Interest rates unchanged FOR THE SEVENTH time, the Central Bank of Egypt (CBE) Monetary Policy Committee (MPC) kept its overnight deposit rate and overnight lending rate unchanged at 8.25 per cent and 9.75 per cent, respectively. The discount rate was also kept unchanged at 8.5 per cent. The decision was announced last Thursday. The MPC meets every six weeks. According to a CBE press release, this decision was taken based on the MPC's assessment that "inflationary pressures remain subdued and that the current level of policy interest rate is appropriate and supportive of the economic recovery while consistent with maintaining core inflation within the CBE's comfort zone in the medium-term." The press release had said that annual headline consumer price index (CPI) reached 10.66 per cent in June compared to 10.59 per cent in May, "which continues to be elevated, reflecting the impact of last year's unfavourable shock related to fruits and vegetables." Annual core CPI remains almost unchanged at 6.70 per cent in June. The press release also pointed out that annual real GDP growth was recorded at 5.8 per cent in the third quarter of 2009/10 compared to the four-year low of 4.1 per cent witnessed in the second quarter of 2008/09, "reflecting a steady improvement in economic activity". On a similar note, Egypt's minister of economic development also announced that the economy "will grow by 6.5 pct in 2010/ 11, if not more," in the fiscal year 2010/11. The CBE pointed out, however, that, "unfolding global economic developments have created uncertainty about the nascent global recovery, which could potentially weigh on domestic investment and external demand." Revenues down NON-TAX revenues fell by 20 per cent in the fiscal year (FY) 2009/10, Ministry of Finance (MF) statistics show. Although tax revenues increased by 6.2 per cent during FY 2009/10, total revenues and grants decreased by nearly five per cent during the same period to LE268.8 billion compared to LE282.5 billion during FY 2008/09, according to the MF, mainly due to the decrease in non-tax revenues. The July MF statistics referred to a significant retreat in current miscellaneous non-tax revenues that declined by 93.1 per cent to LE2.1 billion during 2009/10 compared to LE31.1 billion the previous year. Grants from foreign governments fell by 48.3 per cent to LE4 billion compared to LE7.5 billion the previous year. Meanwhile, revenues from taxes on goods and services recorded a 7.6 per cent increase to LE67.4 billion thanks to high domestic demand. And while revenues collected from taxes on corporate profits retreated by 7.5 per cent to LE61 billion, taxes on international trade grew by 9.5 per cent to LE15.4 billion during 2009/10. Queue no more BILL payments are being made easier. This week, Telecom Egypt customers can check their bills and pay fixed line quarterly bills instantly at hundreds of banks with ATM machines and over 1,000 payment points at retail outlets across Cairo and Alexandria. The service is provided by Fawry, a specialised bill payment company with an extended national network. According to Ashraf Sabry, Fawry CEO, a growing network of medium to large groceries and pharmacies are now providing the service. "By the end of this year, Fawry's network will comprise 3000 outlets, with plans to grow to 12,000 by 2012," said Sabry. In August, Credit Agricole Egypt and the Arab African International Bank will be offering Fawry services along with other four major banks, including Banque Misr, Bank of Alexandria, Banque du Caire and the National Bank of Egypt. ICT challenge THE INFORMATION and communications technology (ICT) industry has been hit hard by the global economic crisis. Margaret Adam, research director for services at International Data Corporation (IDC) Middle East, Africa and Turkey, told Al-Ahram Weekly that the crisis forced changes in ICT spending patterns, reshaping ICT user requirements, and transforming vendor business models. Adam spoke to the Weekly during the IT Managers Forum 2010, held in Cairo last Monday. Nesma Nowar attended. According to Adam, the economic crisis affected the ICT industry on the operational and technology levels. On the operational level, the crisis has resulted in the loss of job opportunities and the delay of many projects. "The crisis imposed intense pressure on every aspect of business operations, to reduce capital expenditure and lessen operating expenses," Adam said. She added that many companies have used the crisis as an opportunity to renegotiate with service providers to get additional discounts, and better payment terms and agreements. On the technology level, Adam said that after the crisis companies have accelerated the adoption of new technology trends, like virtualisation, optimisation, and consolidation. "This is a way to provide better services without having a lot of equipment." According to Adam, there was rapid maturation in ICT usage on the back of the crisis. "CEOs in the region have become more open to alternatives and became more flexible. In a lot of ways, I think this is a good thing," Adam said, pointing out that the industry lost $250 billion in 2009. Adam said that Egypt has great potential to be an effective consumer of ICT technologies, especially in the small and medium sized entity (SME) sector. "SMEs are untapped opportunities for the use of ICT technologies, as they are more open to alternatives." She added that in Egypt there is a strong drive to build wide ICT usage in all fields, and there is government support also. Adam stressed the important role that ICT could play in improving education. "The Internet can fundamentally change our world if it is applied in the right way," she said. Adam added that wide accessibility to the Internet would result in better education, highly skilled labour, and therefore would contribute to Egypt's overall economic development. "The government should play a role in ensuring the adoption of the latest ICT megatrends." Regarding ICT usage in the Middle East and Africa region, Adam believes that South Africa is the most regulated and sophisticated market. She also sees a lot of innovation in Saudi Arabia and the United Arab Emirates, in terms of investing in smart technologies.
