Egypt’s central bank governor resigns as economic woes mount

Egypt’s central bank governor resigns as economic woes mount
Egyptian Central Bank Governor Tarek Amer resigned as the country has struggled to address its financial woes. (AP/File)
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Updated 17 August 2022

Egypt’s central bank governor resigns as economic woes mount

Egypt’s central bank governor resigns as economic woes mount
  • President Abdel Fattah el-Sissi accepted the resignation of Tarek Amer and named him a presidential adviser
  • The currency is under pressure, sliding in value to about 19 Egyptian pounds to the US dollar

CAIRO: Egypt’s central bank governor resigned Wednesday as the Middle East’s most populous nation struggles to curb inflation triggered by Russia’s war in Ukraine, high oil prices and a drop in tourism.
President Abdel Fattah El-Sisi accepted the resignation of Tarek Amer and named him a presidential adviser, the Egyptian leader’s office said in a statement. The brief statement offered no explanation for Amer’s resignation.
No replacement was immediately named for Amer, who had been appointed governor of the central bank in November 2015. He has been criticized for his handling of Egypt’s financial challenges.
The currency is under pressure, sliding in value to about 19 Egyptian pounds to the US dollar. That followed a central bank decision allowing the currency to depreciate by around 16 percent in March to try to stem a growing trade deficit.
“It seems there’s a lot of tensions within policymaking circles, and I think that’s ultimately what led to Mr. Amer’s resignation,” said Jason Tuvey, a senior emerging markets economist at Capital Economics.
Tuvey said there are officials that oppose devaluing the pound and instead support measures like rationing gas consumption by curbing electricity usage, which could in turn harm business activity. Amer had traditionally been seen as in the camp that supported the pound’s depreciation as a way to secure a loan from the International Monetary Fund.
The London-based Capital Economics research firm predicts that Egypt’s currency will continue to slide, reaching 25 pounds to the dollar by the end of 2024 amid sustained pressure.
The resignation of the central bank head comes after key ministries were reshuffled Saturday as the government faces mounting pressure from economic challenges. The Cabinet shake-up, which was approved by parliament in an emergency session, affected 13 ministries, including health, education, culture, local development and irrigation. The country’s minister of tourism and antiquities also was replaced.
Egypt’s expansive tourism industry, which employs millions, was hit hard by years of turmoil, the COVID-19 pandemic and then the war in Ukraine. Prior to the conflict, around a third of tourists to Egypt came from Russia.
Russia’s war has been deeply felt in other ways in Egypt, the world’s largest wheat importer that sources around 80 percent of it from the Black Sea region.
In the first weeks after the invasion of Ukraine in late February, the price of wheat and other grains skyrocketed, as did the price of fuel. Although prices have come down somewhat, the cost of grains remains at least 50 percent higher than before the pandemic in early 2020. Furthermore, the cost of shipping to export those grains through the Black Sea is high.
Inflation in the country of 103 million people reached 14.6 percent in July, increasing pressure on lower-income households and everyday necessities. Around a third of Egyptians live in poverty, according to government figures.
The World Bank notes that Egypt’s government announced an assistance package worth 130 billion pounds (more than $8 billion) just before devaluing the pound in March to alleviate the impact of rising prices. The package aimed to increase public-sector wages and pensions, as well as expand direct cash assistance programs.
Egypt’s Gulf Arab allies have come to its assistance with multibillion-dollar investments buoyed by high oil prices that have helped their bottom line.
Saudi Arabia’s sovereign wealth fund, known as the Public Investment Fund, recently established a division in Egypt that has already announced deals worth $1.3 billion with the aim of bringing in $10 billion into Egypt.


OPEC+ may consider output cut of more than 1 million bpd

OPEC+ may consider output cut of more than 1 million bpd
Updated 16 sec ago

OPEC+ may consider output cut of more than 1 million bpd

OPEC+ may consider output cut of more than 1 million bpd
  • The figure is slightly above estimates for a cut given last week

RIYADH:  The Organization of the Petroleum Exporting Countries and its allies led by Russia, also known as OPEC+, will consider an oil output cut of more than a million barrels per day when it meets on Oct. 5, OPEC sources told Reuters on Sunday.

The figure is slightly above estimates for a cut given last week, which ranged between 500,000 bpd and 1 million bpd.

OPEC+ is meeting in person in Vienna for the first time since March 2020. “It is a meeting that is taking place at a very interesting global time,” one of the sources said.

The output cuts are being considered on the back of a slide in oil prices from multiyear highs reached in March and market volatility. Saudi Arabia first flagged the possibility of cuts to correct the market in August.

Earlier this week, a source familiar with Russian thinking said Moscow could suggest a cut of up to 1 million bpd, while an OPEC source put the likely figure closer to 500,000 bpd. Talks are expected to continue ahead of the meeting.

FASTFACTS

OPEC+ is meeting in person in Vienna for the first time since March 2020.

Saudi Arabia first flagged the possibility of cuts to correct the market in August.

The output cuts are being considered on the back of a slide in oil prices from multiyear highs reached in March and market volatility.

India cuts tax

The Indian government has cut a windfall tax on domestically produced crude oil to 8,000 ($97.99) rupees per ton from 10,500 rupees per ton from Sunday, after a decline in global oil prices.

India has also scrapped an export tax on jet fuel and halved export duties on diesel to 5 rupees per liter from Sunday, a government notification said.

NNPC transaction

Nigeria’s state-owned oil company NNPC Ltd. has bought the marketing business of unlisted OVH Energy, giving it access to 380 fuel stations in Africa’s largest

oil producer and Togo, among other assets, the two companies said on Saturday.

OVH Energy Marketing, the owner and operator of Oando branded retail service stations, said the outlets would be rebranded NNPC and full integration is expected by the end of 2023.

The deal also gives NNPC access to eight liquefied petroleum gas plants, three aviation depots and 12 warehouses.

NNPC, which became a commer- cial entity in July, already owns more than 500 fuel stations across Nigeria and said it would be ready for an initial public offering by mid-next year.


Saudi real GDP expected to rise by nearly 8 percent, say analysts

Saudi real GDP expected to rise by nearly 8 percent, say analysts
Updated 17 min 54 sec ago

Saudi real GDP expected to rise by nearly 8 percent, say analysts

Saudi real GDP expected to rise by nearly 8 percent, say analysts
  • Inflation is predicted to be 2.6 percent and 2.1 percent in 2022 and 2023 respectively: Al Rajhi Capital

RIYADH: Saudi Arabia’s budgeted revenues for 2023 are likely to be based on the Brent price at $76 per barrel, said Al Rajhi Capital in its assessment of the Kingdom’s budget figures.  

“For 2023, we believe oil revenues could reach SR754 billion ($200.7 billion) and non-oil revenue at SR417 billion,” said the head of research at Al Rajhi Capital Mazen Al Sudairi.

“Based on our assessment, the government’s 2023 budgeted revenues are likely based on an assumption of brent at around $76 a barrel.” 

Real gross domestic product growth is forecast to increase by nearly 8 percent year-on-year in 2022 and 3.1 percent year-on-year in 2023, according to Al-Rajhi Capital.

Inflation is expected to be 2.6 percent and 2.1 percent in 2022 and 2023 respectively, Al-Rajhi said.

Revised 2022 revenues are mostly in line with estimates, however, the expenditure budget is much higher than from an earlier announcement, it said.

The Kingdom’s Finance Ministry’s preliminary budget statement projected spending to reach SR1.11 trillion next year, with revenue of SR1.12 trillion. 

The 2023 spending budget was raised by 18 percent, with a slight fiscal surplus of SR9 billion expected for 2023.

The world’s largest oil exporter is expected to balance the books in the coming year, having emerged with a quickly developing balance sheet due to the rebound in crude. 

Saudi officials expressed intention to change the heavy reliance on petrodollars and “decouple” the Kingdom’s spending from oil volatility as it puts the country’s economy at the mercy of uncertainty in the oil market. 

Its budget surplus was recorded at SR78 billion in the second quarter of 2022, an almost 50 percent rise from the same time last year. 

Its revenue reached SR370.4 billion whereas expenditure totaled SR292.5 billion in the second quarter of this year, according to the ministry. 

The ministry’s estimates showed that oil revenue stood at SR250.4 billion, signaling an 89 percent year-on-year rise in the second quarter. 

However, the Kingdom’s non-oil revenues only rose by 3 percent to SR120 billion in the second quarter. 

Domestic debt reached SR604.8 billion at the end of June, up from SR558.8 billion in the previous half, showed the ministry data. 

The Finance Ministry’s data showed that the Kingdom’s external debt fell from SR379.3 billion to SR361.8 billion in the same period. 

The objectives of the state’s general budget for the fiscal year 2023 come as a continuation of the process of work to strengthen and develop the financial position of the Kingdom, Finance Minister Mohammed Al-Jadaan said.

“The government attaches great importance to enhancing the support and social protection system and accelerating the pace of strategic spending on Vision (2030) programs and major projects to support economic growth,” Al-Jadaan added.

The Kingdom’s economy has demonstrated its strength and durability by achieving high growth rates, after taking many policies and measures with the aim of protecting the economy from the repercussions of inflation and supply chain challenges, the minister said.


Abu Dhabi Chamber of Commerce forms new board for businesswomen council

Abu Dhabi Chamber of Commerce forms new board for businesswomen council
Updated 02 October 2022

Abu Dhabi Chamber of Commerce forms new board for businesswomen council

Abu Dhabi Chamber of Commerce forms new board for businesswomen council
  • Council enables female entrepreneurs to capitalize on business opportunities

ABU DHABI: The Board of Directors of the Abu Dhabi Chamber of Commerce and Industry has formed a new board for the Abu Dhabi Businesswomen Council, Emirates News Agency reported.

The new board’s mission is to help female entrepreneurs improve their skills, introduce them to relevant laws and policies, and teach them how to take advantage of local and federal government initiatives.

It is part of the chamber’s efforts to help businesswomen and female entrepreneurs in Abu Dhabi contribute to the emirate’s economic growth.

The ADBWC board, chaired by Asma Al-Fahim, is made up of Abu Dhabi Chamber board members as well as successful Abu Dhabi businesswomen such as Nour Al-Tamimi, Dr. Khadija Al-Ameri, Marwa Al-Mansoori and Shaikha Al-Nowais.

“Over the past 50 years, the UAE has placed women’s empowerment amongst its top priorities and supported the Emirati woman to be a key partner in building the UAE,” Al-Fahim said.

She added: “The support of H.H. Sheikha Fatima bint Mubarak, chairwoman of the General Women’s Union, president of the Supreme Council for Motherhood and Childhood, supreme chairwoman of the Family Development Foundation and honorary chairwoman of the ADBWC, played a huge role in women’s development in all fields, especially entrepreneurship. Thanks to H.H. Sheikha Fatima, the Emirati woman is now equipped with all the factors of success to occupy her proper place regionally and internationally.”

Al-Fahim added that the ADBWC is eager to increase communication with businesswomen in Abu Dhabi in order to keep them up to date on the latest economic changes.

Furthermore, Al-Fahim said that the council will launch new initiatives and programs to support the business environment, giving female entrepreneurs the necessary tools to capitalize on business opportunities locally, regionally and internationally.


Saudi Mouwasat completes $27m acquisition of 51% of Jeddah Doctors Co.

Saudi Mouwasat completes $27m acquisition of 51% of Jeddah Doctors Co.
Updated 02 October 2022

Saudi Mouwasat completes $27m acquisition of 51% of Jeddah Doctors Co.

Saudi Mouwasat completes $27m acquisition of 51% of Jeddah Doctors Co.

RIYADH: Saudi healthcare provider Mouwasat Medical Services Co. said that it has completed the acquisition of 51 percent of Jeddah Doctors Co. in a deal worth SR102 million ($27 million).

The financial impact of this acquisition is expected to appear in the third quarter of 2022, according to a bourse filing.

Jeddah Doctors Co. is a Saudi closed joint stock company that owns a hospital presently under construction in Jeddah called Jeddah Doctors Hospital.


TASI in green as recession concerns ease: Closing bell

TASI in green as recession concerns ease: Closing bell
Updated 02 October 2022

TASI in green as recession concerns ease: Closing bell

TASI in green as recession concerns ease: Closing bell

RIYADH: The Saudi main index ticked up in its first trading session of October as investor recession fears subsided.

The Tadawul All Share Index ended  0.72 percent higher to reach 11,487; the parallel market Nomu edged 0.34 percent higher to 19,939.

Saudi oil giant Aramco ended with a 0.28 percent decline, while Rabigh Refining and Petrochemical Co. edged up 1.31 percent.

The Saudi National Bank, the Kingdom’s largest lender, fell 0.63 percent, while Saudi British Bank increased by 2.43 percent.

The Kingdom’s most valued bank Al Rajhi gained 1.48 percent, while Alinma Bank gained 1.93 percent.

Saudi Paper Manufacturing Co. decreased by 0.19 percent, after it signed SR166 million ($44 million) agreement with Italy-based Toscotec for a raw tissue paper roll production line.

Retal Urban Development Co. dropped 0.28 percent, after its shareholders approved a cash dividend of SR2 per share for the first half of 2022.

Tihama Advertising and Public Relations Co. declined 1.61 percent to lead the fallers, after the company and UK-based WPP postponed their merger agreement until Oct. 31, 2022.

Middle East Healthcare Co. led the pack of gainers with an increase of 9.93 percent.