Pandemic drives down Tunisia’s tourism revenue by 65%

Pandemic drives down Tunisia’s tourism revenue by 65%
Russian tourists are seen shopping at the old medina in Sousse, Tunisia, June 22, 2018. Picture taken June 22, 2018. (Reuters)
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Updated 07 January 2021

Pandemic drives down Tunisia’s tourism revenue by 65%

Pandemic drives down Tunisia’s tourism revenue by 65%
  • In 2020, the number of visitors fell by 78%, as western tourists deserted Tunisia’s hotels and resorts
  • The contraction of Tunisia’s economy is expected to be at least 7% in 2020

TUNIS: Tunisia’s tourism revenue plunged by 65% in 2020 compared to 2019, to around $746 million, official figures showed on Thursday, as the impact of the COVID-19 pandemic dealt a severe blow to the country’s economy.
In 2020, the number of visitors fell by 78%, as western tourists deserted Tunisia’s hotels and resorts, a government official told Reuters. Tunisia had received a record 9.5 million visitors in 2019.
The contraction of Tunisia’s economy is expected to be at least 7% in 2020 as a result of the loss of revenue from tourism, which accounts for about 8% of GDP and is a major source of foreign currency.
Central bank data showed that tourism revenues fell to 2 billion Tunisian dinars ($746 million), compared to 5.6 billion dinars the previous year.
Travel restrictions and the spread of the novel coronavirus around the world led most hotels in Tunisia to close and tens of thousands in the tourism sector lost their jobs, which prompted the government to announce facilities in loans to hotel owners. ($1 = 2.6811 Tunisian dinars)


Saudi insurance sector eyes more mergers and acquisitions

Saudi insurance sector eyes more mergers and acquisitions
Updated 17 April 2021

Saudi insurance sector eyes more mergers and acquisitions

Saudi insurance sector eyes more mergers and acquisitions
  • Government assistance shielded sector from the coronavirus disease (COVID-19) pandemic’s impact

RIYADH: The Kingdom’s insurance sector closed the financial year 2020 on a high note with the aggregate net profit of local insurance firms, except for the Saudi Indian Company for Cooperative Insurance, rising to SR1.443 billion ($0.38 billion) in Q4, an increase of 47 percent year-on-year, according to data compiled by the financial news service Argaam.

There were 13 insurers recording higher profits in 2020, led by the Mediterranean and Gulf Insurance and Reinsurance Co., which surged 1,081 percent, the Saudi Arabian Cooperative Insurance Co., which increased 545 percent, and the Gulf General Cooperative Insurance Co. which saw net income up 397 percent.

The sector finished out the tough year on a high note mainly thanks to government support. 

KPMG said while the pandemic triggered disruption for most industries, the Saudi government intervened and provided relief by opting to pay for the treatment of all COVID-19 patients. 

The audit, tax and advisory services firm found that the cumulative net profit after zakat and tax touched a high of SR1.32 billion in the first nine months of 2020, an increase of 96.1 percent year-on-year. Argaam’s figures also found that the total gross written premiums (GWPs) of Saudi-listed insurance companies increased by 3 percent year-on-year to SR38.28 billion in 2020. 

There were 18 insurance firms out of 29 reporting an increase in GWPs last year, led by Aljazira Takaful Taawuni Co., which was up 80 percent year-on-year. 

Saudi insurers reported SR23.5 billion in net claims last year, down from SR24.7 billion a year previously. Net incurred claims accounted for around 76 percent of GWPs in 2020, the data showed.

Analysts said the Saudi insurance market was set to witness consolidation with mergers and acquisitions (M&A) gaining pace during 2021.  The Saudi Central Bank (SAMA) in January reiterated the need for insurance companies to look at M&A deals since the sector was a key driver of the Kingdom’s economy and a pillar of the Financial Sector Development Program, one of 12 executive programs launched by the Council of Economic and Development Affairs to achieve the objectives of Saudi Vision 2030.

HIGHLIGHTS

• The Kingdom’s insurance sector closed the financial year 2020 on a high note with the aggregate net profit of local insurance firms, except for the Saudi Indian Company for Cooperative Insurance, rising to SR1.443 billion($0.38 billion) in Q4.

• The total gross written premiums (GWPs) of Saudi-listed insurance companies increased by 3 percent year-on-year to SR38.28 billion in 2020.

• Saudi insurers reported SR23.5 billion in net claims last year, down from SR24.7 billion a year previously.

The recent mergers between insurance firms were positive indications that the central bank’s plans for the sector were moving in the right direction, said SAMA Gov. Fahad Al-Mubarak during the honoring of Aljazira Takaful Taawuni Co. and Solidarity Saudi Takaful Co. following their merger.

SAMA will continue to encourage insurance companies to look at potential mergers in order to achieve the goals set out as part of the Vision 2030 programs, Al-Mubarak said. 

The sector recently witnessed a number of agreements and mergers, including between Walaa Cooperative Insurance Co. and Metlife AIG ANB Cooperative Insurance Co., and between Al-Ahlia Insurance and Gulf Union National.

Talal Bahafi is chief market officer at Marsh Saudi Arabia, which is part of the global financial services group Marsh & McLennan. He said the Kingdom’s insurance sector was likely to see more consolidation in 2021, driven by insurers looking to streamline costs, boost efficiency and increase optimization.

“The last 12 months have brought about significant changes to the insurance market in the GCC (Gulf Cooperation Council), in terms of capacity and pricing,” Bahafi told Arab News. “We expect these conditions to persist throughout 2021 and for organizations to continue to face more challenging trading conditions. It is important for organizations to adapt to these shifts by renewing their focus on building resiliency and rethinking their risk management strategies. This will, in turn, ensure they have an insurance program in place which matches the risk appetite of their business.” The Clyde & Co Insurance Growth Report 2021 said the Middle East insurance sector would see increased M&A activity this year.

According to the law firm’s report, M&A insurance deals in the Middle East and Africa rose by 166.7 percent in 2020, the biggest growth across all regions.

S&P Global Ratings, in its latest report on the GCC insurance sector, said it expected to see growth in Saudi Arabia due to regulatory initiatives. 

In the GCC it expected its ratings on insurers to remain broadly stable in 2021 owing to robust capital buffers, despite ongoing economic uncertainty relating to the pandemic.

Meanwhile, the rate of Saudization in the insurance sector has reached 75 percent compared to 35 to 40 percent in the past, according to Abdullah Al-Tuwaijri, SAMA’s director general of insurance supervision.

Al-Tuwaijri, who made the remarks during a session of the Economic Growth Forum, added that the high Saudization rate indicated the sector was capable of creating more job opportunities for citizens.


Brazilian renewable energy sector offers opportunities for Saudis

Brazilian renewable energy sector offers opportunities for Saudis
Updated 17 April 2021

Brazilian renewable energy sector offers opportunities for Saudis

Brazilian renewable energy sector offers opportunities for Saudis
  • The Kingdom imports several food products from Brazil, mostly in the form of meat and coffee

RIYADH: A new report by the Arab-Brazilian Chamber of Commerce (ABCC) revealed several opportunities for Saudi investors looking to break into the Brazilian market by investing in key sectors.

The report identified four core industries that the Kingdom had previously invested in: Rubber and plastic manufacturing, food storage and other transport activities, chemical and machinery manufacturing, and vehicle manufacturing.

Rachel Andalaft, CEO of research and consultancy firm Mangifera Analytics, told Arab News that Saudi Arabia has traditionally seen Brazil as a “possible gateway to the rest of Latin America.”

“Brazil’s increased opportunities have opened the door for Saudi Arabians to invest in diverse Brazilian markets — not only in ongoing food markets but also oil and gas,” she said.

The Kingdom imports several food products from Brazil, mostly in the form of meat and coffee. Saudi Arabia was the premier Arab importer of poultry from Brazil in January, with 35,800 tons of poultry shipped to the Kingdom.

Also, in February of this year, the Saudi Agricultural and Livestock Investment Co., a joint-stock company owned by the sovereign wealth fund the Public Investment Fund (PIF), entered into an agreement with Brazil’s Minerva Foods to acquire assets in Australia and set up a joint venture for the processing and export of beef and lamb produce.

Additionally, Andalaft stated that the PIF would be putting funds forward to be used in Ferrograo, a crucial railroad for Brazil. “This will go from Mato Grosso to Pará, spanning about 1,000 kilometers at an estimated cost of over $3 billion,” she said.

According to Andalaft, trade relations show great potential for growth given the productive complementarities between the two countries, particularly in Brazil’s emergent renewable energy market.

“Typical market opportunities are earmarked for double-digit returns, reaching beyond an 18-percent return on investment for those investors able to create smart financing structures,” she said of the opportunities in the wind and solar energy sector in Brazil.

Arab-Brazilian trade relations are expected to retain a strong growth trajectory in the future, particularly after the ABCC announced plans in February to set up an international office in the Saudi capital of Riyadh to capitalize on trade between the two countries.


Saudi Aramco part of $50 million funding for US software firm

Saudi Aramco part of $50 million funding for US software firm
Updated 17 April 2021

Saudi Aramco part of $50 million funding for US software firm

Saudi Aramco part of $50 million funding for US software firm
  • The extra $50 million brings Seeq’s total funding since its launch in 2013 to around $115 million

RIYADH: Saudi Aramco’s investment arm was among a group of investors who awarded SR187.5 million ($50 million) to a Seattle-based manufacturing and technology software company.

Seeq Corp. said it had raised the new funds as part of a Series C funding round as the group of investors backing the financing were Altira Group, Chevron Technology Ventures, Cisco Investments, Second Avenue Partners and Saudi Aramco Energy Ventures (SAEV).

The extra $50 million brings Seeq’s total funding since its launch in 2013 to around $115 million. While the breakdown of figures was not given, Seeq did say that SAEV was already an existing investor from previous funding rounds. Seeq enables engineers and scientists to rapidly analyze, predict, collaborate, and share insights to improve production and business outcomes for its products. It operates across many sectors, including oil and gas, pharmaceutical, chemical, energy and mining.

The Seattle-based company aims to use the new funds to develop its sales and marketing resources and expand its presence into international markets.

“By leveraging big data, machine learning and computer science innovations, Seeq is enabling a new generation of software-led insights,” Steve Sliwa, the CEO and co-founder of Seeq, said in a press statement.

According to its website, SAEV is described as the strategic technology venturing program of Saudi Aramco. Its mission is to invest globally into startup and high-growth companies with technologies of strategic importance to Aramco, to accelerate its development and its deployment in the company.


EU poised to unveil green investment list

EU poised to unveil green investment list
Updated 17 April 2021

EU poised to unveil green investment list

EU poised to unveil green investment list
  • Bloc aims to become carbon neutral by 2050 and mitigate climate change

BRUSSELS: The European Commission will next week present the first part of a “green taxonomy” list of energy sources and technology to be labeled as sustainable investments, but a question mark hangs over the inclusion of natural gas.

The classification system, to be published on Wednesday, is mandated under a 2019 agreement between member states and the European Parliament meant to define durable economic activities and green finance.

It seeks to define what the EU would deem as sustainable as it moves toward a goal of Europe becoming carbon neutral by 2050, with criteria focusing on mitigating climate change or preparing for it.

A second commission proposal is to follow later this year covering four other subjects — protection of water and marine resources, the circular economy, preventing pollution and biodiversity — all part of the EU’s “Green Deal” to reach that ambition.

For an investment to be considered “green” it has to meet one of these objectives without hurting any of the others.

The proposal is to become a “delegated act,” meaning it becomes law unless member states or the European Parliament reject it.

But a leak of the commission’s taxonomy list last month raised an outcry from NGOs, experts and MEPs, in particular over the inclusion of gas as a partially sustainable energy source.

Nine experts the commission consulted threatened to break off cooperation over the perceived “greenwashing,” according to a letter sent to the commission and seen by AFP.

The commission plan, according to the leak, is to have gas-fueled power stations labeled as “green” as transitional facilities up to 2025 where they replace ones using coal. One of the experts signing the letter, Sebastien Godinot, economist at the environmental protection NGO WWF, said that would give a “blank check” to gas operators and risk a long-term dependence on fossil fuels.

“This proposal could potentially create a direct incentive to build even more gas co-generation plants than already planned,” Godinot warned.

A Green MEP from the Netherlands, Bas Eickhout said: “A gas-fired power plant built now is there to stay for 40 years. So brings you way over the 2050 deadline.”

As a result, “we are going to object” to the commission proposal, based on the version leaked in March, Eickhout said.

Several sources said that the governments of Austria, Denmark, Ireland, Luxembourg and Spain had written a joint letter to the commission to voice their objection to including gas in the taxonomy.

Godinot noted that, while natural gas releases less carbon dioxide than coal, it also emits methane, considered a worse greenhouse emission.

Other points of discord are the commission’s approach to forestries and logging, seen by some as not rigorous enough, and it automatically classifying bioenergy as durable even when the biomass it uses comes from dedicated farmland.

A French news website, Contexte, said on Thursday that the commission has been forced to revise its document and could revert to an ordinary legislative process that would be much longer.

The commission did not confirm that. An EU source said the text it is to present is “still in development” and stressed how technical it was.

“Right now, we’re talking about a general approach to gas. Further analyses are needed,” the source said.


Egypt, Sudan airlines sign MoU to boost ties

Egypt, Sudan airlines sign MoU to boost ties
Updated 17 April 2021

Egypt, Sudan airlines sign MoU to boost ties

Egypt, Sudan airlines sign MoU to boost ties
  • The partnership aims to transfer Egyptian expertise in the aviation sector to Sudan

CAIRO: Egypt’s national carrier EgyptAir has launched a strategic partnership with Sudan Airways to strengthen aviation ties between the two countries.

Egyptian Civil Aviation Minister Mohamed Manar and Khaled Al-Sheikh, deputy Sudanese ambassador to Egypt, attended the memorandum of understanding (MoU) signing ceremony.

Amr Abu El-Enein, EgyptAir chairman and CEO, and Sudan Airways Director General Yasir Timo signed the MoU.

The Egyptian minister highlighted the importance of the strategic partnership between the airlines and their role in enhancing trade exchange between the two countries. He said the MoU is part of Cairo’s strategy to strengthen bilateral ties in a range of fields, including aviation.The partnership aims to transfer Egyptian expertise in the aviation sector to Sudan.

Manar said the MoU includes training of employees with the Sudanese flag carrier, and helping the country modernize its aircraft fleet by managing network planning, developing maintenance operations, and providing advisory services in quality control and technical approvals. Under the agreement, Egyptian experts will train Sudanese officials in aviation security, ground services and other technical aspects.

The MoU also seeks to increase air traffic between the two countries, leading to increased economic opportunities for both.

A joint working group will have regular meetings to follow up on projects and contracts.

Timo also expressed his happiness at signing the MoU with EgyptAir, due to its expertise, human cadres and technical capabilities.