Three in one THE CENTRAL Bank of Egypt (CBE) has decided to merge three commercial local banks into one new financial entity, after they failed to raise their capital in compliance with its capital adequacy requirements. The CBE move comes after the three banks failed to increase their capital to the LE500 million minimum capital required by the CBE. There have also been no serious offers to buy any of the three banks. The Nile Bank, United Egyptian Bank and Islamic Development Bank were merged together to form the United Bank. The new entity possesses an overall authorised capital of LE2.5 billion, and a paid-in capital of LE1 billion. The CBE, which is the owner and regulator of the new entity, will pump some LE2-2.5 billion worth of provisions into the new bank. CBE will also assume LE4 billion of the new entity's accumulated non-performing loans. The United Bank's activities will cover traditional banking, in addition to Islamic Banking transactions through a license acquired by the Islamic Development Bank. Mohamed Ashmawy, a veteran banker, was appointed head of the new entity. He resigned his position as vice president and managing director of the Commercial International Bank (CIB). Improved indicators THE EGYPTIAN economy is reaping the fruits of ongoing reform plans. This is reflected in an improvement in growth rates, a decline in inflation, and a reduction in interest rates, according to Minister of Finance Youssef Boutros Ghali. The minister said that the public debt status is improving, as part of steps to reduce the debt by half within the coming four years. The LE2.5 billion surplus which was realised in the balance of payments during the first half of the fiscal year 2005/2006 was yet another positive factor cited by Ghali. This has been characterised by a 38 per cent increase in exports to $8.6 billion in the same period. The value of foreign debt for its part has declined by 4.5 per cent, to reach $29.7billion in December. The figure compares to $31 billion in December of 2004. Ghali added that the budget deficit during the first nine months of the current fiscal year was LE32.3 billion. This accounts for approximately 5.4 per cent of GDP and compares to 5.7 per cent in the corresponding period of the previous year. Within this context, tax revenues have increased by 14 per cent, to reach LE64.4 billion. Slums upgraded GOVERNMENT efforts to upgrade Egypt's slums received a boost this week from several UN agencies. A project entitled "Integrated and Participatory Slum Upgrading in Egypt" was initiated by the Ministry of Housing, Utilities and Urban Development, as well as the Ministry of International Cooperation, the governor of the Upper Egyptian governorate of Al-Minya, and six UN agencies. The latter are UN-Habitat, the United Nations Development Programme (UNDP), United Nations for Population Affairs, (UNFPA), the International Labour Organisation (ILO), the United Nations International Fund for Women (UNIFEM) and the UN Childrens' Fund (UNICEF). The project purports to adopt an integrated approach which addresses inter-linked physical, socio-economic and environmental concerns. It also aims to strengthen the training capabilities of national institutions regarding integrated and participatory slum upgrading. A pilot slum upgrading project will be implemented on the local level in the city of Al-Minya, where some 56 per cent of the population lives in slums. Fertilisers down LOCAL fertiliser producing companies have agreed to decrease the price of fertilisers, in response to a request by agricultural cooperatives which complain that fertiliser prices are too costly for Egyptian farmers. The decision is expected to put an end to the current fluctuations in prices. It sets the price of fertilisers at LE35 per sac, for regular fertilisers, and LE38 per sac, for high quality fertilisers. It also comprises the establishment of a committee of representatives of the private sector, cooperatives and the Principle Bank of Development and Agricultural Credit. The objective of the committee will be to ensure that the new decision will be properly implemented. Shares of fertiliser allocations will be maintained at their current quotas. The Principal Bank for Development and Agricultural Credit is responsible for distributing 30 per cent of fertilisers, while cooperatives receive 36 per cent and the private sector 35 per cent.
