<blockquote class="wp-block-quote">“Men have singled out women of outstanding merit and put them on a pedestal to avoid recognizing the capabilities of all women” <cite>–Huda Sha’arawi, founder of the Egyptian Feminist Union</cite></blockquote>

Quote 2

Quote Of The Day

Egypt opened a new international airport on the outskirts of the capital on Saturday for an initial trial period, in a bid to ease pressure from Cairo’s main airport and help boost tourism.



The Sphinx International Airport, located near the Giza Pyramids and the new Grand Egyptian Museum, is expected to operate 30 flights by early February during its trial run.



The $17 million project comes as part of the Tourism Ministry’s plan to improve accessibility to historical sites from resort areas on the Red sea like Sharm el Sheikh and Hurghada. It will fully open in 2020.



The bombing of a Russian airliner shortly after it took off from Sharm el Sheikh in 2015 hit tourism numbers hard, continuing a downward trend that started with the years of turmoil following the “Arab Spring” protests of 2011.



Tourism revenues had begun to rebound, jumping 77 percent year-on-year in the first half of 2018 to $4.8 billion, before a deadly attack on a bus in December killed three Vietnamese tourists and their Egyptian guide.



The bus attack was the first deadly attack against foreign tourists in Egypt for over a year. -Reuters



&#8211; Mohamed Zaki

RC1D897951E0

Egypt Opens New International Airport in Giza for Trial Flights

Not only is the Football World Cup the most watched sporting event in the world, it is also among the most lucrative. It makes more money than any other sporting spectacle apart from the Olympic Games and attracts more eyeballs than anything else on the small screen.
The 2014 World Cup reached almost half the global population of 7 billion people, according to a report released by FIFA and Kantar Media. In-home television audiences were reported at 3.2 billion people, with the final viewed by a billion people – and everything about the World Cup just keeps super-sizing.
In 2026, 48 teams will compete at the World Cup, 16 more than the current field of 32; 80 matches will be played, 18 more than the current 64; and revenue will skyrocket with FIFA’s early calculations suggesting a more than $700 million hike in profits.
While those eye-popping numbers can be ogled at and analyzed over the next nine years, for this year’s tournament FIFA have continued the trend of increasing the prize money for the World Cup, which has happened for the last five editions. In 2018, rewards have increased by 40%.
A total of $400 million will be shared among the 32 participating teams, with each team set to finish with a minimum of $9.5 million ($1.5 million in preparation fee and $8 million for a group stage exit). The winners will take home $38 million.
That’s a lot of many to dish out for an organization that spent a significant time between May 2015 and February 2016 muddling through a massive corruption scandal, which resulted in 18 people and two corporations being indicted and a complete change of the guard.
Sepp Blatter&#8217;s 17-year reign at FIFA was ended when he was slapped with an eight-year ban (since reduced to six years) for an unethical offering of a cash gift and conflicts of interest. He was replaced in an interim capacity by Cameroon’s Issa Hayatou, who served president of the Confederation of African Football for 29 years and was initially accused of accepting a bribe, a charge he denied. In fact, no-one involved in the scandal was African, though a payment of $10 million from Danny Jordaan – president of the South African Football Association – to FIFA, which was then sent on to Jack Warner, head of the Confederation of North, Central American and Caribbean Association, apparently intended as developmental support, was key in Warner’s downfall. Jordaan escaped unscathed.
Hayatou was never intended to be a long-term appointment and handed over to Gianni Infantino in 2016. At 46 years old, Infantino became the youngest FIFA president since the Second World War, but has yet to properly win the hearts or minds of the football-following public.
A survey endorsed by Transparency International in March last year, 12 months after Infantino took over, revealed that 53% of the 25,000 fans who responded to the questionnaire do not have confidence in FIFA as an organization, while 98% of people claimed to still be concerned about corruption. More tellingly, for the purposes of this story and the tournament that will take place in June, 43% of people disapproved of Russia as hosts for the World Cup.
Some of that sentiment stems from the process of allocating World Cup hosts, which was investigated and shown to be questionable, some of had come from Russia’s involvement in the Ukraine and the third group of nay-sayers would have been those appalled by the history of racism in the Russian game, something that remains of particular concern for African players. Feelings aside, on June 14 the first whistle will blow and the tournament will kick off.
FIFA will hope the flagship event will take some of the focus off a turbulent last few years and pave the way for a more transparent and inclusive future. Here is a complete guide to what the organization is hoping can be forgotten, how the World Cup will be funded and what the African continent can hope to achieve from sport’s greatest showpiece.
<h2>Financial Losses and Forecasts</h2>
The effects of the scandal that dogged FIFA through most of 2015 were largely financial. An article published by The Economist in June 2017, revealed that FIFA lost three times more money in 2016 than in 2015 – $369 million – and were forecasting an even greater deficit in 2017, of $489 million. But in March 2018, FIFA’s annual report revealed losses of only $191.5 million in 2017, leading to the organization declaring itself as having had a “successful year for all key financial parameters”.  Still, FIFA’s reserves, which had been above $1 billion since 2008, dipped.
<a href="http://www.forbesafrica.com/politics/2015/07/01/fbi-tackles-fifa/" target="_blank" rel="noopener">READ MORE: The FBI Tackles Fifa</a>
Not all of the loss was due to the scandal; it was also attributed to more funding for members and changes to the accounting system. Legal bills more than doubled, from $20 million in 2015 to $50 million in 2016, and FIFA invested in a museum which cost $190 million, which added to their total costs.
FIFA anticipates a smoother financial road in its next four-year cycle and expects to earn $6.65 billion between 2019 and 2022 inclusive. It also plans to raise payouts to member associations in that time, with each to receive $1.5 million, an increase of $250,000 and FIFA hopes to end the 2022 World Cup with reserves of $1.9 billion.
“I am very pleased to see that Fifa is able to deliver on its promises,” Infantino said. “We had committed to restoring trust in the organization and boosting investments for the development of football worldwide. This is now a reality.”
<h2>Sponsorship</h2>
A major consequence of the corruption scandal was the loss of sponsors, which make up a significant portion of World Cup revenue. Big name companies such as Sony, Emirates, Castrol and Johnson &amp; Johnson opted not to renew their contracts. By June last year, FIFA had only secured 12 sponsors out of 34 for the World Cup and only one of them was Russian, Moscow’s Alfa-Bank. “With one year to go, this situation is unheard of,” Michael Payne, a former marketing chief for the International Olympic Committee told The Economist at the time.
Since then, FIFA have lined up several more firms, many of them Chinese. Wanda, a private-property developer, electronics company HiSense, smartphone maker Vivo, dairy company Mengniu, and electric vehicle firm Yadea, were all signed on by February as Chinese interest in FIFA grows.
“Mengniu is one of the biggest dairy producers in the world and is a strong brand in the Chinese market. Growing the game worldwide is one of our key priorities, and we now have another strong official sponsor in such an important region,” FIFA’s commercial manager Philippe Le Floc’h said when the dairy company signed off.
China’s interest in FIFA is particularly intriguing because of the country’s interest in hosting the World Cup. Chinese president Xi Jinping met with Infantino last June and a statement released by FIFA said Jinping had “expressed his hope, and the dream of many Chinese people, that the country would have the opportunity to host a FIFA Men’s World Cup at some stage in the future.”
Though China has not made any official statements about bidding for a tournament, speculation is high that they are interested in either the 2030 or 2034 edition.
Meanwhile, Qatar Airways have replaced Emirates until 2022, the year in which the World Cup will be held in Qatar.
<h2>Africa’s Big Five </h2>
This year, the continent will be represented by three North African and two West African teams, but current Africa Cup of Nations (AFCON) champions Cameroon are not among them. Neither are any teams from the east or south of the continent, which largely stems from the professional experience of players from these regions. North and West African players often gain experience in European leagues, especially France, while players in the east and south are less likely to find deals abroad.
Big things will be expected from the five nations, especially as no African team has progressed beyond the quarterfinals of a World Cup. A final four finish will be considered a major triumph as the continent continues to dream of its first world champions.
<a href="http://www.forbesafrica.com/politics/2016/02/01/111-years-fifa-not-african/" target="_blank" rel="noopener">READ MORE: ‘For 111 Years Fifa Has Not Had An African’</a>
On paper, Tunisia enter the tournament as the best hope. They are the highest-ranked side of the continent, 23rd overall, and have not been at the World Cup since 2006. They have never got past the group stage but with players like Youssef Msakni, who scored a hat-trick against Guinea during qualification and has netted 14 times in 51 international appearances, that could change. The challenge begins early, with their opening match to be played against England, something coach Nabil Maâloul believes will be a true test of character against players from what he calls “the best league in the world.”
For nostalgic reasons, Senegal may be the team considered most likely to break into the semi-finals. They are still regarded as darlings of Africa after they stole hearts with their surge to the 2002 quarterfinals, in their maiden World Cup. They have not been to the tournament since and may not have made it to this one but for a case of match-fixing in the qualifiers, which allowed them to replay a match against South Africa. Their coach, Aliou Cissé, was the captain in 2002, so he will be coming full circle for this event. Their hopes will rest on Sadio Mane, who was the most expensive African transfer when he was bought by Liverpool for $48.2 million on a five-year deal in 2016.
Morocco are Africa’s third-side, ranked 42nd, and have not been to the World Cup since 1998. Their coach Hervé Renard has overseen two successful AFCON campaigns, with Zambia in 2012 and Ivory Coast in 2015. Morocco’s strength is their defence, after they finished unbeaten during the qualifiers without conceding a single goal. Their captain, Medhi Benatia, is regarded as the most accomplished member of their squad. He plays for Italian giants Juventus and Morocco will need his experience in a tough group that includes Spain and Portugal.
Egypt have been away from the global game longest, having last played in a World Cup in 1990. Since then, everything about Egypt has changed, with the Arab Spring having profound effects on society and sport. The football league was cancelled for two seasons between 2011 and 2013 and the game suffered tremendously. Despite being seven-time AFCON champions, Egypt failed to qualify for the 2012, 2013 and 2015 editions of the tournament and have also never won a World Cup game. Now, they can change that. In their squad is the veteran goalkeeper Essam El-Hadary, who is 44 years old and will play in his first World Cup, and 25-year-old Liverpool forward Mohamed Salah, who has been compared to Lionel Messi and Cristiano Ronaldo recently. He has scored 32 goals in 56 internationals, including five during World Cup qualifying, the joint-highest in the campaign.
Lowest ranked among the African sides at 52nd overall, but perhaps with the highest expectation, is Nigeria, who are making their third successive World Cup appearance and seventh overall. They were the first African team to qualify for the World Cup, a surprise considering they missed out on the last two AFCONs. They have a strong squad which includes John Obi Mikel, a Chelsea stalwart who has since moved to China, Chelsea’s Victor Moses and 21-year-old striker Kelechi Iheanacho, who played for Manchester City before moving to Leicester City. Nigeria have been drawn with Argentina for the fifth time at a World Cup and that will be their key clash on the field. Off the field, Nigeria have long had problems between the players and the football federation surrounding bonuses around World Cups. An agreement on a pay structure was reached late last year.

		<style type="text/css">
			#gallery-1 {
				margin: auto;
			}
			#gallery-1 .gallery-item {
				float: left;
				margin-top: 10px;
				text-align: center;
				width: 33%;
			}
			#gallery-1 img {
				border: 2px solid #cfcfcf;
			}
			#gallery-1 .gallery-caption {
				margin-left: 0;
			}
			/* see gallery_shortcode() in wp-includes/media.php */
		</style>
		<div id='gallery-1' class='gallery galleryid-35989 gallery-columns-3 gallery-size-thumbnail'><dl class='gallery-item'>
			<dt class='gallery-icon portrait'>
				<a href='https://www.forbesafrica.com/cover-story/2018/05/02/big-money-big-dreams-africas-chances-at-the-world-cup/attachment/fbl-asia-c1-lekhwiya-nassr/'><img width="109" height="150" src="https://cms.forbesafrica.com/wp-content/uploads/2018/05/GettyImages-465168624-e1525256460666-109x150.jpg" class="attachment-thumbnail size-thumbnail" alt="" decoding="async" loading="lazy" aria-describedby="gallery-1-35992" /></a>
			</dt>
				<dd class='wp-caption-text gallery-caption' id='gallery-1-35992'>
				Youssef Msakni, Tunisia. Photograph proveded.
				</dd></dl><dl class='gallery-item'>
			<dt class='gallery-icon portrait'>
				<a href='https://www.forbesafrica.com/cover-story/2018/05/02/big-money-big-dreams-africas-chances-at-the-world-cup/attachment/senegal-v-zimbabwe-2017-africa-cup-of-nations-group-b/'><img width="127" height="150" src="https://cms.forbesafrica.com/wp-content/uploads/2018/05/2-e1525256488496-127x150.jpg" class="attachment-thumbnail size-thumbnail" alt="" decoding="async" loading="lazy" aria-describedby="gallery-1-35993" /></a>
			</dt>
				<dd class='wp-caption-text gallery-caption' id='gallery-1-35993'>
				Sadio Mane, Senegal. Photo provided.
				</dd></dl><dl class='gallery-item'>
			<dt class='gallery-icon portrait'>
				<a href='https://www.forbesafrica.com/cover-story/2018/05/02/big-money-big-dreams-africas-chances-at-the-world-cup/attachment/nigeria-v-bosnia-herzegovina-group-f-2014-fifa-world-cup-brazil/'><img width="150" height="150" src="https://cms.forbesafrica.com/wp-content/uploads/2018/05/GettyImages-451006518-150x150.jpg" class="attachment-thumbnail size-thumbnail" alt="" decoding="async" loading="lazy" aria-describedby="gallery-1-35991" srcset="https://cms.forbesafrica.com/wp-content/uploads/2018/05/GettyImages-451006518-150x150.jpg 150w, https://cms.forbesafrica.com/wp-content/uploads/2018/05/GettyImages-451006518-100x100.jpg 100w" sizes="(max-width: 150px) 100vw, 150px" /></a>
			</dt>
				<dd class='wp-caption-text gallery-caption' id='gallery-1-35991'>
				John Obi Mikel, Nigeria. Photograph provided.
				</dd></dl> <dl class='gallery-item'>
			<dt class='gallery-icon portrait'>
				<a href='https://www.forbesafrica.com/cover-story/2018/05/02/big-money-big-dreams-africas-chances-at-the-world-cup/attachment/egypt-v-cameroon-2017-africa-cup-of-nations-final/'><img width="150" height="150" src="https://cms.forbesafrica.com/wp-content/uploads/2018/05/4-150x150.jpg" class="attachment-thumbnail size-thumbnail" alt="" decoding="async" loading="lazy" aria-describedby="gallery-1-35994" srcset="https://cms.forbesafrica.com/wp-content/uploads/2018/05/4-150x150.jpg 150w, https://cms.forbesafrica.com/wp-content/uploads/2018/05/4-100x100.jpg 100w" sizes="(max-width: 150px) 100vw, 150px" /></a>
			</dt>
				<dd class='wp-caption-text gallery-caption' id='gallery-1-35994'>
				Essam Kamal Tawfik El-Hadary, Egypt. Photograph provided
				</dd></dl><dl class='gallery-item'>
			<dt class='gallery-icon landscape'>
				<a href='https://www.forbesafrica.com/cover-story/2018/05/02/big-money-big-dreams-africas-chances-at-the-world-cup/attachment/medhi-benatia-of-morocco-in-action-during-the/'><img width="150" height="150" src="https://cms.forbesafrica.com/wp-content/uploads/2018/05/3-150x150.jpg" class="attachment-thumbnail size-thumbnail" alt="" decoding="async" loading="lazy" aria-describedby="gallery-1-35995" srcset="https://cms.forbesafrica.com/wp-content/uploads/2018/05/3-150x150.jpg 150w, https://cms.forbesafrica.com/wp-content/uploads/2018/05/3-100x100.jpg 100w" sizes="(max-width: 150px) 100vw, 150px" /></a>
			</dt>
				<dd class='wp-caption-text gallery-caption' id='gallery-1-35995'>
				Medhi Benatia, Morocco. Photograph provided.
				</dd></dl>
			 
		</div>

<h2>Racism </h2>
There is a danger, however, that the performances of Africa’s teams will be affected by the reception they receive in the tournament’s host nation. Russia is the country in which African footballers have faced the most brazen forms of racism. In 2015, anti-discrimination group Fare revealed research of over 100 incidents of racist behavior in Russian football over two seasons and high-profile players, including Ivorian superstar Yaya Touré and Cameroon’s Samuel Eto’o, have complained about being on the receiving end of monkey chants. Touré has even offered his assistance to World Cup organizers to prevent the abuse continuing.
“I have been abused by racism and because those things happened to me, I try to be involved and I want to help those people who don&#8217;t have a voice to control this situation,” Toure said. “For me to defend an African boy in this situation is a blessing. What we are looking to do is to try and stop those idiotic people doing that. We have to be focused and have fair play everywhere.”
Touré’s help has not been taken up but Russia has appointed an anti-racism official Alexei Tolkachev, who admitted to The New York Times in 2015 that as young man, he participated in monkey chants, like many compatriots of the same age. “They do it because it was done before and because they don’t know any better,” he said. While Tolkachev advocated for greater education, he also shrugged off the problem, even though FIFA have indicated they will take it seriously.
Infantino has given referees the power to stop or even abandon matches if discriminatory incidents take place and recent evidence suggest that could well be the case. In January this year, Russian club Spartak Moscow posted a video on Twitter of three of its own Brazilian players, Luiz Adriano, Pedro Rocha and Fernando in training in the United Arab Emirates with the words, “See how chocolates melt in the sun.” The tweet was deleted but not before anti-discrimination group Fare condemned the club for showing, “a shocking level of ignorance.” The players involved, who are all black, later denied that any racism existed in Russian football.
<h2>Kick off </h2>
Despite myriad concerns facing the World Cup, it will go ahead and though there is much to discuss and debate, there is also much to look forward to.
For the first time, video assistant referees will be used at a World Cup, showing a move to embrace technology in decision making. In total, 100,000 jobs have been created and 30,000 volunteers will be used. Russia expects over a million visitors as fans from around the world make their way to the tournament, three million to fill the stadiums and more than three billion to watch on television. The numbers are staggering and only confirm that no matter what happens behind the scenes, the World Cup remains an all-encompassing global spectacle.
Let’s hope Egypt, Morocco, Nigeria, Senegal and Tunisia make Africa proud.
&#8211; By Firdose Moonda

Football players shooting

Big Money, Big Dreams: Africa’s Chances At The World Cup

The fallout of the Arab Spring brought its fair share of highs and lows, and while Egypt and Tunisia have had to grapple with some very worrying challenges, perhaps no country has embodied the elation and the trepidation of the new political landscape as Libya.
The political upheaval of the Arab Spring complicated the region’s economy. Economic grievances were a significant factor in the uprisings, but the resulting instability drove away foreign capital, dragged down output and spurred a rise in unemployment. However, Libya, nearly three years into the post-Gaddafi era, has seen some encouraging progress made in terms of restarting the economy and fostering a broader and more inclusive base for growth, but continuing unrest and the stubborn problem of armed militias continues to limit gains. There is no doubt that the country offers significant potential for investors, but the question remains: at what cost?
On the face of things, Libya ought to face the most grueling uphill struggle to restart its economy, given its prolonged conflict and the historical lack of any centralized governance structure. However, with proven oil reserves of 48 billion barrels, making up for around 3.5% of the global total, and a relatively small population of 6.5 million, the country has a wide range of policy options at its disposal to restart long-term sustainable growth—far more so than Tunisia or Egypt.
This is due in large part to the country’s natural largess. In 2012, oil accounted for 78% of GDP, 98% of exports, and 95% of all fiscal revenue. Oil exports also foot the bill for a vast system of regressive subsidies, which for electricity and fuel can be anywhere between 11% and 14% of GDP annually. With production averaging 1.5 million barrels per day (bpd) in the first half of 2013—up from a low of 30,000 bpd in 2011 and just short of the pre-revolution levels—revenues are also funding the country’s large public sector wage bill, which is estimated to cost roughly one-fifth of GDP but is a necessity, given the urgent need to expand employment and reduce the country’s poverty rate of almost 33%.
While the country’s resources give it a comfortable tool to jump-start growth and minimize short-term unrest, Libya’s broader performance over the past 18 months has also been comparatively strong. In July 2012, the country went through relatively peaceful general elections and by early 2013, headline indicators were impressively robust. The country saw real GDP growth of 95.5% in 2012, although this figure was distorted by the economy’s contraction of 60% in 2011. Nonetheless, the IMF is projecting 17% growth for 2013—the highest on the African continent—followed by more stable growth rates of 7% set to take place until 2017.
The strong growth has managed to recoup some of the capital that was withdrawn during the height of the country’s conflict. Outflows in 2011 were unsurprisingly significant. Most companies shut down operations completely and in some cases evacuated staff in a frenetic rush. The drop was all the more noticeable given the country’s star status in the preceding years. The end of United Nations sanctions in 2006 brought about an impressive growth in foreign direct investment into the country, in spite of caps on ownership requirements and the outsized-role of the state in directing activity. While post-Gaddafi Libya still grapples with a cumbersome bureaucracy and a burdensome regulatory framework for new investments, some of the less risk-averse companies have started to move in.
Oil is obviously one of the ripest attractions for foreign investors, particularly since Libya’s government is planning outlays of $10 billion over the next few years to boost overall production to 2.2 million bpd. Firms have been quick to move back in and the government moved quickly following the end of fighting to reaffirm the validity of existing contracts. Some companies—like Italy’s ENI, who holds signifcant stakes in the upstream sector—even resumed activity as early as mid-2011, although given the burdensome requirements of the previous regulatory code and the lacklustre rate of discovery, there are expectations that terms of some exisitng contracts may be renegotiated.
Foreign capital is also coming into the country’s long under-developed tertiary sector. While the state-dominated banking industry has nonetheless been grappling with a post-conflict jump in NPLs and decline in asset quality—and more worryingly, legislation in January 2013 that banned interest on all transactions in the country—there is abundant liquidity and no shortage of possible clients, which has attracted investors like Qatar National Bank, who acquired a 49% stake in Libya’s Bank of Commerce and Development.
Finally, infrastructure—which was a major recipient of foreign investment under the previous regime—is an area that offers enormous potential due to the volume of work needed. There is a need for capital in everything from sanitation to transportation to electrical transmission, and even property—particularly residential and commercial. There is less than 100,000 square meters of gross leasable area for grade A commercial property in Tripoli, a figure expected to grow tenfold over the medium-term. The new investment commitments and strong headline indicators represent the country’s highs but there are still plenty of lows that it must grapple with, both in the short- and long-term. The past 18 months have seen some notable and encouraging advancements, but a rosy outlook is far from assured.
One of the greatest challenges has been maintaning security and overall stability. The country’s loosely-organized militias were central to Gadaffi’s ouster, but controlling them after the revolution has proved to be problematic. Some of the larger militias in both Tripoli and Benghazi have resorted to kidnapping and extortion, in part to help pay wages, while armed groups have also used explicit threats and displays of force to pressure the government into passing favorable legislation, such as a ban on former government employees holding public office. Targeted attacks on diplomatic and government buildings in 2013 have also led to foreign embassies and corporations evacuating their staff again.
Recent months have also seen a troubling eruption of broader civil unrest, including strikes by workers, street protests and militia groups, primarily over insufficient and inadequate political representation or economic exclusion.
In August, a number of refineries, ports and pipelines were forced to shut down as a result of workers downing tools and militia blockades. Offloading and receiving capacity was already hurt by the damages incurred to key ports during the 2011 fighting, and given the heavy reliance on both imports—which account for 75% of food staples—and export earnings, recent port stoppages are weakening the overall economy further.
The lost earnings could amount to $4 billion a month and the damage in terms of output and attracting capital is a concern and could have longer-term implications. Concerns over supply reliability may force the country to discount its oil price in future contract negotiations, and some operators, like the United States-based Marathon Oil recently announced that they are exploring a potential sale of their stake in a local consortium.
Libya currently finds itself at a critical juncture and how things play out over the coming months will have a significant impact on the country’s long-term prospects. Libya has the ability to emerge from the fallout of the Arab Spring in far better shape than either of its neighbors, but with the stubborn problem of militia violence and continuing unrest, it looks like a challenging task.

A New Dawn Of Uncertainty

Over the past two years, Egypt has undergone a significant transformation, not only politically but also economically. The protests in Cairo’s downtown Tahrir Square, in January 2011, have had a wide-ranging impact not only on the country’s political composition, but also on its short- and medium-term economic performance. While the ups and downs since the revolution have been palpable, the downs obviously more so; the long-term fundamentals of Egypt remain just as appealing as they were in the years leading up to former President Mubarak’s ousting. Provided investors are willing to ride out the immediate uncertainty, the prospects for growth are encouraging.
In the pre-crisis days of 2007 and 2008, Egypt was racking up GDP growth in excess of 7% and services like telecommunications were growing by double digits annually; tourism jumped up by as much as 21% in one year. The country’s stock market, one of the continent’s largest both in terms of listed firms and capitalization, attracted significant inflows from foreign institutional investors, while the banking sector—leaner and meaner after several years of consolidation and robust regulation—saw a drop in non-performing loans and an increase in profitability.
But the combination of falling global demand, together with revolutionary instability, meant that GDP growth last year fell to 1.8%. Growth in 2012  was only slightly better, at 2%, while forecasts for 2013 are at a solid but lower-than-needed 3%. Foreign Direct Investment (FDI) fell by more than $10 billion in 2011 and key sectors, like tourism, have slumped, contracting by nearly 6% over the most recent fiscal year. Industrial action has depressed manufacturing output in labor-intensive sectors even as official unemployment has risen to 12%, not counting the vast ranks of the underemployed.
Egypt faces problems that have been exacerbated by the revolution—including some very pressing long-term political questions, ranging from the creation of a new constitution to improving institutional trust—but among the more urgent challenges is the lack of inclusive growth. The subsidy debate highlights this most acutely. Government grants and social benefits made up roughly one-third of total expenditure in the 2011/12 fiscal year, which runs from June to June, according to the ministry of finance. Reducing the burden is a priority for President Mohamed Morsi’s new government, yet reforming subsidies carries not only significant political risk but also fails to alleviate the pressure on the most vulnerable portions of the population. As a result, steps have been tentative at best. The focus has been primarily on energy subsidies and the most recent version of the 2012/13 budget from May 2012 sought a reduction in fuel subsidies by some 27%, with consumption-intensive industries seeing the most significant increase in costs. Food subsidies have been left untouched.
The country is also grappling with an increasingly hollow labor structure, which exacerbates income inequality. Figures from Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS) show that unemployment among university graduates reached 18.9% in 2010 and a similar study in 2012 revealed that demand for high- and low-skilled workers is outstripping that for middle-skilled employees, dampening social mobility and constraining opportunities for the middle class.
However, for a short period there was a steady stream of more encouraging news, which while not exactly pointing to a full-fledged recovery, hinted at a more hopeful outlook. Growth forecasts for 2013 were pegged at 3%, still far lower than what is needed but nonetheless comparatively robust. Headline inflation, which reached as high as 18% in the pre-crisis years, dropped to a far more manageable 5.4% in August. Similarly, yields on a number of Egyptian bonds had eased to some of their lowest levels in nearly a year in September when the country hawked its first floating-rate bonds. Around roughly the same time, Moody’s reaffirmed its B2 rating for Egyptian sovereign bonds, due in part to an improving political outlook, along with a more stable external payments position, stronger macroeconomic conditions and a restart of International Monterary Fund (IMF) negotiations—all of which spelled good news for the government.
By the end of the year, however, things began to look rocky again, with the pound dropping precipitously, from 6.05 to the dollar to 6.30 to the dollar. Deficit estimates from the current     fiscal year, ending in June, may hit up to 10% of GDP. Combined with continuing political instability in the wake of protests over the constitutional referendum, the spate of worsening indicators is far from encouraging for Egypt’s policymakers.
The IMF loan, which could be worth up to $4.8 billion, is particularly important in terms of strengthening investor confidence, which has been hit hard not only by the broader uncertainty but also by regulatory hiccups and governance scandals, particularly in sectors such as real estate and construction. However, with one of the most attractive price-earnings ratios in the region, Egypt’s firms remain extremely attractive on a value basis and the country’s stock market has rebounded by more than 37% in recent months.
There is still potential for a turnaround for the country’s economy, but if this momentum is to be sustained in the years to come, Egypt will need to better leverage its competitive advantages. Crucially, Egypt benefits from both strong export ties and a vast consumer population, which provides firms with access to large domestic and foreign markets. In spite of rising subsidies and wages, the country is nonetheless extremely competitive as a manufacturing destination. Furthermore, significant upstream gas reserves have the ability to provide feedstock not only for Africa’s largest refining sector but also for the rapidly-growing electricity segment, which is racing to keep up with annual demand growth of 7%.
It is difficult to understate the impact of Egypt’s 2011 revolution, given the economic ramifications of the massive political changes the country has undergone. The past two years have been turbulent but if the country can better exploit its healthy long-term fundamentals, a return to robust growth is virtually assured.

Tag: Egypt

FORBES AFRICA SOCIAL MEDIA

Quote Of The Day

Egypt Opens New International Airport in Giza for Trial Flights

Big Money, Big Dreams: Africa’s Chances At The World Cup

A New Dawn Of Uncertainty

Egypt Rising