FDI decreases THE VALUE of foreign direct investments (FDI) flowing into Egypt during fiscal year 2009/2010 reached $6.8 billion, according to a statement issued by the Ministry of Investment. The figure shows a 16 per cent decline in the value of foreign investments compared to the previous fiscal year, which had, under the pressure of the financial crisis, witnessed a retreat in the amount of investments injected by foreigners to reach $8.1 billion compared to its all-time high of $13 billion in 2007/2008. The oil sector kept the lion's share in its stake of FDIs, attracting around $3.59 billion, almost 53 per cent of the overall figure, compared to 67 per cent in the previous year. In the real estate sector, FDIs reached $305 million, or 4.5 per cent of the total, compared to one per cent in the previous year. In a statement, Minister of Investment Mahmoud Mohieldin was quoted as saying that Egypt had a good chance of luring more Arab, foreign and local investments within the framework of the improved investment climate and the procedures the country had adopted in a bid to facilitate the process, adding that 40 per cent of FDIs in 2009/2010 have been used to set up new companies and increase existing companies' capital. Ramadan pushes inflation upwards IN AUGUST, the year-on-year urban inflation rate accelerated to reach 10.9 per cent from 10.7 per cent in July, mainly due to increased food costs in the holy month of Ramadan, during which Egyptians frequently hold large banquets to break their daily fast. Prices rose by 2.9 per cent in Ramadan, the highest monthly increase since at least 2005, according to figures released by the Central Authority for Public Mobilisation and Statistics (CAPMAS). On the other hand, core inflation rates calculated by the Central Bank of Egypt, which exclude regulated prices of goods such as petrol and volatile items including fruit and vegetables, hit 8.2 per cent in August, compared to 7.08 per cent in July. Analysts believe the increases will raise the likelihood that the Central Bank will start moving interest rates up before the year is out. The bank, which has kept its benchmark overnight deposit rate unchanged at 8.25 per cent since September last year, will meet today to review its monetary policy. Egypt's economy expanded at a 5.9 per cent annual rate in the second quarter of 2010. During the fiscal year that ended in June, the economy grew 5.3 per cent. Madinaty's appeal rejected THE HIGH Administrative Court endorsed on Tuesday a June ruling that New Urban Communities Authority (NUCA), a body of the Ministry of Housing, broke the law when it sold land for the Madinaty project to the Talaat Mustafa Group (TMG), rejecting appeals by both NUCA and TMG. In June, the court said that the 8,300 feddans plot should have been put up for public auction and not directly allocated to the group. The new ruling came a month after Egypt's prosecutor-general dropped a separate investigation filed by parliament members accusing NUCA of wasting state money when it sold the land for the Madinaty project. While the company's shares dipped by seven per cent on Tuesday as soon as the ruling was announced, TMG's Chief Financial Officer Jihad Sawaftah told Reuters the ruling "will not cause any harm to [land] holders in the project, and their rights will not be touched." New specialised trade zones A 500 MILLION square metre plot of land will be put on auction for specialised trade zones next month, the Egyptian state news agency quoted the minister of trade and industry, Rachid Mohamed Rachid, as saying. The land is divided into eight zones located in six governorates, and is expected to attract about LE750 million worth of investments. The move comes as part of an effort to double the growth rate of internal trade to 12 per cent and increase investment in the sector. The bidding process, starting October and continuing through the end of November, will be open to local and foreign investors with contracts awarded in December. The ministry plans to issue a second tender by the end of the year to raise the number of such zones to 16 in governorates including Port Said, Beni Sweif, Tanta and Mansoura. Electronic customs duties RECEIPTS for customs duties paid electronically over the past 10 months reached LE2.07 billion, according to a Ministry of Finance statement. Neither the overall value of customs duties through that period, nor the value of those that were electronically paid during the corresponding period of last year were mentioned. The electronic payment of custom duties is a project that is co-managed by the Ministry of Finance and the Central Bank of Egypt, through which duties are paid electronically at branches of 18 participating banks. With an 80 per cent stake in total revenues, the Eastern Zone -- which includes ports in Suez, Port Said, Ismailia and Damietta -- contributed the most to the overall figure. The contribution of the Middle Zone, including Cairo Airport, was the smallest. However the ministry's statement noted that revenues collected there are expected to rise when the development of the airport is finalised. Compiled by Sherine Abdel-Razek
