Electricity

Holding Company (EEHC) signed a cooperation

agreement to establish the country’s

first solar battery. The project includes a 1-gigawatt

(GW) solar plant and a 200-megawatt-hour

(MWh) battery storage facility.

November

In the logistics sector, the Ministry of Transport

in Egypt signed an MoU with South Korea’s

STX to develop Matrouh’s Gargoub Port and its

logistics zone. The South Korean firm will conduct

a comprehensive feasibility study on equipping,

managing, operating, and maintaining the

port, its docks and infrastructure.

In the manufacturing sector, the Suez Canal

zone (SCzone), the TSFE, and the East Port

Said Development Company (EPSD) signed an

agreement with Germany’s Volkswagen to conduct

feasibility studies for the establishment of

the East Port Said Automotive Zone (EPAZ).

The EPAZ project is aimed at attracting investments

totaling approximately $240 million and

creating over 6,000 direct and indirect job opportunities.

Volkswagen will be providing technical assistance

to achieve the objectives of the Automotive

Industry Development Program (AIDP). The

program, launched in June 2022, aims to localize

the automotive industry in Egypt.

In a different context, the TSFE and the private

sector partnered to establish the Cosmic Village’s

school complex in 6 October City, with the

aim of delivering world-class education that is affordable

to middle-income Egyptian families.

The project was inaugurated in November,

as four out of five schools within the first phase

have begun operation in the current academic

year. It succeeded in turning what once was an

unutilized state asset, the Cosmic Village land,

into an integrated educational hub.

Two of the four schools have been developed/

built by Mobica Integrated Industries and are

managed by Egypt Education Platform (EEP).

Those are Westview International Language

School (WILS) and Scholars International Language

School (SILS).

The third school, Regent School, is a joint venture

between Cairo Investment and Real Estate

Development Company (CIRA) and Elsewedy

Capital, and is managed by Eduhive. And the

fourth is Future Tech School, which is both built

and managed by CIRA.

The number of students in the four schools

has reached about 1,000 with a target of 10,000

students upon the completion of the project’s

first phase. In this framework, a partnership con-


Spotlight

tract for the establishment of the fifth school (a

French school) will soon be signed.

October

The Ministry of Electricity and Renewable

Energy and the Chinese Energy China Group

signed a memorandum of understanding

(MoU) to conduct a feasibility study on establishing

a pumping and storage station with a

capacity of 2,000 megawatts. The study includes

the technical, economic, and financial aspects of

the project intended to be implemented in the

build-own-operate (BOO) model.

August

Ocior Energy signed an initial contract with

the Egyptian government to set up a $4 billion

green hydrogen plant in SCzone. The final contract

will be signed in a few months and the implementation

will be carried out over 5-6 years.

The plant’s annual production is planned to be

400,000 tons per annum, and it will be exported

to Europe generating revenues of up to $1 billion.

Further, the project will be powered by 15

GW of solar energy.

Also, the Ministry of Transport signed a contract

to establish a dry port in Cairo’s 10th of

Ramadan City, and an MoU to build another in

Alexandria’s Borg Al-Arab.

Medlog MSC had won a tender to finance,

design, build, operate, and maintain the 10th

of Ramadan Dry Port, planned to span over 250

feddans (1.125 million square meters). It will be

divided into a dry port (130 feddans), and a logistics

center (120 feddans).

The project, where 400,000 containers are expected

to be circulated annually, will be implemented

in the public-private partnership (PPP)

system, with duration of 30 years and an investment

cost of $100 million.

The land has been connected to roads, electricity

grid, water supply, wastewater, and telecommunication

networks. Currently, it is being

linked to a railway line extending between

Cairo’s Robeiky Industrial City and Sharqia’s

Belbes.

As for the Borg Al-Arab Dry Port, the MoU was

signed with Ocean Express. The project stretches

on 120 feddans and is situated on the highway

connecting Borg Al-Arab with Bangar Al-Sokar

agricultural lands near the railways and the fifth

industrial zone. It also lies 56 kilometers away

from the Port of Alexandria, 48 kilometers from

Alexandria’s Dekheila Port, and 20 kilometers

from Borg Al-Arab Airport.

The dry port will be connected to the railways,

and the road that will link together Borg Al-Arab

Industrial Zone, Port of Alexandria, Dekheila

Port, Abou Kir Port, and Matrouh’s Gargoub

Port.

Forty percent will be executed within the first

phase that will last for 12 months. That phase

includes the train station, handling yard, first

section of the container yard, and buildings of

the customs and other governmental services.

Meawnhile, the second phase will be carried out

over 24 months.

The cost of the port’s infrastructure and superstructure

is EGP 780 million. Its annual handling

capacity is 120,000 containers, 2.5 million

tons of dry cargo, and 4.2 million tons of general

cargo. The logistics zone in the port will stretch

on 85,000 square meters.

May

Alexandria National Refining and Petrochemical

Company (ANRPC) and the Norwegian renewable

energy company Scatec signed an MoU

to build a $450-million green methanol production

project.

The plant, set to be located in the Port of


December 2023

31

Spotlight

Damietta, will have an annual production capacity

of 40,000 tons that will later to be raised to

200,000 tons annually.

The agreement consists of constructing a 40-

MW solar plant and a 120-MW wind farm, as well

as a green hydrogen analyzer with a capacity of

60 megawatts.

In a related context, the SCzone, several Egyptian

entities, and China Energy transformed an

MoU into a comprehensive collaboration framework

to establish a green hydrogen production

plant at Ain Sokhna’s economic zone.

Worth $6.75 billion, the plant will stretch

across 500,000 square meters and generate

210,000 tons of green hydrogen annually. The

green hydrogen produced will be used to generate

1.2 million tons of green ammonia per annum.

Additionally, the SCzone and China’s United

Energy signed an agreement to establish an

$8-billion potassium chloride production facility,

with a capacity of 4.1 million tons per annum,

20% of which will be directed to the local market.

It is noted that the plant will be powered by

6.1 GW of renewable energy.

Benya, a digital infrastructure provider in

Egypt, Khazna Data Centers, and Maadi Technology

Park signed in May a MoU to establish

a high-density data center with a capacity of 25

megawatts and a cost of $250 million, spanning

over 40,000 meters.

March

The TSFE announced signing a contract with


Spotlight

Aya for Real Estate Development to lease the former

headquarters of the Ministry of Interior in

downtown Cairo.

The company will turn the place into office

buildings, a crowdsourcing center, a shopping

mall, a branch of a French university, dorms,

and a three-star hotel, implementing the plan

set by the fund after carrying out the necessary

studies.

The goal is attracting international students,

young tourists, and start-up investors, capitalizing

on the complex location and size, as it

consists of seven buildings stretching on 39,895

square meters.

The company will revamp the complex at EGP

800 million, as well as pay a fixed annual rent

and a share of profits to TSFE.

February

Elsewedy Data Centers signed an MoU with

the Emirati Gulf Data Hub to build a $2.1-billion

data center hub that will comprise three worldclass

data centers located in three different locations.

The hub will have a total storage capacity

of 192 megawatts, and a total power load of 300

megawatts in 5-7 years.

The implementation will be carried out over

four phases, and the hub will be connected to

other data centers owned and operated by GDH

in Saudi Arabia and the United Arab Emirates.

Overview

Chairman of the General Authority for Investment

and Free Zones (GAFI) Hossam Heiba

stated in November that 32,447 companies were

founded in Egypt in FY2022/2023 compared to

30,961 companies in FY2021/2022.

The GAFI chairman highlighted that, during

the past 9 years, there has been a major leap in

the modernization of infrastructure and legislations

as the goal was increasing the country’s

economic competitiveness, attracting new investments,

and incentivizing existing businesses

to expand. As a result, 1,555 companies injected

more financing into expansion in the past fiscal

year, and the flow of foreign investment exceeded

$10 billion.


December 2023

33

Spotlight

Expanding RE projects in Egypt

A Green Plan with

Higher Purposes

With the aim to expand renewable energy projects, Egypt is

increasing its reliance on renewables to cut the quantities of

used fuel, where the total capacity generated from renewable

energy on the grid is set to reach 68,500 megawatts by 2030,

representing 42% of the total capacity on the national power grid.

By Nourhan Magdi

The Egyptian state plans to implement

massive power generation projects

from new and renewable energy

sources in the coming years, which is

set to put Egypt in the lead of the Arab world’s

electricity production.

As part of the state’s endeavors to make use

of Egypt’s 100,000 megawatts of sun and wind,

huge projects have been established in cooperation

with the private sector to expand green hydrogen

production and export energy through

electrical interconnections with Europe, Africa,

and Arab countries.

Egypt’s plans for RE

With the aim to expand renewable energy

projects, Egypt is increasing its reliance on

renewables to cut the quantities of fuel used,

where the total capacity generated from renewable

energy is set to reach 68,500 megawatts by

2030, which accounts for 42% of the total capacity

on the national power grid.

The Ministry of Electricity and Renewable

Energy, plans that the total capacity generated

from renewable energy reach 15,800 megawatts

in 2025, and 42,100 megawatts by 2028.

Further, Egypt has a reference plan that aims

to rely on renewable energy by 50% of the total

capacity of the national electricity network by


Spotlight

2040, with a total capacity of 142,000 megawatts.

With regard to the green plan, the state aims to

rely on renewable energy by 57% by 2040, with

a capacity of 159,000 megawatts.

The largest source of renewables in the region

Egypt has the largest resources of renewable

energy in the entire region and Africa. Among

the steps taken to make the best use of these

valuable resources, 173,000km2 have been allocated

to the establishment of wind stations

with a total capacity of up to 350,000 megawatts,

which is 10 times greater than the current

maximum load of the national electricity

grid.

So far, the total area allocated for the establishment

of electricity generation plants

from solar and wind energy comes to about

30,000km2.

Most of the lands allocated for renewable energy

plants are located in the governorates of

Upper Egypt to develop the south, attract investments

to its governorates, and improve the

economic and living standards there.

The Minister of Electricity revealed that the

ministry is planning to produce 3,500 megawatt

of electrical energy from renewable energy,

with investments amounting to 4 billion and

400 million dollars.


December 2023

35

Spotlight

Eying bigger purposes

Egypt’s renewable energy projects have extended

from only producing electrical energy

to also operating in the production of green

hydrogen, electric cars, and water desalination.

The state’s expansion of such projects achieves

economic gains, which reduces the cost of sales,

as well as environmental gains through the reduction

of carbon dioxide emissions.

Al-Arabiya TV reported that the Egyptian

Ministry of Electricity received 10 new offers

from Saudi, Emirati, British, German, and Chinese

companies to launch renewable energy

projects with different capacities in Egypt, with

total investments amounting to about US$3 billion.

Upon consulting with the companies, it

was decided to form a committee to study the

offers.

The desire of Arab and international companies

to invest in Egypt is encouraged by the

state’s long-term plans to increase clean energy

production in the country and its strategy to

boost the private sector investment in the field

by approving legislation and incentives that create

a better investment environment.

Decisions that support the renewables sector

The Egyptian Cabinet has approved several


Spotlight

increases in the land allocated for the Egyptian

Renewable Energy Authority to establish solar

and wind energy plants.

The Cabinet’s decision included a presidential

decree to allocate 10,000 km2 of stateowned

land in the New Valley Governorate for

the Renewable Energy Authority to establish

renewable energy plants.

The Cabinet also approved the President’s

draft decree to allocate a plot of land with an

area of about 46.7km2, from privately owned

state-owned areas in the Benban district of Aswan

Governorate for the Renewable Energy

Authority to establish renewable energy plants.

Why green projects in Africa?

Africa’s world-class wind, solar, and hydropower

resources are key to an easy and just energy

transition that would provide millions of

Africans with access to clean energy, promote

sustainable development, and alleviate poverty.

A study by the Pharos Center for Consulting

and Strategic Studies revealed that green

hydrogen would provide the African continent

with clean energy, decarbonize pivotal parts of

the global economic system, such as heavy industries,

shipping, and aviation.

The study indicated that if Africa maximizes

its role in the emerging hydrogen economy, the

continent will simultaneously respond to the social

and economic needs of its nations, address

energy poverty, and advance development.

The study further showed that producing

green hydrogen for local consumption and export

in Egypt, Morocco, Mauritania, Kenya, Namibia

and South Africa (member states of the

African Green Hydrogen Alliance) alone could

create up to 4.2 million new job opportunities

and raise their gross domestic product from

$66 million to $126 billion by the year 2050,

equivalent to 6-12% of the current GDP.


December 2023

37

In-Depth

Legacy in the

Making:

How Do Family

Businesses

Contribute

to Egypt’s

Economy?

Highlighting and exploring the potential and

impact of family businesses in Egypt and how

they can ensure continuity.

38 December 2023


In-Depth

By Nouran Allam

Family businesses

play a vital role

in the Egyptian

economy, accounting

for approximately 80%

of the national income and

75% of private sector activity,

according to data from

the Egyptian Center for

Economic Studies (ECES).

Data from ECES also shows

that at least 50 to 60% of

all businesses in Egypt are

family-owned and operated.

Family businesses in

Egypt are vital contributors

to job creation, playing

a key role in reducing

unemployment rates and

supporting livelihoods.

The ECES data shows that

family businesses make up

a staggering 70% of the

employment workforce in

Egypt.


December 2023

39

In-Depth

In 2021, PwC, the assurance, tax and business

consulting service provider, published its Egypt

Family Business report that surveyed 47 businesses

of varying sizes and sectors from August

to October 2020. The survey showed that 43% of

these businesses are both wholly based in Egypt

and work in more than one industry. Of these

businesses, 45% are co-owned by siblings.

Challenges and priorities of family businesses in

Egypt

Despite its influence and its huge contribution

to the Egyptian economy, family businesses

in Egypt are facing a succession problem. Ensuring

a smooth transition of leadership from one

generation to the next is often a significant challenge

for family businesses.

In Egypt, only 30% of family businesses continue

after the first generation and only 3% continue

after the second and third generations,

according to ECES data. This also applies globally,

where only 23% of family businesses make it

from the first to the second generation, 11% of

family businesses make it from the second to the

third generation, and 3% make it after the third

generation.

The lack of a clear succession plan can lead

to conflicts and eventually the potential downfall

of the business. PwC stated that 43% of the

surveyed respondents said they have yet to put

a dynamic strategic plan in place for the next 3

to 5 years.

In terms of family businesses’ concerns, the

PwC survey show that the top concerns for 45%

of respondents were cash flow and working capital

management. Protecting their people and

planning their workforce was a worry for 21%

of participants. Additionally, 9% expressed the

need for innovation or a change in their business

model, while 6% focused on digital transformation.

Another issue that family businesses often face

is access to external financing. Banks and investors

may perceive family businesses as higher

risk due to factors such as limited transparency,

informal business practices, and a lack of separation

between personal and business finances.

“Another challenge faced by family businesses

is the limited availability of forums that support

their activities and provide capacity-building initiatives

and awareness campaigns on the continuity

and expansion of family businesses. This

40 December 2023


In-Depth

lack of support hampers their growth and sustainability.

Recognizing these challenges, the

Egyptian Center for Arbitration and Settlement

of Non-Banking Financial Disputes (ECAS) took

the initiative to host a conference on family

businesses,” Executive Director of the Egyptian

Center for Arbitration and Settlement of Non-

Banking Financial Disputes Marian Kaldas told

Business Today Egypt.

Family businesses need funding to grow and

expand, and only 7% of them can get bank loans,

according to statements made by Vice President

of the Egyptian Exchange Heba El-Serafi during

the ECAS conference titled “Family Businesses:

Expansion and Continuity Opportunities.”

“The conference aimed to raise awareness

among family businesses about effective governance

practices and opportunities for expansion.

One of the primary challenges is the lack

of awareness regarding the governance of family

businesses and the importance of succession

planning. Many family businesses struggle with

effective governance and fail to plan for the

smooth transition of leadership to the next generation,”

Kaldas added.

In the context of family businesses in Egypt,

governance refers to the system and processes by

which a family business is directed, controlled,

and regulated. It encompasses the structures,

policies, and practices that guide decision-making,

accountability, and transparency within a

business. Effective governance mechanisms are

essential for ensuring the long-term sustainability,

growth, and success of family businesses.

Governance also plays a crucial role in the listing

process for family businesses wishing to go

public and trade their shares on the Egyptian

Exchange (EGX).

The PwC survey also shows Egyptian family

businesses’ top priorities during the economic

conditions. Firstly, improving profitability

emerged as a key focus for these businesses, then

came diversifying the market by entering new

markets or introducing new products, and finally

adjusting investment strategies to capitalize on

emerging opportunities or navigate challenging

economic conditions.

Success and growth pillars

Family businesses should focus on professionalizing

their operations and management practices

to prosper and grow. This involves adopting

modern business practices, establishing clear

governance structures, and listing their business

on the stock exchange.

“Family businesses should seek consultation

www.businesstodayegypt.com December 2023

41

In-Depth

with experts in the field such as law and auditing

firms. Restructuring experts can also provide

them with valuable insights and guidance. Such

expert advice can help them navigate challenges,

especially in areas such as governance, succession

planning, and expansion,” Kaldas stated.

During the ECAS family businesses conference,

the Chairman of the Financial Regulatory

Authority (FRA), Mohamed Farid, said that family

companies will benefit from many tax concessions

when registering on the stock exchange,

especially concerning dividend distributions,

mergers, and acquisitions plans. This would enhance

the companies’ capabilities to develop

their business, expand, and move forward to

increase their production capacity and achieve

better financial indicators.

“Overcoming the challenges encountered by

family businesses requires the implementation

of various strategies. Firstly, training and capacity-building

programs focused on the effective

governance of family businesses can enhance

their understanding and skills in managing their

operations and transitioning to the next generation.

Statistics have shown significant improvement

in the governance practices of companies

that engaged with those courses,” Kaldas said.

Furthermore, Chairman of the Egyptian Exchange

(EGX) Ahmed El-Sheikh stressed the

importance of listing on the stock exchange for

family businesses. Advantages include “the abil-

42 December 2023


In-Depth

ity to access the sources of financing necessary

for expansion, liquidity manifested in the ease of

buying and selling securities, and creating market

value for companies based on pricing their

shares according to supply and demand mechanisms.”

On the sidelines of the ECAS family business

conference, Chairman of the Committee of the

Financial, Economic and Investment Affairs in

the Egyptian Senate Hani Sarie-Eldin pointed

out that the EGX is the natural and main supporter

in cases of expansion and acquisitions for

family businesses and in terms of non-banking

finance to support and diversify the structure of

investors. He added that governance is a pivotal

factor in ensuring the continuity, success, and

sustainability of family businesses.

Chief Executive Officer of Edita Food Industries

Hani Berzi also advised large family businesses

to list on the EGX to maintain continuity

and increase good governance and transparency.

He mentioned that when Edita was listed on

the EGX in 2015, the company’s market value

almost doubled and its investor base expanded.

For family businesses to list on the EGX, they

need to comply with certain governance requirements

set by the exchange. These requirements

are designed to ensure transparency, protect the

rights of minority shareholders, and maintain

high standards of corporate governance. Some

key aspects related to governance that family

businesses need to consider when listing on the

EGX include:

• Board composition: Family businesses

should have a well-structured board of directors

with a balance of independent directors and

family members. Independent directors bring

external expertise and ensure objectivity in decision-making.

• Financial reporting and disclosure: Family

businesses need to adhere to strict financial reporting

standards and disclose relevant information

to the public. This includes publishing periodic

financial statements, annual reports, and

other disclosures required by the EGX.

• Related-party transactions: The EGX requires

transparency and proper procedures for

related-party transactions, which are transactions

between the family business and its owners

or affiliated entities. Such transactions should be

disclosed and conducted on fair terms.

• Investor relations: Family businesses need to

establish effective investor relations programs to

communicate with shareholders and the investment

community. This helps build trust, maintain

transparency, and provide timely and accurate

information to investors.

There are a few examples of family businesses

in Egypt that have chosen to list on

the Egyptian Exchange (EGX) to secure

continuity across generations:

Oriental

Weavers: listed

on the EGX in

1997 Examples of

Family

Businesses

Juhayna:

listed on

the EGX in

2010

PICO

Group: listed

on the EGX

in 2007

Amer Group:

listed on the

EGX in 2005

Sixth

of October

Development

and Investment

Company

(SODIC): listed

on the EGX in 1997

Talaat Mostafa

Group (TMG):

listed on

the EGX

in 1995

Ezz Steel:

listed on the

EGX in 1999

Elsewedy

Electric:

listed on

the EGX in

2006

Pioneers

Holding:

listed on

the EGX in

2007

Raya Holding

for Financial

Investments:

listed on the EGX

in 2005


43

In-Depth

Why Egypt is a

Good Market

for

Real Estate

Investment?

In 2023, the real estate sector in Egypt succeeded in

attracting investors from many countries such as the UAE,

Kuwait, Saudi Arabia, China, and the United States.

By Nourhan Magdi

The COVID-19 pandemic has led

to a surge in the need to work remotely,

with many today still working

from home or looking for more

flexible work arrangements, Egypt included.


In-Depth


December 2023

45

In-Depth

Naturally, the global and Egyptian housing

markets have been affected by this trending

rise of the concept of remote work, showing

a massive consequent transformation in the

real estate market.

The real estate market

The real estate market refers to real estate

transactions, including residential real estate,

such as houses and apartments, and commercial

real estate, such as office buildings and

industrial construction. The real estate market

also comprises the market of rental

contracts and property values.

The real estate market is an important

pillar of the global economy, with

an expected value of $613.60 trillion in 2023,

according to a Statista analysis. It plays a vital

role in developing the economy by offering

investors residential real estate, offices, as

well as industrial and logistical construction.

In recent years, Egypt has attracted more

foreign direct investment across multiple industries,

boosting demand for commercial

real estate in the country.

Egypt as a destination for real estate investment

Egypt ranks among the most important destinations

for real estate investment because of

its distinguished location, tourist attractions,

cultural diversity attracting investors from

different cultural backgrounds, and the supportive

role of the state, which contributes

to developing the sector.

In 2023, the Egyptian real

estate sector could attract

investors from many countries

such as the UAE, Kuwait,

Saudi Arabia, China, and the United

States. The volume of foreign investment in

the sector has reached $190 million. Albeit

not significantly large, this figure indicates

the attractiveness of the sector to foreign investment,

according to Hossam Haiba, the

CEO of the General Authority for Investment

and Free Zones.

In 2022, an in-depth analysis issued by Fitch

Ratings confirmed the Egyptian real estate

market maintains its position as a competitive

destination for foreign direct investment.

Fitch Ratings said continued investment in

the energy and public infrastructure sectors

will remain to be Egypt’s major driver of

growth on the long term because they create

opportunities for construction and heavy industries,

and support industries such as transportation,

banking, and financial services.

In November 2023, Egypt’s Information

and Decision Support Center (IDSC) issued

an analysis that sheds light on the massive development

in the real estate market as part

of the Egyptian state’s support for urban

development. The analysis explains that the

government launches projects in various governorates,

expands the construction of smart

cities, and introduces technology to digitize

the real estate sector to help enhance the

growth of real estate companies and the mar-


In-Depth

ket as a whole.

Divided into two sectors—the construction

sector, which specializes in constructing various

buildings and properties, and the real estate

activity sector, which includes real estate

ownership and business services—the real estate

market has witnessed remarkable growth

compared to other economic sectors, according

to the IDSC.

Data provided by the Ministry of Planning

and Economic Development shows the

construction sector contributed to the annual

growth rate of the total value added to

the cost of production factors, by 6.99% during

the year 2021/2022. The percentage in

the real estate activity sector reached about

3.24% during the same fiscal year.

Growth of the residential real estate market

in Egypt

According to the Mordor Intelligence

website, the size of the residential real estate

market in Egypt is expected to grow from

US$18.04 billion in 2023 to US$30.34 billion

by 2028, with a compound annual growth

rate of 10.96% during the 6-year period. This

growth is driven by an increasing demand for

residential units in major Egyptian cities, especially

Cairo, as well as by government real

estate initiatives and projects.

In September 2022, several construction

projects were announced in Egypt, including

residential projects in New Sohag Governorate,

the New Administrative Capital, New Alamein

City, a factory in the 10th of Ramadan

City, and a hospitality project in Fouka Bay in

the North Coast.

There are several reasons why investors are

attracted to Egypt’s real estate, including the

boom the Egyptian market is witnessing, the

appeal of certain areas to Arab investors and

the relatively low cost of capital and labor

needed to establish residential or tourism

real estate projects compared to Gulf countries.

Other contributing factors include the

Egyptian state’s efforts to attract more Arabowned

projects, overcome procedural barriers,

and provide facilitations to project

owners while also providing support for construction

projects across the country.

Lastly, favorable price points for foreign investors

continue to support positive demand

December 2023

47

In-Depth

for domestic commercial real estate stock.

Exporting real estate

In response to the economic turbulence

witnessed over the past few years, Egypt has

taken the step of exporting real estate, which

means that developers can sell their units

to foreign buyers, or Egyptian buyers living

abroad who can pay in foreign currencies.

In collaboration with the private sector, the

government has moved swiftly to facilitate the

sale of real estate to foreigners and Egyptians

living abroad through participation in international

exhibitions to promote the concept

of investing in Egyptian real estate.

In a similar context, Prime Minister Mostafa

Madbouly inaugurated on June 1 the fifth

edition of the Builders of Egypt forum, under

the rubric “Exporting Egypt’s Real Estate and

Contracting Services: A New Future of Investments,”

with more than 500 Egyptian, Arab,

and African high-profile officials and business

executives taking part to achieve integration

among the continent’s nations, local media

reports.

Further, the Egyptian state launched Beit

al-Watan project, which aims at encouraging

Egyptians abroad to invest in properties in

Egypt, providing numerous incentives to increase

the demand.

In December 2019, the Egyptian state provided

facilitations and incentives for foreigners

to invest in real estate, including citizenship

and residency, in accordance with the


In-Depth

Prime Minister’s Decision No. 3099 of 2019,

which regulates cases of granting the Egyptian

nationality to foreigners.

Fourth-generation cities

Within just 5 years, the map of Egypt

changed, and the urban area increased from

7% to 14% thanks to the 4th generation cities

launched in 2018 and comprising 22 new cities,

including the New Administrative Capital,

New Alamein, Al-Galala, New Mansoura, New

Sohag, and New Beni Suef. These new cities

represent Egypt’s vision of the future urban

expansion that increases the inhabited area

and spares cities overcrowding problems.

Real estate market expectations in Egypt

The Egyptian real estate market is expected

to continue to grow on the long term, according

to Fitch, which explained that this growth

will be driven by the strength of the commercial

real estate sector in Egypt as a result of

the state’s ongoing efforts in establishing new

cities.

These efforts are set to enhance real estate

investment in Egypt, as new cities, especially

the New Administrative Capital, New Alamein,

and New Mansoura, provide potential

investors with attractive and large-scale opportunities

for real estate projects.


December 2023

49

In-Depth

The Know How:

Localizing

the Locomotive

Industry in Egypt

50 December 2023


In-Depth

By Noha El Tawil

Photography by Maher Eskander, Karim Abd El

Aziz and Khaled Kamel

Why global companies are building

locomotive factories in Egypt.

In the framework of the journey Egypt has

embarked on to develop the railway network,

the government seeks to localize the

locomotive industry in partnership with

the private sector to curb import in the future.

Hence, the Ministry of Transport has signed

several deals with global companies to build factories

that would produce various locomotive

products locally.


51

In-Depth

Alstom

The Egyptian Cabinet approved in principle

in July an investment plan by French company

Alstom to establish two factories in Alexandria

that would create 1,200 job opportunities for

Egyptian engineers and technicians.

One factory would be dedicated to the production

of electrical systems and railway components

such as signals, panels, electrical circuits

for control, and electrical braids, among others.

The other would manufacture all types of mobile

units of metro lines, trams, LRT, monorail, express

trains, and other means of transport.

Talgo

In March, a cooperation protocol was signed

between the Egyptian Railway Authority (ERA)

and Spain’s Talgo for the company to build a factory

in Egypt to produce railcars.

Minister of Transport Kamel El-Wazir stated

that the plant would be built in Beni Suef’s Kom

Abou Rady on a surface area spanning over 20 feddans

(90,000m2) next to the railway workshops.

Each of the first and second phases of the

plant comprises the manufacturing of 50 trains

by Egyptian engineers and workers, but under

the supervision of Spanish experts. Also, the local

component is planned to be 45%.

Flange Factory

The Egyptian Company for Self-Maintenance

for Roads and Airports announced in July that

the pilot operation of the RFI-260 concrete

flange factory had started. The plant’s cost is

EGP 500 million, and is intended to cater to the

high-speed electric train.

Voestalpine Railway

On July 3, the Egyptian Railways Authority

(ERA) and Austria’s Voestalpine Railway systems

signed an agreement to jointly produce highperformance

turnouts in an existing plant in

Cairo’s Abbaseya.

SEMAF and Hyundai Rotem

The Railway Equipment Factory (SEMAF), affiliated

to the Arab Organization for Industrialization,

is part of a $656-million deal with South

Korea’s Hyundai Rotem to manufacture and

supply 32 air-conditioned metro trains for Line

3, as well as to assemble 10 others.

The Korean government, represented by the

Economic Development Cooperation Fund, provides

$460 million of the project’s cost. In August,

the factory delivered the first train to the

National Authority for Tunnels.

Skoda

A contract was signed between ERA and

Czechia’s Skoda in June to overhaul 280 train

52 December 2023


In-Depth

engines, carry out maintenance, and supply

parts for 15 years.

The train engines are divided into 218 Henschel-Wegmann

units, and 62 Editranz units.

The contract provides that two engines would be

fully overhauled in Czechia in the presence of a

number of Egyptian engineers and technicians

to better transfer experience.

The rest would be overhauled at ERA’s Tebin

workshops so that the local component would

make up 25-40% of the parts installed for 138

train engines, while the percentage would go up

to 50% in the remainder of the units. There is

also a target for Egyptian workers to compose

90% of labor involved in the overhauling process.

With regard to the parts used in maintenance

works, locally manufactured ones are set to compose

40% and gradually increase to 60%.

Steps taken to develop railways in Egypt

It all begins with train engines, as 130 out of

260 planned new units have already entered service.

Also, 61 out of 400 designated train engines

have been rehabilitated. This is half the number

of engines Egypt owns. Further, five out of six

Talgo trains have begun operation, while 770

out of 1,350 new railcars have been supplied.

A contract worth €1 billion was signed with

Transmashholding in 2018 to supply 1,300 railcars.

These include 500 dynamic-ventilation

third-class units, 500 air-conditioned third-class

units, 180 air-conditioned second-class units, 90

air-conditioned first-class units, and 30 air-conditioned

cabooses. The deal was a must, given that

only 2,200 passenger railcars out of 3,200 were

functional.

As the plan equally focuses on the development

of the freight fleet, 133 new well cars have

been supplied.

Speaking of railroads, 653 of those were overhauled,

and 857 kilometers were renovated.

Also, some railroads are being transferred into

railway bridges.

Renovations extended to cover 1,727 railroad

switch and lock keys, signaling systems, and 364

train stations. In addition, the upgrade of 60 stations

in the countryside is in progress as part of

the Haya Karima initiative.

Development works include installing automatic

ticket gates and automated ticket vending

machines (ATVM). Most importantly, the stations

will be more accommodating to passengers

with disabilities by introducing club cars, special

tracks and ticket windows, as well as wheelchairs

for the elderly.

The ministry has also been delivering training

to railway workers, and modernizing the railway

workshops of Kom Abou Rady, Abou Zaabal, and

Al-Farz.


53

Gaza in the

Crossfire: Regional

Impacts and

Economic Boycott

Explore Gaza’s events, from the timeline of the war to

Egypt’s diplomatic efforts, delving into regional and economic

repercussions, including the impact of a widespread boycott.

In-Depth

A Timeline

of Egypt’s

Israel’s war on

Efforts

Business Today Egypt presents the

timeline and key developments of

Israel’s war on Gaza and reviews

Egypt’s fundamental role in the

mediation between Hamas and Israel

to end the airstrikes.

By Jehad El Sayed and Amr Kandil

Since October 7, 2023, Israel has

intensified airstrikes in and

around the Gaza Strip, with

clashes also arising in the West

Bank and on the Israeli–Lebanese borders.


Earlier on that day, Hamas had launched

a multi-pronged invasion of southern Israel

from Gaza in response to the blockade imposed

on the strip since 2007, the expansion of

illegal Israeli settlements, the rising Israeli settler

violence, and other recent escalations.

Undeniably, the attack was a culmination of

the historical oppressive practices of the Israeli

occupation, which has been illegally taking over

Palestinian lands since 1967. The war that Israel

started in October has forever changed the

region, so far leaving more than 20,000 Palestinians

killed and 50,000 wounded, the majority

of whom are civilians (mostly women and children),

and worsening humanitarian conditions

under the total blockade Israel has imposed on

Gaza since then.

The huge loss of human life due to the Israeli

airstrikes as well as the further imminent loss

due to hunger and diseases in the strip led UN

Secretary-General Antonio Guterres to use Article

99 of the UN Charter for the first time since

1971 to call for the intervention of the Security

Council to stop the war.

Egypt’s positive role to find a diplomatic solution

Since the outbreak of the war, Egypt has been

playing a positive role in mediating between

Israel and Hamas and directing them toward

de-escalation. As the only Arab country that

borders the Gaza Strip, Egypt has also taken an

active role in negotiating the delivery of aid for

the people of Gaza through the Rafah crossing

and in negotiating hostage releases, while simultaneously

advocating for a ceasefire.

Business Today Egypt presents the timeline

and key developments of Israel’s war on Gaza

and reviews Egypt’s fundamental role in the

meditation between Hamas and Israel to end

the aggression.


December 2023

57

In-Depth

The Israeli military conducted

an extensive aerial bombardment

campaign on Gaza.

What happened after October 7?

Palestinians fled in a mass exodus from northern

Gaza after Israel’s military told some 1 million

people to evacuate to the southern part of the

besieged territory ahead of an expected ground

invasion in retaliation for the surprise attack by the

ruling Hamas militant group.

Egyptian President Abdel

Fattah El-Sisi warned that “the

idea of displacing Palestinians

to Sinai means dragging

Egypt into a war against

Israel.”

Oct. 8 Oct. 13 Oct. 18

Oct. 12

Oct. 17

Egypt, the US, and many European countries discussed plans

to provide humanitarian aid to Gaza under a temporary

ceasefire. Aid convoys carrying life-saving supplies from

Egypt lined up at the Egyptian border crossing waiting for an

agreement that would allow the border to open.

A deadly explosion at Al-Ahli

Baptist Hospital in Gaza City

claimed the lives of at least 500

Palestinians.

The Cairo Summit for Peace was held

in the New Administrative Capital

(NAC) as part of Egypt’s efforts to

support the Palestinian cause. The future

of the peace process and means

to reach de-escalation in the Gaza

Strip were discussed.

A second convoy of

14 aid trucks entered

the Rafah crossing from

the Egyptian side to the

besieged Gaza Strip.

An Israeli airstrike killed dozens of

people in Jabalia refugee camp in

northern Gaza. Gaza’s Health Ministry

said 50 people were killed and

150 were wounded, but a nearby

hospital said it received 400 casualties,

including 120 dead.

Oct. 21 Oct. 23 Oct. 31

Oct. 22

Oct. 25

A first convoy of 20 trucks arrived in Gaza through the Rafah

crossing, but efforts to deliver supplies to the besieged strip are

held up by Israeli demands to verify aid.

Israeli forces carried out their biggest

Gaza ground attack in their

20-day-old war with Hamas.


In-Depth

For the first time since the

war began ambulances were

allowed to transport seriously

injured Palestinians from Gaza

into Egypt. Seventy-six injured

Palestinians and a group of

335 foreign passport holders,

including British nationals,

were also allowed to leave

via the Rafah crossing.

Nov.1

Israeli tanks advanced

on Gaza City's Al-Shifa

Hospital, with some 650

patients still inside. Israel

claimed the hospital sits

atop tunnels housing

headquarters for Hamas

fighters using patients as

shields. Hamas denied the

allegations.

Nov. 13

A Four-day truce between Israel and Hamas

was announced by the Egyptian foreign minister

and the U.S. secretary of state. Under the truce,

guaranteed by Egypt on the Palestinian side,

Israel agreed to “stop all hostilities in the Gaza

Strip by land, sea, and air including incursions

and targeting of individuals.” In exchange, “all

Palestinian factions shall stop all hostilities from

the Gaza Strip against Israel including rocket

attacks and all attacks along the border.”

Nov. 21

Nov. 3

Nov. 15

Over 100 aid trucks entered Gaza

in a day for the first time since the

start of Israel-Hamas war.

Israeli special forces stormed Al-Shifa Hospital and

searched the site, which covers more than 20 acres,

with patients still inside.

A temporary truce in the Israel-Hamas war took

effect, setting the stage for the exchange of

dozens of hostages held by Hamas in Gaza for

the Palestinians imprisoned in Israel. This came

as a result of Egypt’s and Qatar’s mediation.

Hamas handed over 13

Israeli hostages and four

foreigners to the International

Committee of the

Red Cross.

Hamas freed 10 Israelis and two

foreign nationals in exchange

for the release of 30 Palestinians.

Nov. 24 Nov. 25 Nov. 28

Nov. 24

Nov. 27

Hamas released 24 hostages who were handed over at the

Rafah border crossing, including 13 Israelis, 10 Thais, and a

Filipino. The Israeli hostages included four children accompanied

by four family members, and five elderly women. Thirty-nine

Palestinian women and children were released from Israeli jails

as part of the deal.

Hamas freed 17 hostages held in Gaza,

including a 4-year-old American girl,

while Israel released 39 Palestinian prisoners

on the third day of the truce.


December 2023

59

In-Depth

The Ministry of Health and Population

in Egypt, in collaboration with

the Terous Misr Foundation for Development,

an NGO, and Nestlé

Egypt, a private bottled water

brand, initiated a program aimed

at providing medical treatment to

1,000 children injured in the Gaza

Strip during Israel’s attack.

On Friday, shortly after the expiration of a

week-long truce without an agreement to

extend it, Israeli fighter jets launched a series

of airstrikes on the Gaza Strip. Egypt, through

a statement issued by the Ministry of Foreign

Affairs, strongly denounced the collapse of

the ceasefire in Gaza and expressed condemnation

toward the resumption of intense Israeli

airstrikes and military operations.

A group of 23 injured

Palestinians from the

Gaza Strip arrived at the

Rafah Crossing to receive

medical treatment in

Egypt.

Nov. 29 Dec. 1 Dec. 4

Nov. 30

Following extensive and lengthy discussions held

throughout the day and into the night with mediators

in Doha, Israel and Hamas jointly declared a one-day

extension to the six-day-old truce in the war on Gaza.

Dec. 2

The Wall Street Journal reported that Egypt and Qatar

are persisting in their efforts to reinstate the Israel-

Hamas truce, which collapsed when the Israeli side

resumed their brutal bombardment of the Gaza Strip.

The Arab group at the United Nations Security Council

(UNSC), including Egypt, announced their work on a

draft resolution calling for an immediate ceasefire in the

war-ravaged Gaza Strip. Simultaneously, Egypt’s Ministry

of Health and Population disclosed the distribution of 27

medical scanning devices to hospitals across eight Egyptian

governorates, including North Sinai, in anticipation of

receiving injured Palestinians from the Gaza Strip.

The Ministry of Foreign

Affairs in Egypt has introduced

a Google form as the

exclusive method for receiving

requests from Egyptians

stranded in the Gaza Strip

who wish to return home.

Egypt announced its decision

to utilize the Karm Abu Salem

border crossing from December

12 onwards to expedite

the delivery of aid to the Palestinians

living in the besieged

Gaza Strip.

Dec. 6 Dec. 9 Dec. 12

Dec. 7

Diaa Rashwan, head of Egypt’s State Information Service (SIS), affirmed

that Israel aims to force Palestinians to vacate their lands and

relocate to what they describe as safe areas in southern Gaza near

Rafah. Rashwan warned of an Israeli strategy to expel Palestinians,

depopulate the Gaza Strip, and destroy the Palestinian Cause. He

emphasized that Egypt will never allow this to occur.

Dec. 11

According to a statement from the Egyptian Red Crescent

(ERC), more than 100 trucks filled with humanitarian aid,

including food, water, and medical supplies, were delivered

to the Palestinian counterpart of ERC for distribution

among the residents of Gaza who are under siege.


In-Depth

Al Jazeera journalist Abu

Daqqa was reporting

from a school in Khan

Yunis when he was struck

and killed during a drone

attack.

A humanitarian aid convoy crossed into the war-torn Gaza Strip

through the Israeli Karm Abu Salem border crossing. Meanwhile,

Osama Rabie, Chairman of the Suez Canal Authority (SCA), revealed

that 55 ships had diverted from the Suez Canal route to the Cape of

Good Hope route since November 19. This diversion represents a small

percentage compared to the passage of 2,128 ships during the same

period. These changes occurred amidst ongoing tensions in the Red Sea

due to attacks by the Iran-backed Houthi rebels.

Dec. 15 Dec. 17

Dec. 16

Egypt’s Journalists Syndicate strongly condemned the killing of Abu Daqqa by Israel, considering it a premeditated

murder and a heinous war crime. The syndicate expressed its readiness to collaborate with international

efforts to bring murderers of dozens of journalists to justice before the International Criminal Court

as war criminals. In a significant shift in position, the UK Foreign Minister David Cameron and his German

counterpart Annalena Baerbock stated the urgent necessity for a sustainable ceasefire in Gaza. The following

day, France also called for an immediate and lasting truce in the ongoing Gaza war.

President Abdel-Fattah El-Sisi, who won a third

term in re-election with 89.6% of the votes, emphasized

that the 2024 Egyptian election reflects

the international community’s rejection of Israel’s

inhumane war rather than being merely an election

of a president.

During a press briefing alongside British Foreign Secretary

David Cameron, Egypt’s Foreign Minister Sameh

Shoukry stated that Egypt is currently coordinating with

neighboring Red Sea countries to ensure the security of

maritime navigation.

Dec. 18 Dec. 21

Dec. 20

Ismail Haniyeh, the leader of Hamas, arrived in Cairo to engage in discussions with Egyptian officials

regarding a ceasefire in Gaza and a potential prisoner exchange. This visit followed Israel’s

willingness to agree to another pause in the conflict in exchange for the release of more captives.


December 2023

61

In-Depth

Egypt welcomed the step

to establish an international

mechanism aimed at

facilitating the delivery of

essential humanitarian aid

to the Gaza Strip, which is

in dire need of assistance.

A delegation from the Palestinian

Islamic Jihad Movement (PIJ), led

by Ziad Nakhaleh, the movement’s

secretary-general, arrived

in Egypt to engage in discussions

on how to halt the Israeli offensive

in the Gaza Strip. The delegation

also aimed to explore the necessary

measures to reach a new

agreement regarding a prisoner

exchange.

A flying object was intercepted and

brought down approximately two

kilometers off the coast of South Sinai’s

Dahab, Egypt. Witnesses in the city reported

hearing explosions in the vicinity.

Meanwhile, an Egyptian source stated

that the country’s proposal for a ceasefire

in Gaza is still in its preliminary

stages, adding that a comprehensive

proposal will follow later after all parties’

approval.

Dec. 22 Dec. 24

Dec. 26

Dec. 23

Iranian President Ebrahim Raisi made a phone call to Egyptian

President Abdel-Fattah El-Sisi on Saturday to discuss

the latest developments in Gaza. This phone conversation

marks the first time the two presidents have spoken directly,

as reported by Iranian state TV. Meanwhile, reliable sources

from Egypt denied the reports by Israeli media claiming that

the Israeli army is operating in the Philadelphi corridor along

the Gaza-Egypt borders.

Dec. 25

According to a senior Egyptian official

and a European diplomat, Egypt has

presented an ambitious initial proposal to

bring an end to the Israeli war in Gaza by

implementing a ceasefire.


In-Depth

In response to the humanitarian crisis in Gaza and to accommodate

displaced Palestinians who were forced out of their homes in

northern Gaza due to Israeli airstrikes, the Egyptian Red Crescent

commenced the establishment of a refugee relief camp in Khan

Younis, located in southern Gaza. This initiative is being carried

out under the guidance of the Egyptian leadership. Furthermore,

Minister of Health and Population Khaled Abdel-Ghaffar informed

the Egyptian cabinet that Egyptian hospitals have provided care

for over 20,000 injured Palestinians from Gaza thus far.

Dec. 27

Al-Azhar, Egypt’s prominent Islamic

institution, announced that its Zakat

and Charity House organized the

fourth aid convoy, which departed for

the Rafah border crossing. The convoy

aims to deliver essential relief supplies

to the Palestinians in the besieged

Gaza Strip.

Dec. 29

Dec. 28 Dec. 30

At the Rafah border crossing, 12

wounded Palestinians and their 10

companions arrived from hospitals

in Gaza to receive medical treatment

in Egypt.

Through the Rafah crossing, a total

of 50 aid trucks, including four fuel

trucks, entered the Gaza Strip to

provide much-needed assistance to

the region.


December 2023

63

In-Depth

The War on Gaza:

Assessing

the Impact on

Neighboring

Countries

As the Gaza war escalates, an

early assessment by ESCWA and

UNDP reveals potential economic

upheavals in neighboring nations.

By Hanan Mohamed

Exploring the potential effects of the

Gaza war on Palestine’s neighboring

countries—namely Egypt, Jordan, and

Lebanon—the Economic and Social

Commission for Western Asia (ESCWA) and

the United Nations Development Programme

(UNDP) conducted an early assessment of the

expected economic and human impact of the

continued aggression.

These effects, if realized, would compound

existing vulnerabilities in these nations, which

are still grappling with the aftermath of previous

shocks, according to the recent study.

But while the study indicates that regional effects

of the Gaza war have thus far been contained,

the short-term significance raises concerns. Continued

war escalation poses a risk of substantial

spillover effects on Palestine’s immediate neighbors.

These countries face limited policy space

to address such impacts, given existing structural

gaps and recent challenges like the pandemic and

the war in Ukraine. The potential longlasting effects

of the Gaza war could intensify, particularly

if it involves other nations in the region.

Impact on surrounding countries

The projected fallout from the Gaza war is

based on several assumptions and models; first,

as the war is already in its third month—and

has resumed with significant intensity after the

short humanitarian pause and partial release of

Israeli/Palestinians hostages—the predictions

only refer to likely impacts during the first three

months and after a hypothesized six-month war.

Second, the war is assumed to be contained within

Israel and the occupied Palestinian territory,

the latter including rising incidents in the West

Bank. Third, Israeli trade relations with Egypt

and Jordan will be maintained. Fourth, the tourism

sector will suffer a sizable hit during the assumed

duration of the war. Fifth, there will be

no change in the price of oil and gas. Sixth, the

impact on the global economy is likely to remain

diminished.

Assuming a three-month war scenario, with

potential extension to six months, the analysis

focuses on various factors. The war is assumed

to be contained within Israel and the occupied


In-Depth

Palestinian territory, with maintained trade relations

between Israel and Egypt/Jordan, and no change in

oil and gas prices globally.

The tourism sector is expected to suffer significantly

due to reduced international tourism in the last

quarter of 2023 and subsequent diminished arrivals.

The drop in tourism owing to the slowdown in economic

activity could lead to a combined GDP loss in

the three countries of 1.3% of total GDP in 2023 from

its baseline (equivalent to $5.7 billion). If the war continues

for six months, the GDP loss could reach 2.1%

from its baseline ($9.5 billion).

If the war were to last three months, the combined

GDP loss in Egypt, Jordan, and Lebanon is estimated

at 2.3% ($10.3 billion). Extended to six months, the

GDP loss could increase to 4% ($18 billion).

The estimated GDP loss is anticipated to impact

poverty levels, with around 230,000 people at risk of

falling into poverty under the three-month scenario.

In the case of a six-month war, this number may exceed

half a million people. The potential regression

of human development, measured by the Human Development

Index, is also highlighted, varying in speed

across the three countries, particularly in the event of

a prolonged six-month war.

Egypt

The study indicates that the Gaza war is already affecting

Egypt, due to its geographic location and its existing

economic relations with Israel.

It defined the results of the war in Egypt as the halt

of gas supply to Egypt at the end of October 2023 due

to a suspension of production, and then resumed at

reduced volumes. In addition, like in Palestine’s two

other neighbors, tourism has declined, the economy

is already strained, and the social sectors are under

significant stress.

“The inflation rate is persistently high, the currency

is depreciating, Egyptian debt has been downgraded,

and investor confidence has significantly declined followed

by large capital outflows,” the study added.

Egypt had already been affected significantly by

the outbreak of the war in Ukraine, given its reliance

on food imports from both the Russian Federation

and Ukraine.

On the social front, inflation has been eroding

household purchasing power, and poverty remains

high. Furthermore, Egypt was already dealing with

challenges on its southern border after thousands

of refugees fled the Sudan war, the study highlighted.

Jordan

Due to its close proximity to the conflict and established

economic connections with Israel, the Jordan faces

a range of socioeconomic, diplomatic, and security

challenges stemming from the Gaza war. As the primary

supplier of natural gas to Jordan, Israel’s involvement

in the conflict has led to frequent and substantial demonstrations

nationwide. Civilian boycott campaigns

targeting brands associated with Israel pose a potential

impact on retail activity and employment.

The crucial tourism sector, a significant contributor

to GDP, has already experienced a significant

decline, and its revival before mid-2024 remains

uncertain. With limited fiscal flexibility, the government

may face challenges in implementing counter-cyclical

policies if economic activity significantly

decreases or security spending needs to rise. High

levels of debt servicing are diverting resources

that could have otherwise been directed toward

infrastructure investment or social protection.

Unemployment persists at elevated rates, and

while energy and food price increases have been

contained, the purchasing power of vulnerable

households has not seen improvement.

Additionally, recent reductions in humanitarian

assistance for Syrian refugees are expected to

have adverse fiscal and welfare implications for

the country.

Lebanon

In Lebanon, the repercussions of the Gaza war

have been severe, with nearly 100 casualties and tens

of thousands displaced due to heightened tensions

along its southern border. The impact includes the

closure of schools, damage to public infrastructure,

and a sharp decline in tourism. These grim socioeconomic

conditions are anticipated to deteriorate

further, encompassing ongoing GDP contraction,

unmanageable inflation, elevated unemployment,

and increased poverty. The situation is exacerbating

the need for assistance, with millions in the

country requiring urgent support.

As the aggression continues, the study recommended

an immediate ceasefire to reverse the

destruction that the Gaza war has inflicted on

the region, including its dangerously escalating

economic costs.


December 2023

65

Opinion

Reasons for Egypt’s

Continued Adherence

to the Peace

Agreement with Israel

By Prof. Mohamed A. Elchime

Egyptian-Israeli relations have gone

through quite a few stages of turmoil

since the signing of the peace treaty

in 1979. These include the Lebanon

wars, the rolling Israeli military campaigns in

Gaza, aftermath of the Arab protests in 2011,

and lastly the ongoing war between Israel and

Hamas, which represents a new test for the bilateral

relations, as it entails the potential for a

complete deterioration of the ties between the

two countries.

In general, Egypt and Israel have one clear

interest in common: destroying the military capabilities

of both Hamas and Islamic Jihad, and

returning the Palestinian Authority to the Gaza

Strip if possible. This goal is strongly supported

by a few Sunni countries in the region, even in

days of calm.

Egypt continues to adhere to the peace agreement

with Israel for a number of reasons, including

security, economic, political and domestic

considerations.

The peace agreement led to Israel’s withdrawal

from the Sinai Peninsula, which strengthened

Egyptian national security in a number of ways.

First, it eliminated the threat of a direct Israeli

invasion of Egypt from the east. Second, it gave

Egypt control over the strategic Strait of Tiran,

which allows it to regulate maritime traffic to and

from Israel and Jordan. Third, it allowed Egypt to

maintain a demilitarized zone in the Sinai Peninsula,

which helps to reduce tensions between the

two countries.

The peace agreement also led to increased

economic ties between Egypt and Israel. Bilateral

trade has increased significantly since the

signing of the agreement, and Israeli companies

have invested heavily in Egypt. This has helped

to create jobs and boost economic growth in

Egypt.

Politically Egypt views the peace agreement as

a major diplomatic achievement that has helped

to improve its regional and international standing.

The agreement has also been regarded as

a positive step towards achieving peace in the

Middle East.

The majority of Egyptians support the peace

agreement, and consider it a key pillar of the

Egyptian foreign policy. Domestic opposition

to the agreement is relatively weak, and comes

mainly from Islamist extremist groups.

In addition, Egypt enjoys a number of incentives

in return for maintaining the peace agreement

with Israel. For instance, the significant

economic and military assistance that Egypt receives

from the United States is conditioned by

Egypt’s continued adherence to the peace agreement.

Egypt also benefits from its close ties with

Israel in terms of intelligence sharing and security

cooperation.

The peace agreement between Egypt and Israel

has been in place for over 40 years, and it has

played an important role in maintaining stability

in the Middle East. However, the agreement

comes with its challenges. The ongoing conflict

between Israel and the Palestinians continues

to generate tensions between the two countries,

with a rising risk that public support for the

agreement could decline if the conflict remains

unresolved.

The current war puts Egypt before three challenges

that the country has not encountered before,

at least not with such severity. The first challenge

is the fear that thousands of Palestinians

(from the 2.3 million people residing in Gaza)

will want to flee the strip towards Sinai through

the Rafah crossing. Although the crossing is

now closed, it will be difficult for Egypt to pre-

66 December 2023


Opinion

vent their escape from the humanitarian crisis

in Gaza.

Egyptians still remember how thousands of

Palestinians blocked the road to Sinai in 2008

shortly after Hamas took over Gaza and the water

and fuel shortages prevailed.

The unofficial Israeli statements calling on

Palestinians to flee to Sinai were met with concern

and anger in Egypt, which urged Israel to

issue several official denials of these statements.

President Abdel Fattah El-Sisi has made it

clear that he will not allow Egypt’s national security

or sovereign borders to be harmed. Meanwhile,

Egyptian sources report that there is fear

of the suggestions put forward by the West regarding

the settlement of Palestinian refugees in

Sinai. Egyptians have already rejected American

requests to receive Palestinians coming from the

Gaza Strip.

The second challenge is Egypt’s position and

role in the current crisis. Egypt traditionally

views itself as the appropriate mediator between

Israel and Hamas due to its geographical proximity

and historical role in the Palestinian issue.

The third challenge is the government’s need

to assuage popular opinion that supports the

Palestinians, even if their support is not specifically

directed at Hamas. Thus, as the humanitarian

crisis in Gaza worsens, voices will continue to

grow within Egypt (and the Arab World), calling

for intervention and the suspension, or even the

severance, of relations with Israel.

Egypt’s relations with Israel could be gradually

deteriorating because of a myriad of the Israeli

actions, such as issuing irresponsible statements

similar to the Israeli Minister of Education Yoav

Kisch’s call for Palestinians to leave Gaza to

Egypt, and publishing fake news that Egypt had

warned Israel of a Hamas attack, which was denied

by Egyptian officials. Other reasons include

Israel’s selecting of another Arab mediator, and

most importantly further worsening the humanitarian

situation in Gaza, which would lead to

public pressure on the government to take tangible

steps against Israel.

Israel’s relations with Egypt represent the

cornerstone of its relations with Middle Eastern

countries. Therefore, its relevant decisions must

be made in close coordination with Egypt, or

its relations with other Arab countries might be

compromised, creating a major obstacle regarding

the space for Israeli action in Gaza.


67

In-Depth

Boycotts:

Impact on Economy

and Investments

In the aftermath of the war on

Gaza, Egypt has been at a

crossroads, with widespread calls

for boycotting foreign companies

accused of supporting Israel.

By Hanan Mohamed

Since the outbreak of the war on Gaza,

calls for a broad boycott of all products

of foreign companies and brands allegedly

supporting Israel have been on

the rise in Egypt.

Lists of the companies facing this accusation

have been circulated on social media with the

call to boycott them and buy local products instead.


In-Depth


December 2023

69

In-Depth

The boycott lists include soft drinks, tea and

coffee products, and American and European

fast food chains.

The past few months have witnessed many

people joining the boycott campaign and

searching for local alternatives.

At the same time, many local companies

began to advertise their products and benefit

from the momentum accompanying the boycott

campaign. For instance, an Egyptian soft

drink company that was established in 1920

announced that it has recently achieved huge

sales and would thus launch new production

lines and work to further improve their products.

The boycott also prompted many international

brands to announce significant discounts

on their products, and some spoke of incurring

losses of millions of dollars. This urged

companies such as McDonald’s to issue statements

confirming that they do not support any

country or governmental entity and completely

reject violence. McDonald’s agent even announced

a financial donation to the Palestinian

people.

History of boycott targeting companies “supporting

Israel” in Egypt

According to the Egyptian Center for Strategic

Studies (ECSS), boycott campaigns against

companies that reportedly support Israel in its

repeated aggression against the Palestinians go

way back, and soared in Egypt in 1988 after the

outbreak of the Stone Intifada in the West Bank

and Gaza Strip. Many Egyptians considered the

intifada a scream in the face of injustice, and

deemed boycotting such companies a way to express

their solidarity with the Palestinians.

After the Stone Intifada in 1988, there was another

boycott campaign at the breakout of the

Second Palestinian Intifada in 2000, and at the

issuance of a government decision banning the

import of products from Israeli settlements in

the West Bank in 2022.

The ECSS said that as a result of recent developments

in the Gaza Strip, the boycott of

global companies supporting Israel saw new levels

in 2023. Egyptians view the recent conflict

between Hamas and Israel as a culmination of

Israel’s oppression of the Palestinians.

This boycott campaign has led to noticeable

economic impacts in Israel. Israeli exports to

Egypt declined by 20% in 2023, and Israeli investments

in Egypt declined by 15%.

However, the ECSS stated that calls for a boycott

face some challenges, including the lack of

awareness of the importance of the boycott and

the most effective ways of doing it. There is also

a fear that the boycott could affect the Egyptian

economy, especially in light of the inflation and

the decline in the value of the Egyptian pound.

Pros and cons of the boycott

Alaa Ezz, secretary-general of the General


In-Depth

Federation of Chambers of Commerce, said

during a phone-in: “We, as the Federation of

Chambers of Commerce, worked with the Islamic

Chamber as a fund to support Palestine,

and a large portion of the convoys are coming

from us. There is no doubt about our support

for the Palestinian people, but we also support

Egypt.”

Ezz claims that international companies’ revenues

from the Arab World is relatively “insignificant”

compared to their overall revenues,

and therefore the punitive aspect of the boycott

would not have a tangible effect. “The evidence

is that the shares of the boycotted companies

rose by 15-20%,” he explained.

On boycotting the fast food chains, Ezz noted

that the food industry sector alone employs

more than 3 million workers directly and indirectly.

He added that every worker in every company

has 10 others in other industries in production

cycles, and the share of the Egyptian or Arab

investor and the companies serving them constitutes

95% of the revenues.

Economic expert Mohamed Anis agreed with

Ezz, stating that the boycott may have marginal

effects on the overall revenues of the parent

company, significantly impacting only local investment.

Anis defined local products as whatever carries

the “Made in Egypt” label, even if it is a foreign

brand. In other words, any product manufactured

in Egypt is part of the local industry

and competes with other local products.

He elaborated that the boycott should strictly

target foreign products. For instance, a Pepsi

can manufactured in Egypt and priced at EGP

10 is a local product, while a can of the same

soft drink made in England and priced at EGP

60 is an imported product that a consumer may

boycott if they wanted to.

“The boycott should be based on investment

and economic reasons, where we should buy the

high-quality Egyptian alternative to the product

which does not contribute to production and

results in dollar expenditure without any dollar

returns. The individual consumption behavior

should be adjusted to boycott such products,”

he reiterated.

Meanwhile, economic expert Ashraf Ghorab

said that calls for boycotting foreign products

help reduce imports, thereby alleviating pressure

on the dollar reserves. This also plays a

role in boosting the national industry by replacing

imports with local products, ultimately enhancing

the national economy.


December 2023

71

In-Depth

Ghorab shed light on $10 billion of foreign

investments in the last fiscal year, with expectations

to increase to $12 billion with the expansion

of the offerings program.

Sally Ashour, a researcher at the ECSS, reviewed

in a recent report the advantages and

disadvantages of the boycott. The recent boycott

has reduced demand for foreign brands by

30% and encouraged demand for many locally

made products. Sales of local companies, especially

of food and beverages, increased. The

boycott campaign also lent a helping hand to

the companies that have been in the Egyptian

market for decades and were unable to compete

with “international brands.”

Further, Ashour stated that the boycott campaigns

helped a number of the local companies

flourish, increase sales, introduce new products,

and establish production lines to meet

the increasing demand. “We can call for the

renewal of the ‘Made in Egypt’ initiative to use

this momentum to promote local products,”

Ashour added.

Both Ashour and Anis still agree that Egyptians

must differentiate between products of

the companies owned by local investors that

have the right to use the parent company’s

trademark, but are manufactured in Egypt by

Egyptian workers, and imported products that

are produced by companies that may support

the war against the Palestinians.

Evidently, Anis underscored potential negative

impacts of the boycott on the economy.

A foreign brand is basically a local investment

in Egypt, and collaboration with foreign companies

is a step toward manufacturing the


In-Depth

product locally instead of relying on imports.

Consequently, this collaboration provides an

opportunity for joint local and foreign investment,

maintaining the presence of a global

brand in Egyptian markets, and supporting the

Egyptian economy with mostly local capital.

He stressed that the Egyptian workforce plays

a crucial role in these investments, contributing

100% to the production process; thus, such investments

support the local economy by creating

job opportunities for Egyptians.

Anis noted that the continuous boycott may

lead to negative effects on stable economic sectors,

particularly impacting popular consumer

sectors susceptible to individual consumption

patterns. Concerns escalate when influential

sectors are affected, exacerbating economic

growth challenges.

“It is essential that the boycott does not hinder

foreign investments so as not to adversely

affect the economy as a whole by reducing the

odds of future investment in the market,” Anis

emphasized.

According to data from the Egyptian Chamber

of Commerce, franchises in Egypt constitute

about EGP 80 billion in direct investments,

and EGP 90 billion in indirect investments, with

a total of EGP 170 billion currently invested in

franchises of foreign brands investing in Egypt

and Egyptian brands.

Franchises currently employ about one and

a half million workers, and it has forward and

backward links to many other sectors, which

also provide many indirect job opportunities

for young people, offering 500,000 job opportunities

annually in recent years.

According to Ashour, voices against the boycott

have become louder as its harm to the local

economy have become evident. The agent

in Egypt does not support Israel in its war on

the Gaza Strip, and in most cases, the agent in

Israel or the parent company whose shares rose

globally in the American stock market indices

are responsible for such support.

Other experts and analysts take the viewpointthat

the current boycott campaigns may

have many negative consequences. For example

increased demand for local products could

lead to an increase in their prices; local companies

may be forced to reduce the quality of their

products to meet the increasing demand, which

may harm their reputation and disturb consumer

satisfaction. The boycott could inadvertently

foster monopolies by consolidating the market

power of large local companies, and in some

cases ancellations or delay of investment agreements,

especially by multinational companies,

have resulted. Finally, several companies have

begun to reduce employment, close branches,

or stop working altogether.

Ashour concluded that boycotts can be an

effective tool to encourage local products, but

they must be used carefully to avoid possible

negative effects.


December 2023

73

Opinion

Boycotting for Peace

An Effective Way to Bring About Change?

By Prof. Mohamed A. Elchime

Boycotts have become increasingly popular

in recent years as consumers use

their purchasing power to stand for

their values and hold corporations accountable.

This trend is evident in public opinion

polls, showing that a majority of Americans

now believe that boycotts are an effective way to

bring about change.

A number of factors have contributed to the

surging boycott calls. One factor is the rise of

social media impact, which has made it easier

for people to learn about and organize boycotts.

Another factor is the increasing awareness of

ethical and social issues such as climate change,

human rights, and labor exploitation. Finally,

the growing distrust of corporations and governments

has also played a role.

Boycotts have been particularly popular

among younger Americans. A 2022 Pew Research

Center survey found that 74% of Americans aged

18-29 said that they had never participated in a

boycott, compared to 52% of Americans aged 65

and over.

The most notable boycott movements in recent

years include the Boycott, Divestment, and

Sanctions (BDS) movement against Israel, the

boycott of Nestlé in response to the company’s

water extraction practices, and the boycott of

Amazon in response to the company’s treatment

of workers and its environmental impact. These

boycotts have all had a significant impact on

the companies involved. For example, the BDS

movement has led to billions of dollars in losses

for Israeli companies, and the boycott of Nestlé

has led to changes in the company’s water extraction

practices.

The growing trend of boycotting suggests that

consumers are becoming more aware of the

power they have to influence corporations. As a

result, corporations are more likely to be held

accountable for their actions.

With the outbreak of battles in the Gaza Strip,

sympathy arose among the peoples of the Arab

World, especially with large numbers of civilian

casualties. This led to the launch of boycotting

campaigns against specific companies and products

that are believed to be supportive of Israel

or military operations in the Gaza Strip, such as

the McDonald’s and Starbucks chains, among

others.

McDonald’s Israel accounts on X, Instagram,

and Facebook announced their support for Israeli

soldiers, providing them with 4,000 free

meals and publishing pictures of them in their

military uniform carrying McDonald’s meals. Before

access to McDonald’s Israel accounts were

restricted on X and Instagram, and follow-up was

allowed inside Israel only on Facebook, the logo

of the famous restaurant, according to television

reports.

Important popular unions and trade unions

called for the boycott of some products in Egypt

on the grounds of “supporting Palestinians in

the Gaza war.” They used social media to spread

the word about local alternatives for the products

on the boycott list.

Experts had different viewpoints regarding

the effects of that path, with some warning of its

“impact on national investments and local workers,”

and acknowledged that it was “a kind of

objection” against Western support for Tel Aviv.

On Wednesday, the Egyptian Bar Association

called on Egyptians and Arabs to boycott countries

that support Israel. The Council of Trade

Unions had recommended this boycott at its

previous meeting, citing Israel’s targeting of Palestinian

children and its efforts to cleanse homes

in Gaza. The unions referred to the countries

that support Israel, but did not name any specific

products, whether imported or manufactured

in Egypt.

The unions described the boycott as a form of

protest to send a message to the Western world

because they believe that what is happening in

Gaza is a crime against humanity. The union has

also shed light on several social media pages that

it says are “affiliated with strengthening Israel’s

power,” including pages called “Bahiya” and

“Raa.”

It is worth noting that boycott campaigns have

been tried in the past without success. Some experts

have argued that this weapon is only effec-


Opinion

Boycott

tive if Arabs or Egyptians are the main importers

of a particular commodity from a certain country,

and if they all agree to participate in the

boycott. Launching a general boycott campaign

for all goods could harm the local Arab market,

as well as impact employment and lead to the

loss of major investments. The matter must be

carefully considered, and studies should be conducted

to prove that boycotting these companies

or products will be truly effective.

On the other hand, some experts say that the

boycott is an important and effective weapon,

and that there is no need to fear for Egyptian

workers or the Egyptian economy, given that

most of the goods and products that support Israel

have local alternatives in the Egyptian market.

However, many citizens are confused about

how to respond to such calls, as they are not sure

of their impact on both the targeted companies

and the local economy.


December 2023

75

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Al Arabia Cinema and Muvi Studios’ film production partnership, announces the release of Esabet Azeema

starring Esaad Younis! Bringing our beloved “Sahebat Al Saada’’ back to the BIG screen in 2024!

Al Arabia Cinema a leading MENA film producer and distributor,

and Muvi Studios, the production arm of Saudi Cinema chain giant

Muvi Cinemas – announces the release of “Esabet Azeema” starring

Esaad Younis to be released in cinemas in January 2024.

Esaad Younis returns to the big screen with a new comedy

and action filled film titled “Esabet Azeema”, written by Hajar Al-

Abiary, and directed by the esteemed director, Wael Ihsan. The

movie will be released in early January of 2024. Aside from Esaad

Younis, this movie marks the teaming up of Mohamed Mahmoud,

Karim Afifi, Rana Raies, Mustafa Enba, Farrah El-Zahed and the

up and coming child actress, Lucienda Soliman. In addition to the

great cast, guest stars include: Mohammad Tharwat, Arfa Abdel

Rasoul, Ibrahim Al-Samman, and Ahmed Azmy. The movie is filled

with hilarious comedy, plot twists, eye-catching action, and more

for the audience to enjoy!

Furthermore, the partnership is excited to announce the production

of Ahmed Mekky’s new film, which is scheduled to be

released in 2024. These 2 films come as part of the strategic partnership

between Al Arabia Cinema and Muvi Studios to produce

and distribute films in the Middle East, with the first film produced

within this partnership, Etneen Lil Egaar, having been released in

January of 2023.

This partnership was structured early in 2022 between Omar

Alkhawaja, Board Member & Strategic Advisor for Al Arabia

Cinema, Sultan Al Hokair, Chairman of Muvi Cinemas, and Adon

Quinn, CEO of Muvi Cinemas. The first production of the partnership,

Etneen Lil Egaar, was released in January 2023 and achieved

great results in the region with more than 300,000 admissions and

is now available on Netflix. This partnership brings together the expertise

of 23 years of Al Arabia Cinema in producing iconic movies

and blockbusters, with Muvi Studios’ efforts to develop Saudi and

Egyptian films catered to the KSA market and the MENA region.

Mrs. Esaad Younis- Chairperson and CEO of Al Arabia Cinema,

the famous actress and TV host said “It is my pleasure to have

joined forces with Muvi Studios the leading film production firm

in KSA. Our next film release being Esabet Azeema which I am the

lead character of, gives me lots of excitement and anticipation as it

is integrated with what moviegoers love to watch and enjoy! With

this film, Ahmed Mekky’s upcoming film, and the film slate we are

working on with our partner, Muvi Studios, we are excited to develop

a strong offering for film production in the region.”

Commenting on the partnership, Mr.Adon Quinn, – CEO of Muvi

Cinemas said, “This partnership leverages the unparalleled expertise

of Al Arabia Cinema in developing iconic films for the big

screen, with Muvi studios efforts to develop the Saudi film industry.

I look forward to the release of Esabet Azeema, starring our dear

friend Esaad Younis in January.”

Esabet Azeema is the 2nd movie co-produced by the partnership,

and we anticipate great success for this title with a new

milestone, nevertheless, many more productions are in the lineup

bringing diversified content to the big screen meeting audience

demand and award winning movies in the MENA region. Working

hard to fulfill this production pipeline as well as deliver the films

on time is Ahmad Sobeih, Managing Director of Al Arabia Cinema.

Fawry cooperates with POS Mission to enhance electronic restaurant management solutions

“Fawry”, the leading company in the field of banking technology and

electronic payments, announced its cooperation with “POS Mission”,

a company that is a pioneer in developing business

management software and enterprise resource planning

solutions in the food and beverage industry.

To launch a 360-solution for electronic restaurant

management based on Fawry’s point-of-sale (POS)

machines to provide support and assistance to entrepreneurs,

and help them succeed and assist cafes

and restaurant owners in handling their work effectively.

“Fawry” and “POS Mission” will intensify efforts

to integrate their respective integrated solutions to

enhance the systems of restaurants and cafes to contribute

to simplifying business operations, enhancing

their efficiency, and improving their customers’ experience

in a better way. Besides, this agreement will

contribute to greater prevention of credit card fraud

based on a high level of security.

As the first choice in the electronic payments market,

“Fawry” seeks to improve the citizens’ quality of life and services

and facilitate all financial transactions within the framework of its

commitment to the Egyptian market by contributing to spreading the

culture of digital transformation and digitization and providing multiple

electronic services to various sectors.

Mohamed Kamel, Head of Acceptance and Business

Development for ‘Fawry’, said: “We are very

pleased with our partnership with POS Mission, as

“Fawry” is interested in establishing effective partnerships

in the food and beverage industry using

the latest innovative financial technologies to attract

more different customer segments, enhance restaurant

management systems, meet different customer

needs, and improve their experience efficiently

and effectively. These technologies contribute to the

digitization and advancement of the restaurant and

café sector, and are also in line with the state’s plan

to achieve digital transformation and Egypt’s Vision

2030”.

Dr. Ihsan Al-Hamoud, the entrepreneur, cofounder,

and CEO of POS Mission, said: “We are proud

to be the ideal partner for “Fawry”, the leading company in the field of

banking technology and financial technology”.

76 December 2023


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AUC, University Of Tübingen Offer Joint

Political Science Master’s Degree

The American University in Cairo (AUC) and Eberhard Karls Universität

Tübingen in Germany is now offering a joint Master of Arts in comparative

and Middle East politics and society (CMEPS). The program marks the

first official joint degree between AUC and another university and the first

master’s degree in political science accredited in Germany, Egypt and the

United States –– a distinct offering of its kind.

Founded more than 500 years ago, in 1477, Tübingen is one of the oldest

and most prominent universities in Germany. It is ranked among the

world’s top 100 and is known for its excellence and innovation in research

and teaching, as well as its longstanding research expertise in the Middle

East and North Africa. Likewise, AUC’s political science academic programs

leverage Cairo’s position as a key political, intellectual and cultural

hub at the heart of the region and center of the Arab world.

“Our collaboration with Tübingen spans 10 years, and this is a vote

of confidence in AUC,” said Nadine Sika ’97, ’00, associate professor of

comparative politics and director of the CMEPS program at AUC. “The

international structure allows students to be exposed not only to a wider

variety of course topics but also to different classroom dynamics and cultural

exchange.”

The CMEPS program stands out for its immersive approach to teaching

comparative political science. Students in the two-year program study at

both universities, completing one semester away from their home university

at the partner institution, which includes Arabic and German language

study.

“My time as a CMEPS scholar was an unforgettable experience that I

am very thankful for,” said Yasmina Elazazy ’16, ’21, coordinator of the Tomorrow’s

Leaders Graduate Program at AUC and a CMEPS alum. “I really

appreciate the interactive learning experiences offered through course

workshops and field trips. I attended all of them and didn’t want my exchange

semester to end.”

Echoing the same sentiment, Leonie Mühlbauer, a CMEPS alum from

the University of Tubingen, said, “The exchange semester at AUC and staying

in Cairo allowed me to make friends worldwide and practice my Arabic

daily. Classes were challenging but incredibly rewarding and worthwhile.”

Program cohorts are small, with a maximum of 20 students per year.

“This facilitates opportunities for closer exchange between students and

the many out-of-classroom learning experiences organized throughout

the program,” said Sika.

Joint classes allow for dynamic interactions between Egyptian, German

and other international students, and the University of Tuübingen’s Institute

of Political Science –– one of Germany’s top-ranked political science

institutions –– teaches some of the modules. The program highlights the

relationship between societies and states in the MENA region as well as

the dynamics of social and political transformation, focusing on comparative

politics and development with an emphasis on the politics, society,

cultures and languages of the Middle East.

AUC Libraries Signed An

Mou With Al-Turath Foundation

To Innovate Digital

Heritage Preservation

As part of their shared commitment to safeguarding

and maintaining cultural heritage, The

AUC Libraries at The American University in

Cairo (AUC) and Al-Turath Foundation, an organization

dedicated to preserving Saudi as well

as Arab and Islamic heritage,

have signed a Memorandum of Understanding

(MoU) to launch a new initiative aimed at developing

innovative digital methods for historical

preservation. The MoU was signed by HRH

Prince Sultan bin Salman bin Abdulaziz Al Saud,

founder and chairman of Al-Turath Foundation

and AUC President Ahmad Dallal.

“The AUC Library and the Al Turath Foundation

share a common vision and purpose

through the commitment to preserving and

safeguarding our rich cultural heritage,” says

Lamia Eid ’88, ’92, interim dean of AUC’s Libraries

and Learning Technologies. “We are dedicated

to the creation, production and dissemination

of knowledge, not only at the national

and regional levels but also on a global scale.”

Holding a central role in exploring heritage

preservation, the partnership will foster collaboration

in literature and translation alongside

theoretical and field research initiatives,

particularly in urban heritage and architectural

restoration.

The initiative also aims to spark community

interest, pride and investment into preserving

national identity and culture. This will be

achieved through enhancing the accessibility

of cultural heritage through digital platforms

and focusing on their documentation through

research, publication, documentary film production

and collaborative cultural events.

The impact of this partnership will be appreciated

for generations to come: “In an era

marked by rapid technological advancement,

our collaborative efforts are indispensable for

ensuring that our unique and rare collections

are safeguarded for the benefit of future generations,

particularly through innovative digital

approaches,” Eid says.


77

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Egypt Education Platform and Right to Dream Academy Forge Strategic

Partnership to Empower Young Talents

Egypt Education Platform (EEP) and Right to Dream

Academy officially signed a cooperation protocol at a signing

ceremony held in Badya, West Cairo. The partnership aims

to empower young talents on their academic and athletic

journeys. Stemming from Right to Dream’s belief in the

importance of fostering educational excellence alongside

athletic proficiency, this protocol underscores the academy’s

commitment to the national curriculum, and exemplifies the

synergy of homegrown entities contributing to the national

agenda outlined in Egypt’s 2030 vision.

EEP further cements its position as the leading educational

services provider in Egypt, showcasing its dedication to

supporting promising educational initiatives. Through the

collaboration, EEP reaffirms its mission to shape the next

generation of student-athletes through Prime National

Schools, a subsidiary of EEP.

This partnership will extend EEP’s reach by offering

academic programs for talented students at Right to Dream

Academy, as the comprehensive approach of the academy

includes elite football training, character development, and

a private school that will be managed by Prime National

Schools, providing a rich learning ecosystem that ensures

students flourish with an international mindset while

embracing their national identity. The partnership aims to

maximize the potential of young talents in academic and

athletic pursuits, as Egypt Education Platform will oversee

the academic journey of talented students, offering a

distinctive learning environment that aligns the national

curriculum with international standards to foster students’

skills, values, and arts.

Commenting on this collaboration, Mohamed Wasfy, CEO

of Right to Dream Academy, expressed that, “The Right to

Dream Academy in Egypt provides opportunities for young

talents to excel both on the academic and athletic fronts.

Collaborating with Egypt Education Platform will further

strengthen our educational arm to help us better prepare our

young talents to fulfill their goals.”

For his part, Ahmed Wahby, CEO of Egypt Education

Platform, remarked, “Joining hands with Right to Dream is

a game-changer in shaping the next generation of studentathletes

and unlocking their full potential, both on and off

the field. As an organization dedicated to making a positive

impact on the communities we serve, we are deeply honored

to play such a pivotal role in this collaboration, which directly

aligns with our commitment to corporate social responsibility

and investing in the future of Egypt’s youth.”

The Egyptian Food Bank participates in the activities of COP28 in Dubai

The Egyptian Food Bank has announced its participation in the

twenty-eighth session of the Conference of the Parties (COP28)

to the United Nations Framework Convention on Climate Change,

currently taking place in Dubai, United Arab Emirates, with the

involvement of nearly 150 countries worldwide. The participation of

the Egyptian Food Bank includes various activities within the COP28

events for the second consecutive year. The goal is to contribute

to the development of strategic climate change policies, leverage

decisions from the summit, and maximize the impact on achieving

food security, sustainability, and empowering small farmers while

exchanging expertise.

“Our participation in the COP28 for the second consecutive year in

Dubai complements our leadership role in advancing developmental

and humanitarian work, directly contributing to achieving food

security. This year’s focus is on enhancing women’s empowerment,

supporting small female farmers, by integrating them into our

supply chain, aiming to elevate the development of agriculture

and livelihoods,” said Mohsen Sarhan, CEO of the Egyptian Food

Bank. “The collaboration with the United Nations Development

Programme (UNDP) focuses on empowering small female farmers,

shedding light on the major challenges facing the agricultural sector

in Egypt as the first sector affected by climate change. Additionally,

it involves presenting key policies, programs, financing plans, and

local initiatives by the Egyptian government, international donor

agencies, and non-governmental organizations to aid in adaptation

and mitigation of the impacts of climate change.”

During their participation in COP28, the Egyptian Food Bank

signed a memorandum of understanding (MoU) with the UNDP

with Alessandro Fracassetti, UNDP Resident Representative. This

collaboration aims to provide Egyptian Food Bank with modern

technological methods benefiting its areas and programs.

78 December 2023


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BMW fleet to transport VIP visitors and celebrities

Global Auto, the official BMW importer in Egypt, is proud to announce

that BMW is the Official Automotive Partner for the 6th

edition of the highly anticipated El Gouna Film Festival (GFF). Taking

place from October 14th to December 21st, the festival promises a

week filled with cinematic perfection and artistic grandeur. BMW will

bring an unparalleled touch of luxury and innovation to this festival.

BMW is providing a fleet of luxurious vehicles to facilitate the

transportation of celebrities and VIP guests to the red carpet and

all-around El Gouna during the festival. This premium service reflects

BMW dedication to improving the overall festival experience

for all the attendees.

In addition to the VIP transportation, the 6th edition of the annual

festival provides the perfect setting for BMW to showcase

its unwavering commitment to art, culture, and technological

innovation. As part of the GFF experience, BMW is providing the

festival attendees with an exclusive opportunity to experience two

of its finest vehicles—the all-electric BMW i7 xDrive60 and the new

BMW X6 M60i.

Complementing the vibrant atmosphere of El Gouna Film Festival,

the new BMW i7 is on display at a dedicated BMW booth,

thereby allowing the attendees to explore the luxurious appeal and

innovative excellence of the world’s first fully-electric luxury sedan.

Embodying BMW commitment to a more sustainable future, the

new i7 xDrive60 features two electric motors that produce 544 hp

and 745 Nm of torque. The fully-electric model display a 101.7 kWh

battery with an estimated range of 625 km. The all-wheel-drive

electric sedan is able to accelerate from zero to 100 km/h in 4.7

seconds.

The second showcase located at Abu Tig Marina, where the

spotlight will shine on the awe-inspiring the new X6 M60i. which

is proudly assembled in BMW plant in 6th of October City in Egypt.

Combining exquisite craftsmanship with dynamic driving experience,

the high-performance sport features a 4.4-liter V8 engine,

producing 530 hp and 750 Nm of torque. The new X6 M60i is able

to accelerate from zero to 100 km/h in just 4.3 seconds.

Mohamed Kandeel, CEO of Global Auto Group, said: “We are

thrilled to have BMW as part of the 6th edition of the GFF. Our

partnership with this prestigious festival truly reflects our longstanding

commitment in supporting arts and culture, and it deeply

resonates with the values of innovation, performance, and luxury

that define BMW brand. This is a great opportunity to showcase

our luxury fleet and ensure that celebrities and VIP attendees are

chauffeured in the utmost comfort.”

This sponsorship follows BMW long-standing tradition of supporting

cultural events and festivals worldwide. BMW has also

been a proud partner of the 76th edition of Cannes Film Festival,

where its dedication to luxury and culture was similarly evident on

the world’s most exclusive red carpets.

A Global Marriott International appreciation for Hany Zaki

front office manager at Sheraton Cairo Hotel

The bustling lobby of the Sheraton Cairo Hotel and

Casino hummed with activity. Guests checked in,

chattering excitedly about their upcoming adventures.

Amidst the controlled chaos stood Hany Zaki, Front

Office Manager at Sheraton Cairo Hotel and Casino, a

confident figure radiating calmness and efficiency. His

journey to this position was a testament to his dedication,

resilience, and unwavering commitment to excellence

in hospitality. Over 27 years Mr. Hany showing

his hard work and loyalty to Marriott International.

In 2023, Zaki received a letter of recognition from

Marriott International’s top management in the EMEA

regional office as well as the global office. He was

honored to receive this appreciation letter from Mr.

Anthony Capuano, President and Chief Executive Officer,

Mr. Satya Anand, the President, Europe, Middle

East & Africa of Marriott International, Mr. Sandeep

Walia, Chief Operating Officer - Middle East at Marriott

International, and Mr. Ahmed Hozaien Area Vice-President

Marriott International. We asked Mr. Hani Zaki

about how he feels receiving the recognition letter. He

stated, “I felt immense gratitude and there was also a

surge of pride that swept through me. Knowing that

my commitment to excellence resonated all the way

up to the regional office was incredibly validating. It

reinforced my belief that I am on the right track and

instilled a renewed sense of purpose and motivation.”

Hany Zaki’s story is an inspiring example of hard

work, perseverance, and a genuine passion for service.

He embodies the qualities of a true hospitality

leader, leaving a lasting impact on his colleagues,

guests, and the industry as a whole. He continues to

inspire his team with his dedication, leadership, and

unwavering commitment to guest satisfaction


79

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Vodafone Egypt and Vodafone Egypt Foundation Ink Two MOUs with MCIT to Elevate

Youth Digital Capabilities and Knowledge Through Egypt’s Digital Generations Initiatives

In light of the company’s efforts to enhance digital transformation

and development in Egypt, Vodafone Egypt and Vodafone

Egypt Foundation announced the signing of two Memorandum of

Understanding (MOUs) with the Ministry of Communication and

Information Technology. These agreements outline joint efforts to

implement initiatives fostering the development of students’ digital

capabilities and skills, with a primary objective of cultivating specialized

expertise within the Information and Communication Technology

(ICT) sector. This collaboration solidifies Vodafone Egypt’s

commitment to enhancing the quality of education and expanding

the breadth of services offered to students.

The signing ceremony was witnessed by H.E. Dr. Amr Talaat,

Minister of Communications and Information Technology. The

first MOU was signed by Ayman Essam, External Affairs and Legal

Director at Vodafone Egypt with Eng. Raafat Hindi, Deputy Minister

of Communications and Information Technology for Infrastructure

Affairs for the Digital Egypt Builders Initiative (DEBI) aiming to refine

graduates’ skills in multiple specializations.

Under this cooperation, the cybersecurity team at Vodafone

Egypt will supervise the participants in the (DEBI) program, facilitating

the adoption of graduation project ideas from students at

public Egyptian universities. The team will evaluate these projects

and provide sponsorship to ensure their alignment with the current

and future requirements of the labor market. Additionally,

Vodafone Egypt will conduct specialized technological awareness

seminars covering key areas such as 5G networks, Artificial Intelligence,

Data Science, Cybersecurity, Embedded Systems, Business

Analysis, Digital Arts, Software Development, and Electronics

Design.

Furthermore, Vodafone will offer practical training opportunities

and firsthand experiences, along with accredited certifications

of completion granted to students. This comes as a part of the

company’s eagerness to empower the new generation, enabling

them to emerge as influential leaders in the field of ICT and meet

the demands of the labor market; aiming to support developing

specialized cadres in the sector that can keep up with the pace of

technological changes and therefore increase students’ employment

opportunities within the company.

The second MOU was signed by Eng. Mohamed Henna, Chairman

of the Board of Trustees of Vodafone Egypt Foundation

with Eng. Raafat Hindi, Deputy Minister of Communications and

Information Technology for Infrastructure Affairs to extend the

partnership in the Digital Egypt Cubs Initiative (DECI), in addition to

participating in launching new initiatives. Among them is the Digital

Egypt Marvels Initiative (DEMI), which aims to qualify and build

the technological skills of school fourth-grade to sixth-grade students,

and the Digital Egypt Pioneers Initiative (DEPI), which aims

to develop technological leadership in modern technologies among

university students and graduates from all specializations. The

initiatives also include the Digital Egypt Builders Initiative (DEBI),

which aims to develop the skills of outstanding graduates in multiple

specializations and enhance communication and integration

of initiatives with the needs of the local community to ensure the

success and sustainability of these projects.

In addition, Vodafone Egypt Foundation is scheduled to provide

the students participating in any of these initiatives with free subscription

to the foundation’s “Ta3limy” platform which provides

access to content and live digital lectures lead by experts in digital,

soft and language skills. In addition to building and developing

student’s skills through the free digital solution, the foundation

provides field training and organized activities and competitions,

whether cultural, educational or social, to further equip students

with future-ready skills.

Ayman Essam, External Affairs and Legal Director at Vodafone

Egypt, conveyed his enthusiasm for the company’s engagement

in Egypt’s Digital Generations Initiatives “This commitment aligns

with Vodafone Egypt’s overarching strategy to support digital education

and contributes to Egypt’s digital transformation. Our key

objective is to enhance the quality of education, broaden the range

of services available to students, and afford opportunities for youth

to cultivate their skills, ultimately fostering a generation wellequipped

to excel in the era of modern technology.”

In this regard, Eng. Mohamed Henna, Chairman of the Board

of Trustees of the Vodafone Egypt Foundation, said:” We take immense

pride in our collaboration with the Ministry of Communications

and Information Technology, underscoring our firm belief in

the pivotal role that youth play in fostering innovation. Our commitment

extends to unprecedented efforts dedicated to supporting

and empowering them with essential digital skills, ensuring

they are well-equipped to match the rapid pace of technological

advancement,”

“Anticipating fruitful outcomes from this partnership, we aspire

to forge enduring and impactful alliances with international corporations

and specialized universities. Through these endeavors,

we aim to catalyze the success journey of the young individuals

engaged in these initiatives, enabling them to realize their professional

aspirations in the dynamic realm of technology.” Henna

added.

The “Digital Egypt Builders Initiative (DEBI)”, a complimentary

grant program, was launched by the Ministry of Communications

and Information Technology in September 2020 during the inauguration

of various educational institutions attended by the President.

The initiative is strategically designed to cultivate skilled professionals

in the realm of information and communications technology,

with a specific focus on nurturing the creative capabilities of

Egyptian youth.

80 December 2023


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Enjoy a mouth-watering

Brunch at The Golf Terrace

Restaurant

After long busy weekdays what could be more

enjoyable than a well-deserved luscious brunch

with live band music! Expect an elevated experience

at The Golf Terrace Restaurant by Kempinski

Nile Hotel with the stunning views of the golf

course at Madinaty Golf club. The Golf Terrace

Restaurant is a rare gem for delectable gourmets.

It guarantees you a remarkable delightful experience.

Get swept away into a world of modern flavors

specially crafted by Kempinski Nile Hotel culinary

team who promise you a fresh take of the best international

cuisine. Immerse yourself in a dynamic

dining experience where an open air terrace overlooking

the golf course, live band entertainment

and authentic flavors converge.

Live it up at Golf Terrace Restaurant brunch

every Friday while enjoying a live performance,

dine on an Egyptian menu for breakfast, or enjoy

flavor-packed dishes at lunch and dinner. With

freshly baked bread, crafted barista coffee, and a

selection of international cuisine, Golf Terrace Restaurant

is a premium destinations where guests

can gather, socialize and enjoy gourmet fare in a

casual and comfortable setting. It features panoramic

views of the golf course of Madinaty Golf

Club.

Relax and unwind from a vibrant city pace in

an informal atmosphere at The Golf Terrace Restaurant

by Kempinski Nile Hotel at Madinaty Golf

Club where the all-day dining restaurant prepares

an array of international and local dishes, offering

a buffet-style brunch every Friday, and a la carte

menu for lunch and dinner.

Soak up some rays and enjoy a serene dining

experience with an astonishing view at Golf Terrace

Restaurant by Kempinski Nile Hotel. Let the

good times roll at Golf Terrace Restaurant; your to

go for destination for luscious food and live entertainment.

For reservations please call +20 1101134516

& follow @golfterracerestaurant on Instagram to

stay updated with their offers.

Paragon Developments Launches “The

Beginning of Change” Campaign to Announce

the Arabization of Its Brand

Paragon Developments has propelled its innovative campaign to articulate

its new strategy, with a key emphasis on anchoring the Arab identity

and embracing cultural resonance. This involves a rebranding fortitude,

including an alteration in the visual representation and language of the company’s

brand. This move serves as the company’s initial step in a broader

localization initiative, aligning with the massive localization drift pursued by

many brands.

As part of this initiative, Paragon Developments launched an extensive

campaign featuring the slogan “The Beginning of Change”, which resembles

a strategic interchange that targets to blend modern technology and contemporary

advertising methods with Arab heritage and Egyptian national

identity. The initiative stresses that Paragon is a 100% Egyptian company

adhering to global standards, consistently supporting various sectors within

the Egyptian community, it also accentuates the company’s commitment to

preserving the Egyptian identity and promoting local industry and products

across all scales.

Eng. Bedir Rizk, CEO of Paragon Developments, affirmed that Paragon is

not merely a company but rather a movement that is devoted to transforming

and advancing the concept of work environments to improve our society.

“The company ambitions to connect with the Egyptian community and its

Arab nature by rebranding in the Arabic language. This initiative is part of

Paragon’s strategies for the forthcoming period, focusing on expanding its

business scope in a new phase for the company, pointing to growth in the

development of administrative buildings and workspaces. Building on its

significant past success, Paragon’s philosophy is primarily strong-minded

to undertake more innovative and sustainable projects that align with the

Paragon brand”, stated Rizk.

“We spare no effort to utilize this change to highlight the essence of the

Egyptian identity and authentically convey the cultural fabric of our society.

Paragon aims to build strong relationships with the community by

combining modern design, technology, and sustainability while preserving

the Egyptian character. We also aim to incorporate the company’s vision,

which doesn’t only purpose to build modern communities but also strives to

convey a tangible transformation in the perception of the environment surrounding

those communities and contribute to refining their quality of life.

Our core focus is on sustainability as a methodology to provide productive

and efficient workspaces, in parallel to our unwavering efforts to change

conventional culture and express the company’s pivotal role in society,”

stated Ziad Alaadin, Marketing Director at Paragon Developments.

Paragon Developments owns 120,000 square meters of environmentally

friendly workspaces in the New Administrative Capital. Furthermore, the

company provides flagship products and initiatives, such as the expanding

Paragon Hub on the North Coast and Paragon Pods. It actively engages in

real estate technology by partnering with startups in the construction, real

estate, and marketing sectors through ‘Proptex.’ Additionally, the company

introduced Paragon Talks, a non-profit educational platform.


81

Last Word

“I’ll be all Egyptians’ voice and defend their

dreams for Egypt.”

— President Abdel Fattah El-Sisi after

winning the 2024 presidential Elections

72 December 2023


A Legacy of Success

.COM


businesstodayegypt

btegyptmag

For PR and advertising

Sherif Anis

sherif.anis@podegypt.com

For advertising inquiries

please contact

01222239700

For editorial inquiries please contact

editor@businesstodayegypt.com

Business Today Egypt | December 2023

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