The government’s long-term plan is to build 50 cities by 2050. Those metropolises would include multiple neighborhoods, gated complexes, commercial property, entertainment, offices and public spaces. The New Administrative Capital, for example, can house between 6 and 6.5 million people. It will have some of the tallest and largest office spaces and entertainment facilities in Africa, plus other amenities to make this metropolis Egypt’s flagship city. That will invariably create heavy demand for construction materials for years to come, weighing on the government’s budget. According to the General Organization for Export and Import Control, the government has been running a…
Author: Tamer Hafez
Fixing high-end electronic equipment like smartphones is becoming more prevalent as new devices become scarcer and more expensive. When the latest iPhone in Egypt (iPhone 13) launched in September 2021, it cost EGP 18,500 ($753). However, inflation, devaluation of the pound versus the dollar, and low supply mean it now starts at EGP 27,900. Meanwhile, independent vendors on e-commerce platforms sell this year’s iPhone 14 for EGP 30,500 to EGP 47,000 and more. Samsung and other Android phones follow the same pattern, with top-end devices going for 50% more this year alone. That sharp rise in prices is causing sales…
Having produced cars locally for over 60 years, Egypt is a pioneer in Africa. It started with an ambitious vision to have a 100% Egyptian car brand: the Ramses. Its production run lasted from 1960 until its demise in 1972. The focus then shifted to building cars with a local brand name (Nasr, Dogan, and Polonez) that are licensed and fully supported by FIAT and, later, its offshoots. Those cars died off in the 1990s and early 2000s. Egypt has factories assembling vehicles for 17 international carmakers under their brand names. Nearly 23,754 units were built by the end of…
No matter how much you love your favorite familiar smartphone or look down on those who constantly upgrade to the latest model, there will come a time when new equipment is in order. Proper disposal of unneeded devices is vital for the environment and economy at large, according to All Heart NZ, a New Zealand-based sustainability consulting firm. There are a handful of electronic waste (e-waste) recyclers in Egypt. All of them focus on finding and collecting discarded mobile phones, laptops, chargers, cameras, video games, gaming consoles, and PC monitors. The problem is that informal collectors dominate the scene and…
It is official. The IMF has approved Egypt’s request for a $3 billion Extended Fund Facility (EEF). This amount means Egypt has now taken 115.4% of its quota, making future financing requests markedly harder to secure. That amount also means that Egypt’s foreign-currency-denominated debt levels have reached unprecedented highs (32.6% of GDP in the third quarter of 2022). That adds pressure on the government to find ways to increase FDI, long-term portfolio investments, and exports significantly. They must also trim costs, reduce imports by encouraging more local companies to produce alternatives to those goods, and reduce consumption to pay back…
The US Federal Reserve (Fed) announced on Wednesday raising interest rates by 50 basis points after four consecutive three-quarter point hikes, signaling additional increases next year amid a slowing economy and unprecedented inflation. Interest rates in the US are now 4.5%, still lower than 2017 rates when it crossed 5.25%. Based on the Fed’s projections, interest rates would reach between 5% and 5.25% by the end of 2023. In the announcement, officials said proceeding increases “will be appropriate” to help bring inflation down to the Fed’s target level. Those forecasts are higher than September’s projections, which estimated rates between 4.5%…
For the past 20 years, the EU has relied on the euro to be worth $1 or more and fuel GDP growth. While that had pros and cons for member nations, EU economic performance was reliable overall. Trading Economics, a data curation portal, shows GDP annual growth rates of as much as 5% since the EU’s inception in 1993. It contracted in 2008 during the Global Financial Crisis, in 2013 when Ukraine refused to join the EU and in 2020 when the COVID-19 pandemic hit. GDP rebounded in 2021, growing 15% after shrinking 14% the previous year. Now the euro…
Nicknamed “The World’s Factory,” China is the biggest trading partner of more than 64 nations, according to the 2016 CIA World Factbook. One of them is Central Bank of Egypt data that showed China accounted for 8.8% of total trade as of March. That percentage is almost entirely due to imports from the Asian giant, which equaled 11.6% of Egypt’s imports. The Chinese yuan’s foreign exchange rate is vital in balancing Egyptian government finances. “Trade and financial linkages have significantly strengthened between China and other emerging markets, prominently over the past decade,” Phoenix Kalen, head of research at Société Générale,…
Russia is vital to Egypt’s food security. CAPMAS data shows Moscow supplied nearly 80% of Egypt’s wheat prior to the invasion of Ukraine. The country also is a significant contributor to Egyptian tourism, with the Russian Agency for Tourism estimating that 1 million tourists visited Egypt in the last four months of 2021 after Russia lifted the six-year ban on charter flights.CAPMAS data shows that 8 million foreign tourists came to Egypt in 2021. That makes the Russian ruble (RUB) foreign exchange rate vital to Egypt’s national budget, inflation rates, and monetary and fiscal policies. Since the start of the…
For many, the dollar is the de facto global currency. Based on IMF data, it accounted for 59% of central banks’ foreign exchange reserves in the second quarter of 2022. The euro, used by 27 nations, accounts for 19.8% and the Japanese yen 5.9%. The dollar’s dominant position means almost all governments are affected by changes in its exchange rate and overnight interbank interest rates. “The Federal Reserve [Fed] is … at the center of a system of central banks that are under pressure to follow its decisions, whether locally appropriate or not,” John Kemp, a Reuters market analyst, said…