VenturesNow

Egypt’s non-oil private sector continues on downward trend

Published

1 year ago

July 6, 2023

A recent survey by S&P Global has shown that activity in Egypt’s non-oil private sector continued on a downward trend in June.

According to the survey, the Purchasing Managers’ Index (PMI) increased from 47.8 in May to 49.1 in June, but it remained below the 50.0 mark, which distinguishes expansion from contraction, for the 31st consecutive month. Employment also decreased for the seventh consecutive month, while output decreased once more, albeit at a slower rate of 48.8 versus 46.3 in May.

“Egypt’s non-oil private sector economy remained under pressure at the end of the second quarter. Price pressures, liquidity issues, and weak demand drove total business activity volumes lower,” S&P Global said.

“That said, both output and new orders fell at weaker rates, pushing the headline index up.”

According to principal economist at S&P Global, Joe Hayes, “However, despite positive directional movements in a number of sub-indices, business confidence fell to its second-lowest level on record, highlighting a somber mood amongst businesses across Egypt’s non-oil private economy.”

Egypt, which has occasionally received assistance from other Arab League members in recent years, is presently experiencing financial strain. Inflation is also a problem, as core inflation increased to 40.3% in May from 38.6% in April. The inflation figures for June are yet to be released.

VenturesNow

IMF mission concludes 4th loan program assessment in Egypt

Published

14 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.