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Swiss firm to provide bird flu medicine

Egypt has reached an agreement with Swiss pharmaceutical company Roche Holding AG, the sole manufacturer of the antiviral medicine Tamiflu, to reduce the retail price of its product to £E 90 per pack from £E 200. The company has agreed to provide Egypt with 1.2 million packs of Tamiflu in 2006. A company official said discussions are under way into the possibility of producing the medicine in Egypt.
Tamiflu is available at government hospitals for between £E 70 and £E 90, but only for those exhibiting flu-like symptoms. Pharmacies, however, are selling the 10-pill course for as much as £E 490, when available.

The antiviral drug oseltamivir (Tamiflu) is currently the primary treatment option for the H5N1 bird flu virus. The drug must be taken within two days after the appearance of symptoms, although it is unclear how effective Tamiflu will ultimately prove against H5N1 if it mutates into a strain transmissable between humans. In Southeast Asia, resistance to it seems to be developing quickly. Another antiviral flu drug, Relenza, may be an alternative.

PM unveils job plan

Egyptian prime minister Ahmed Nazif said tackling unemployment is among the top priorities of the government's new agenda. Outlining the plan for the People's Assembly, Nazif said the cabinet will give priority to job creation to absorb the growing workforce and to implement President Hosni Mubarak's campaign promise to create 4.5 million new jobs in six years.

During his presidential campaign, Mubarak vowed to raise the salaries of 5 million to 7 million civil servants, build 500,000 new housing units, thousands of miles of roads, 3,500 schools and 1,000 factories. Nazif's seven-pillar plan touched on those issues, with goals to encourage investment and private sector participation in infrastructure and service projects, increase civil servants'salaries by 75-100 percent and expand social insurances, improve the level of services in education, health, transport and housing, push legislation to modernize the banking system, develop the political and legislative atmosphere to support economic reforms, and continue efforts to enhance Egypt's position in Arab and international arenas.

Nazif pledged $260 million for small and medium-sized enterprises, which he said should lead to the creation of 150,000 jobs. In addition, approximately 130,000 jobs will be created annually through bank loans. Nazif said the funding of large projects should generate 240,000 jobs each year and also promised the creation of some 125,000 jobs in the tourism industry as the result of a program to boost tourism.

Municipal elections postponed

The Egyptian parliament has approved a controversial two-year postponement of municipal elections despite fierce objections from the US and Islamists. President Hosni Mubarak issued a decree in early February calling for the delay, which he said would allow more time to draft legislation that would give municipalities more power. Parliament quickly passed the decree amid protest from the Muslim Brotherhood, the banned but tolerated Islamist movement that controls a fifth of all parliamentary seats. US officials have also voiced criticism, viewing the postponement as a setback to democratic reform.

Companies ready bids for 3G network

The Egyptian Ministry of Communications & IT (MCIT) has released the terms for bids on Egypt's third mobile license, bidding for which opens on April 17. Interested firms must put up a guarantee of $4.4 million and, according to the terms, offers from international companies that have local partners and are willing to trade a portion of the shares on the local bourse within two years of operation will be favored.

Potential bidders include Kuwait's MTC, Emirates Telecommunications Corporation (Etisalat) of the United Arab Emirates, Egypt's Raya Holding in an alliance with South African firm MTN, and Egypt's fixed-line monopoly Telecom Egypt. Saudi Telecom has said it is studying potential investments in the region, including the third license in Egypt, but has not announced its intention to bid.

Vodafone Egypt and Mobinil operate Egypt's two existing mobile phone networks, with close to 13 million subscribers. MCIT is requiring the new mobile network to be 3G compatible, and is giving the two current operators the option of upgrading their networks to support 3G services.

QIZ may extend to North Sinai

Egypt will hold talks with the US in the coming period to discuss expanding the qualifying industrial zones (QIZ) agreement to cover North Sinai governorate. According to US ambassador to Egypt Francis Ricciardone, this step is part of a plan to help developing industries in the governorate export their products to the American market and he emphasized the US commitment to supporting Egypt's economy as well as developing the private sector.

Banks queue up for stake sale

The expected sale of Bank of Alexandria in March has drawn interest from two of Britain's largest banks, HSBC and Barclays, as well as France's BNP Paribas. US-based Citigroup is conducting the sale of a 20-percent stake in state-owned Bank of Alexandria, which puts it out of the running for a bid. An additional 5 percent will be sold to employees and the rest of the bank to a strategic investor.
Egypt's Commercial International Bank (CIB) is also reportedly interested in a stake in the bank, as is Bank Audi of Lebanon.

To promote the sale of the bank, Egypt's government paid off about $1.2 billion of Bank of Alexandria's non-performing loans and has demonstrated its commitment to reforming the financial sector.

World Bank gives nod to power project

The World Bank has approved financing for a $260 million power project to help Egypt enhance its supply of sustainable energy. The El-Tebbin Power Project includes construction of the El-Tebbin Power Plant, a 700 MW power plant comprising two units of 350 MW steam turbines and boilers using natural gas as fuel. In addition, the project will focus on technical assistance to address key issues facing the sector such as the need for better financial performance, strengthening the pricing structure and energy efficiency.

The project is expected to create 2,000 jobs during the construction phase and 800 more during its operation period. The World Bank will finance the project by issuing a $260 million fixed spread loan (FSL), with a 20-year maturity and a five-year grace period. The loan will be issued by the International Bank for Reconstruction & Development (IBRD).

CIB stake nets $230 million

A consortium of investors purchased 18.7 percent of Commercial International Bank (CIB) in a deal worth an estimated $230 million. The consortium, headed by Ripplewood Holdings, Eton Park Capital Management and RHJ International, will purchase the stake for £E 53.50 per share. The sale completes the divestment of National Bank of Egypt (NBE) in CIB and the investment consortium will take over NBE's seats on the board.

The consortium will support CIB's expansion in the local and regional consumer market by providing technical expertise for new retail products. Ripplewood is a private equity fund manager based in New York with investments of over $2 billion. Eton Park Capital is an investment company with offices in New York and London and $4.5 billion of funds under its management. RHJ International is a Belgian investment company.

UNDP report urges development

The latest Human Development Report of the United Nations Development Program (UNDP) calls for the intense modernization of social services and utilities for ensuring long-term development of human security. The report calls upon the private sector to encourage investment, as well as to improve the quality of exports and the efficiency of manpower.

It stresses the need for employment creation, citing three sectors with the potential to yield the greatest results: export-oriented manufacturing, which includes both goods and services, rural and urban; high-tech services relating to a number of sectors including tourism, information technology, finance and transport; and finally, personal services. The report also suggests drawing a "roadmap" for the relocation of hubs for development, agriculture and industry in order to provide greater attention to rural, underutilized areas.
Also on the list of necessary improvements is the need to eradicate illiteracy, control Egypt's rapidly growing population, and improve the quality of drinking water and sanitation to avoid renal failure and water-borne illnesses. Finally, the report highlighted the need to establish harmony between the government and civil society in order to achieve the goals.

Kenya mulls anti-dumping measures

Kenya is examining whether to place countervailing duties on Egypt under the Common Market for Eastern & Southern Africa (COMESA) agreement in order to protect the Kenyan industry against subsidized Egyptian goods. According to Kenya's ambassador to Egypt, Mary Odinga, Egypt could flood the COMESA region with heavily subsidized commodities, in some cases up to 600 percent cheaper than those produced in Kenya. Kenyan flour millers have complained about the influx of cheap Egyptian products into the COMESA market, claiming that Egypt imports wheat then uses subsidized power, cheap labor and low-cost transport to dump processed wheat products in the region.

Kenyan trade minister Mukhisa Kituyi told local manufacturers the government would address concerns that producers were losing market share to cheap, subsidized products from Egypt. Kenya has previously blocked imports from Egypt, prompting a retaliatory blockade of Kenya's tea exports to Cairo.
Kituyi said the country would send a team to Egypt to evaluate the production conditions and, if deemed necessary, will seek necessary protection.

Pipeline to transport gas to Europe

Turkish-Egyptian company Tergas will construct a pipeline and transport and market Egyptian natural gas to Europe. The company will undertake the construction of a 323-kilometer-long pipeline between Syria and Turkey that will transfer up to 4 bcm/year of natural gas to Turkey and up to 6 bcm/year of natural gas to Europe via Turkey. The project is slated for completion by the end of 2007.

Israeli industrial imports rise

Egypt's imports from Israel rose by 214 percent to $93 million in 2005, according to a report by the Israel Export Institute. Most imports consisted of textiles and clothing, and chemical and refined oil products.

The report partially attributed the increase to the launch of the qualifying industrial zones (QIZ) agreement in early 2005. The trilateral agreement allows Egyptian goods duty- and quota-free access to the US market provided they contain 11.7-percent Israeli input.

Sugar prices to climb

Rising sugar prices worldwide and a widening gap between the level of production and consumption in Egypt have led local sugar suppliers to increase prices. Egypt produces 1.5 million tons of sugar annually and imports 1 million tons at a cost of approximately $400 million. Industry analysts expect the price of sugar to rise above £E 3 per kilogram by the end of the year. A kilo of sugar currently costs £E 2.50.

Egypt clenches African Cup

Host nation Egypt won a record fifth African Cup title when they defeated Côte d'Ivoire 4-2 during a penalty shootout after both teams failed to score during regular and extra time. Egypt also won the biennial football competition in 1957, 1959, 1986 and 1998. The Africa Cup of Nations is held every two years, with Egypt last playing host in 1986.

Following the victory, the local business community, led by Orascom Telecom's Naguib Sawiris, ART's Sheikh Saleh Kamel and Prince Turki bin Abdel Aziz, announced a financial award of £E 15 million in appreciation of the national team's effort. Each member of the team and its management will receive about £E 500,000.

Study links mobiles to job growth

A new report commissioned by Kuwait's MTC has found that the mobile phone industry in the Middle East and North Africa (MENA) region is creating hundreds of thousands of new jobs inside and outside the industry, boosting economic growth and fostering social harmony and security. The report, conducted by independent research firm Zawya, highlights both economic and social effects of mobile communications usage on the MENA region.

Its results show that mobile revenues alone accounted for 5 percent of the increase in GDP in Bahrain between 2002 and 2004. In Jordan, the number of employees in the mobile sector increased by 42 percent over the four-year period of liberalization.

The report found that in Egypt for every job created in the mobile sector, eight other jobs are created in different sectors of the economy. It also determined that if ICT investment in Egypt were to double it would create 1.3 million new jobs and double GDP growth to 8 percent.

EIB issues £E 300 million bond

The European Investment Bank (EIB), the lending arm of the European Union, made its first issue denominated in Egyptian pounds last month with a synthetic bond that will be sold on the international market. The bond, worth x44 million (£E 300 million), carries a coupon of 6.5 percent and matures in two years. It is the longest outstanding synthetic bond denominated in Egyptian pounds, and is repayable in euros and based on a formula linked to the Egyptian pound-euro exchange rate. Synthetic bonds are often a prelude to issuing bonds in a country's local currency.

Tax deadline approaching

Egyptians are submitting their annual tax invoices in accordance with the new tax law 91/2005 that came into effect last year. The General Tax Authority has launched a television and newspaper advertising campaign to encourage taxpayers to estimate and file the tax returns on time. It also launched the Salary Tax Calculator, a tool on its website to help citizens calculate their income taxes.

The new tax code reduced taxes from around 40 percent to 20 percent of revenues. It also introduced the self-assessment system whereby citizens are to assess their own taxes and file them along with the relevant papers, of which only a random sample will be audited. The shift to the self-assessment system was introduced to create trust between taxpayers and the Tax Authority.

Minister of Finance Youssef Boutros Ghali expects the tax reductions in the new law to cost the treasury some LE 3.6 billion a year, but says they will be regained in three years with the expected economic and investment boom due to the major tax incentives. The deadline to file taxes is March 31, 2006.

National carrier to offer 20-percent stake

Minister of Civil Aviation, Ahmed Shafiq announced that a 20 percent stake of state-owned airline EgyptAir would be offered to the public as part of the government's overall strategy to sell off its assets. The remaining 80 percent, however, will remain in hand of the government to ensure that loans for new planes would still get state backing. No specific timeline was set for the sale.

EgyptAir Holding Company has seven subsidiaries including the EgyptAir airline, EgyptAir Maintenance & Technical Affairs, EgyptAir Ground Services, EgyptAir Inflight Services, EgyptAir Cargo, EgyptAir Hospital and EgyptAir Tourism and Tax Free Shops. The company's net profit reached LE 644.4 million during FY 2003-04, with total revenues reaching LE 947.1 million.

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