Egyptian Economic Performance (9/8/2007)
A. Net international Reserves Increase:
1. Net international reserves increased by 24.6% during fiscal year 2006/2007 to reach US$ 28.6 billion by the end of June which covers 8.9 months of merchandize imports.
2. Furthermore, Domestic liquidity increased by LE 32.1 billion, during July/May, Fiscal Year 2006/2007. The private sector accounted for 73% of total domestic credit by the end of May 2007; the industry sector accounted for 32.5% while the services sector got 29% and trade sector realized 17.2% of total domestic credit.
3. Total deposits reached LE 637.687 billion by the end of May 2007 against LE 608.607 billion April 2006. Moreover, total domestic liquidity increased by 16% during July/May fiscal year 2006/2007.
4. Balance of Payments realized an overall surplus of US$ 3.1 billion during July/March, Fiscal Year 2006/2007. In addition to that, trade between Egypt and the world reached US$ 42.2 billion or 19.9% against the corresponding period a year earlier.
B. Egyptian Exports to the European Union Boost up:
1. Non - oil merchandise Egyptian exports to Italy rose by 27% during the first quarter of 2007 as it reached € 405 Million against € 317 Million against the corresponding period a year earlier. The overall increase is attributed to the noticeable surge in processed products, fruits and vegetables, carpets, textiles, and furniture according to the commercial office in Rome.
2. Moreover, the non - oil merchandise Egyptian exports to the United Kingdom increased by 7% during the first quarter of 2007 as it reached ₤175 million against ₤163 million against the corresponding period a year earlier. The overall increase is attributed to the noticeable surge in processed products, fruits and vegetables, plastics, iron, and fertilizers.
3. Furthermore, the Egyptian exports to Italy reached € 990 million in 2006 against € 493 million in 2005. The overall increase is attributed to the noticeable surge in natural gas, energy equipments, and non-conventional industries. Therefore, France ranked fourth as a market for Egyptian exports after United Sates, United Kingdom, and Italy, as well as it ranked fifth as top investor in Egypt by LE 5 billion by March 2007.
C. A Program to Increase the Competitiveness of the Egyptian Industry:
1. A current program is implemented with overall investment costs LE 1.3 billion in order to enhance the competitiveness of the Egyptian industry.
2. The program categorizes the industrial sector into three main groups and deals with each one of them according to its capability in order to achieve the optimum performance and meanwhile realize cooperation and coordination among these groups.
3. Besides, the program aims at increasing total industrial Egyptian exports – except intensive energy use companies such as cement, iron, and aluminum - from LE 42 billion to LE 50 billion.
4. The first category comprises large industrial companies – around 600 companies with total investments US$ 66 billion and contributes by 70% of the total industrial exports- which have competition abilities and expertise in accordance with the international standards. An action plan has been adopted to raise the contribution of these companies in achieving the program objectives to reach 80% concerning exports and employment increase.
5. The second and third categories contribute by 20% of program objectives regarding exports and employment increase. The second category includes 2000 industrial companies which are small than the first category but with export potentialities and are considered raw materials provider for large companies.
6. The third category consists of 7500 small companies which supply components and raw materials for second category companies. Moreover, training, quality, and restructuring programs are adopted to increase and enhance the competitiveness of second and third categories.
D. Egyptian Exports to the EFTA Countries:
1. The Egyptian exports to the EFTA countries – Switzerland, Norway, Iceland, Liechtenstein- rose by 456% in 2006 as it reached US$ 316 Million against US$ 57 Million 2005. This overall increase is attributed to the enhancement in the Egyptian commodities competitiveness and their quality especially after signing Free Trade Agreement (FTA) between Egypt and EFTA.
2. This shift is mainly due to the significant increase in existing exports such as crude gold, oil, .. as well as new exports silver and natural gas.
E. New Emirate Investments in Egypt:
1. The Prime Minister met with a number of investors of al-Futtaim Group of the United Arab Emirates (UAE), which intends to pump LE 12.5 billion in the coming five years in Egypt in large-scale retail trade.
2. Al-Futtaim Group activities are expected to generate 70,000 job opportunities during the construction period, with 25,000 permanent jobs after implementation. In addition to that, LE 4 billion of the total sum will be allocated for real estate activities, with the rest going into development and economic activities.
F. The Energy Sector Developments:
New Oil Discovery:
- A statement released by Sharjah-based Dana Gas said that the company has made a new gas and condensate discovery in the West Manzala concession in Egypt at a production date of 16.5 million cubic feet of gas per day.
2. According to the statement, Centurion Petroleum Corporation, the upstream division of Dana Gas, has drilled the Dabayaa-1 well to a total depth of 3,001 meters and encountered a hydrocarbon-bearing interval that extends over a 10 square kilometer area.
3. Dana is currently the sixth largest natural gas producer in Egypt, where about 64 companies are active in exploration and production. The country has doubled its total gas reserves in the last five years to over 70 trillion cubic feet.
Egyptian – Indian cooperation:
1. The Minister of Petroleum, received an invitation to participate in the International Conference “India – Africa for Petroleum and Natural Gas”, which India organizes during 6-7 November 2007 at New Delhi. This invitation comes in order to reinforce and establish economic partnerships in different domains of oil, gas, and petrochemicals industry between Egypt and Africa.
2. Moreover, the Minister of Petroleum acknowledged the Egyptian – Indian cooperation in oil especially in exploring and discovery where a specialized Indian company got the exploring rights for oil and gas in two areas in the Mediterranean with US$ 470 Million in addition to US$ 70 Million investments in petrochemicals.
Egyptian – Chinese cooperation:
1. The Minister of Petroleum, held talks with the Chinese delegation, visiting Egypt currently, which comprise representatives of a group of specialized Chinese companies in Petrochemical and refining activities. Talks included a study of establishing a joint refinery throughout the (BLOT) system, with a capacity of 5 million tons annually for producing high quality petroleum products, which are environmentally friendly in light of the ministry strategy to increase refining activities and meet local needs.
2. Also, it has been agreed upon studying the establishment of a project to produce "Dim ethyl Ether-DME" which is produced from natural gas and is used to be mixed with LPG to increase its productivity, pointing out that this project will lead to the reduction of LPG imports along with increasing its local production.
3. Cooperation in drilling activity is considered one of the most important and effective joint cooperation fields between the two countries throughout the Onshore Drilling Rigs production plant which is the first of its kind in Egypt and the Middle East that will start production during this year in addition to the cooperation throughout Sino-Tharwa Company. which operates in the field of drilling and maintenance of all types of crude oil and natural gas wells in Egypt.
Al Hamra Terminal:
- A recent study conducted for the development of Al Hamra oil terminal's facilities and the related pipelines in order to increase its current export capacity from 600 thousand barrels to million barrels monthly, as well as its storage capacity from 800 thousand barrels to million barrels.
- Al Hamra Terminal is considered a major gathering point for the crude oil from the Western Desert area, where about 185 thousand barrels daily, expected to reach about 225 thousand barrels daily during the coming period