A review of Egypt's economic activities in 1999 in different sectors
Egypt, Economics, 12/28/1999

The year 1999 with all its events, hopes and fears has witnessed a host of invigorated activities in the various sectors of Egypt's economy.

A brief review of these activities is illustrated in the following domains :

Egypt's stock exchange (ESE)

A ministerial decree on amending rules of the money market executive statute was issued including converting for the first time the money market bearer shares to nominal ones according to specific conditions, a matter which helps companies to stand up to problems which erupted by bearer shares.

Moreover, a credit assortment certificate providing a crucial protection for investors was issued with every share.

The Cabinet endorsed a draft law on exempting companies investing in the stock market from capital gains taxes rating 40 per cent of their profits.

On the same plane, a full-dressed plan for developing the systems of circulation settlement, control and clearance was adopted with an aggregate cost of L.E. 15 million.

The system maintained stringent control on the market along with making an assessment of all supplies, demands and assets of all companies.

The system also envisaged applying the automatic system for controlling circulation of companies registered in the ESE capable of tackling 100,000 transactions daily compared to 2500 transactions. Telecommunications network links the Stock Exchange to the governorates and facilitates circulation as well.

Banking:

The year 1999 focused on the structural development of the Egyptian banks which mainly hinged on enhancing capital of the Egyptian banks and other relevant issues such as merger and privatization as well as introducing an electronic system of clearance and settlements.

On the other hand, a group of big European banks including the ANG Barings Bank, the German BHF Bank and the Belgian BBL Bank started steps to expand their activities in the Egyptian market with estimates standing at $600 million.

The year 1999 further witnessed the merger of the Arab Real Estate Bank with the Egyptian Real Estate Bank as the first has purchased the shares of the latter.

Termed as the first deal of its kind in the field of Banks' privatization, the Arab-African Bank has been sold at a price of L.E. 298 million to the Bahrain-based ABC Bank.

Privatization:

Some 62 companies were offered for public sale during the year.

From May until December 1999, 43 state-owned companies were put up for public subscription with revenues estimated at L.E. 6 billion, 10 per cent of these companies' shares were distributed among shareholders at a minimum level, whereas the rest were directed for developing and improving these companies.

The privatized companies' profits marked an increase of 42 per cent whereas profits by 32 companies went up to well over 25 per cent along with 100 per cent increase in the profits of 14 companies.

Value of profits realized by 39 companies put under Egypt's privatization process this year hit L.E. 1.4 billion as compared to L.E. 900 million before being privatized.

The sectors of chemicals, housing, contractors, cement and mills are among the most profit-making sectors under Egypt's privatization program.

Industry:

A well-designed plan has been implemented by the government to realize an industrial growth rate of 9.9 per cent and expand Egypt's industrial base. This includes diversifying investment incentives, widening the establishment of small-size industrial complex units in the various governorates along with adopting executive measures for applying a program for modernizing Egypt's industries and following up world trends in the field of industrial development.

The Ministry of Industry also embarked on an ambitious plan to lay down the foundation base of technological industries to keep abreast with the new spirit of the age.

The number of industrial projects established in 1999 reached 24,721 projects marking an increase of 448 per cent, with aggregate investment costs worth L.E. 96.2 billion.

Investment:

The international finance institutions have evaluated Egypt as one of the low-risk investment countries with higher credit capabilities.

In the first 10 months, the number of established companies that got the approval of the General Authority for Investment and Free Zones and the Companies' Department reached 3262 companies.

Aggregate value of the new companies hit L.E. 22.9 billion, realizing a growth of 7 per cent.

Technology:

The Year 1999 witnessed the application of the national project for technology renaissance by mobilizing all the society's efforts to use and produce technology.

President Hosni Mubarak pinpointed at the opening of the National Conference on the Promotion of Technology and Information held in September 99, the main axes for the establishment of a national technological industry capable of participation and competition in the various sectors, production and services.

Touching on the positive steps so far pursued along the path of information and technology industry, there are more than 400 Egyptian companies in this field up till 1999 with a market value of well over $681 million, marking an annual growth rate of 32 per cent, the world's second highest increase rate.

Moreover, a number of Egyptian companies contribute to assembling and manufacturing electronic computer components, covering 6 per cent of the volume of the Egyptian market. Volume of e-trade reached $15 million and is expected to reach $500 million in five years.

A ministerial committee on technological development was formed to set up an Egyptian technological base for communications, industry, agriculture, genetic engineering besides training cadres on the use of technology.

Volume of investments in the field of telecommunication hit $23.9 million and exports of programming and information hit $20 million in 1999.

Volume of local computer market hit 260,000 sets by the end of 1999 and number of users stood at one million.

Petroleum:

The Ministry's plan during the year, aimed at expanding areas of exploration for petroleum and natural gas in a bid to increase Egypt's oil reserves, making use of Egyptian petroleum potentialities and encouraging the private sector to invest in this field.

Moreover, the Ministry focused on achieving suitable rates of production able to meet both domestic and exportation demands and applying the most sophisticated technology.

The plan also aimed at getting suitable returns on oil exports and deals with amending the agreements with the foreign companies on searching for oil to ensure best terms in this concern.

In line with the development program of Upper Egypt, the Ministry encouraged international oil companies to invest in oil as these companies have been given concession areas in Assiut, Sohag and Aswan.

It is worth noting that the total number of new oil and natural gas finds during the first nine months of 1999, have reached 19 discoveries, 11 of which are oil discoveries and 8 natural gas and oil condensates.

Agriculture:

The Ministry of Agriculture's plan aimed at increasing the cultivated areas in Egypt as the plan was designed to realize an agricultural growth rate of 3.4 7. while agricultural exports under the plan realized an increase of L.E. 2 billion in 1999.

The aggregate investments in the agricultural sector reached L.E. 5 billion annually as the private sector's share hit L.E. 3.6 billion.

The 1999 Agriculture Ministry's plan also aimed at reclaiming 150,000 feddans annually in the Delta, Toshka, East Owainat and East and West Sinai.

The crop-cultivated areas have reached 15,129,000 feddans including the old areas of 12,174,000 feddans besides three million feddans in the new areas.

Power:

The strategy of the Ministry of Power focused on optimal exploitation of all available national resources and expansion in using alternative resources, with a special stress on the new and renewable energy sources.

In this regard, Japan decided to finance setting up a wind farm under the B.O.T. system in Zaafarana at an initial cost of $300 million with a capacity of 20,000 kilowatts.

Moreover, France started implementing the two biggest power-generating stations in East Port Said and Gulf of Suez under the B.O.T. at a total capacity of 1,3000 million kilowatts.

Previous Stories:
  Privatization activities on the rise   (12/22/1999)
  Ebeid: Government pays great heed to mega projects   (12/21/1999)
  Ebeid tells parliament on implementing Mubarak's reform program   (12/18/1999)

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