Joining me right now is Ahmed Khattab, economic expert and member of the Egyptian Canadian Business Council.
Thank you very much for being with us, Mr.
Ahmed.
Thank you.
It's my pleasure to be with you.
Now Egypt has just secured a staff level agreement on the 7th IMF review, and the president has just unveiled what's being described as a post-IMF economic program.
But in plain terms, what changes for a business operating in Egypt the day the IMF program ends?
Yes, first of all, let me, by the name of all Egyptians, send the bishop, thank you.
To avince Sisi for the great effort to relate it to the Egyptian economy and also thanks to the Prime Minister and all the cabinet working together to improve the economy of Egypt.
Egypt's economy today is in a very strong position, especially, especially after internationally military fund, a new, new, new appraisal to Egypt, as Egypt is a good country economically and Egypt is 100% strong.
International Monetary Fund make a review of Egypt's budget after economic reform takes place and say that all positive send a positive indicator about the Egyptian economy and also International Monetary Fund and Fiji and the Standard War.
All these international association send a very positive and strong signal about the Egyptian economy.
The Egyptian economy there now will reach more than 50 million.
US dollars and this is a very secure reserve in US dollars, especially in this day because we face some instability in the gates to the war between Iran and the USA, but till now Egypt's economy is still 100% and all the economic for economic reform process take place and Egypt will go in the right direction, especially at the end of 2026.
Mr.
Ahmed, you have explained the pound's recent strength by pointing to record reserves and better dollar liquidity, but a strong pound cuts both ways, as we know.
At what point does it start hurting Egyptian exporters and tourism competitiveness?
Yes, first of all, all the tourist sector and export volume increase day by day.
So Egypt today, especially after we're launching the new ground museum, our visitors from tourism increases from 13 million per year to 15 million, and this has also increased the return of the tourist sector.
The tourist sector in Egypt is a hub, especially in the summer.
We already, already.
100% to accept more Arab investors and foreign investors, especially on the north coast and in winter we accept more and more investors in the tourist sector in Sharm El Sheikh and in Gaza and and and also in Giza, especially the pyramids and new Egyptian Museum.
At the same time, Egypt and all the government cabinet also focus on increase the volume of exports because once we increase the volume and the size of export, the return Dollars and return in the euro will increase, and this is also a very essential point.
Also, Egyptians working abroad transfer to Egypt increase year by year, and this is also a huge amount of dollars, more than $30 billion per year, and this is a year by year increase.
Also Egypt try all the time to make a strategic and bilateral strategic and The economic agreement with the key countries in the world like China, like Canada, like USA, like South Africa, and all these countries working together, especially in West Canal corridor and the US West Canal area in order to facilitate the export of raw materials of finished goods and services not only from Egypt but also from Africa.
Egypt plays a very effective role.
Egypt will be the main gate.
For all African products to export to Europe and to China, especially Egypt as a member in COMESA and at the same time member in BRICS, this will facilitate the export of product, especially finished product from all African countries to all China and Brazil and all the key countries.
BRICS and Russia and Belarus at the same time, and we already open a market with Europe, especially after we have a rural agreement with Italy.
All fresh products also exported during only 1 or 2 days to Italy and to export it from Italy to all Europe by train during 1 or 2.
Let's move on to talk about interest rates because maybe you have been one of the most vocal advocates for rate cuts.
You've called for at least 100 basis points.
If the central bank keeps rates where they are right now, what's the real cost to private investment over the next 12 months in your opinion?
Yes, the private sector in Egypt needs to reduce the interest rate in order to invest more and more, but the central bank at the same time try to make control of the inflation rate because once one key element of the central bank in order to control inflation rate to increase interest, why the central bank in Egypt under the leadership of Dr.
Hassan Abdullah tried to increase the interest by 1% in order to to present.
A good interest to all the Egyptian men to put to make a down payment of all the reserve money in the Egyptian bank or even it's a governmental bank or a private sector bank, and increase in interest and interest will encourage people to save money in the bank.
At the same time, the SMEs and the private sector will complain because once you borrow money.
To make a lot of investment in industries, especially or real estate or in the field of SMEs, it will find a high cost borrowing from the bank.
But I think till now we have a profitability, especially in real estate, file more than the interest rate paid by the bank, to the bank.
So the interest rate of the borrowing company and the bit of real estate matching with the price of finished real estate or finished.
Apartment, but in the field of the industrial sector will compete the Chinese industrial sector and will compete all Arab countries in the area like Saudi Arabia and the Arab Emirates like Turkey.
So the main challenge is still for the SMEs and the private sector to invest more and more in the field of industry, but in the field of real estate, it's covered the cost of the interest rate of the bank and Already again, but I think the government tried all time to make an initiative, especially SMEs, by a very low interest rate to SMEs project and also industry sector, but it depends on the support taken by the central bank and all the governmental banks like F and National Bank of Egypt.
So I hope the SMEs project will take more support from the governments in order to be able to compete locally and internationally.
Uh, so let's turn our attention right now to, uh, one of the main foreign currency income channels for Egypt right now right now, the Suez Canal, and we know Maersk and Hapa Lloyd are testing a return to the Suez Canal while tensions flare in the Hormuz.
You've estimated canal revenues could return to around $14 billion.
How fragile is that number?
Suez Canal Suez Canal corridor and Suez Canal area face some challenge, especially the instability related to Iran and USA and Israel war.
But I think as the government tried all time to make, to invest more and more in the area in order to be rid of 100%, to accept more profit after the after the war between Iran and Israel and America's top 100% till now we find a lot of. from the TV watching President Trump every day.
He will sometimes stop war.
Sometimes we have some instability, but I hope once we stop 100% between Iran and America, the Swiss Canal return and earnings will go to the estimated profit.
We estimate the profit of the Swiss Canal corridor to more than $15 billion per year as we planned before in 24, 25.
And 24 to 25 to about 2026 face some challenges to reduce the income of the Suez Canal corridor by 50% due to instability, but I hope the international community make up pressure against Iran and stopboard and open the Horz Strait 100%.
Once the Hormuz Strait opened 100%, all ships and all the return of Suez Canal will go back to the normal plan, to 14 billion per year at least.
OK, finally, uh, from your seat at the Egyptian Canadian Business Council, we know Canada has just signed a nearly $300 million rail deal with Egypt, but what's the next sector where Canadian capital realistically follows?
I'm I'm, by the way, working with Canada for more than 10 years, especially I'm a member of the Egyptian-Canadian Council, and the trade between Canada and Egypt increases year by year, especially in the world of mining, in the field of logistics, in the field of industry, in the field of information technology, in the field of education, in the field of healthcare, because Canada most advanced in the field of healthcare and education, and also electricity.
And also in the field of railway, Canada is more advanced in this way, especially the trains and the railway stations.
I hope more foreign direct investment for Canada to Egypt, and I hope the Egyptian cabinet working with Canada by more than investments, $300 million not enough for Egypt and Canada as a volume of debt.
By the way, the volume of debt between Egypt and Canada.
More than 1 billion per year, but we hope to increase this volume to more than 2 billion, not only 1 billion, because Canada indeed have a strategic partnership and the wonderful relationship between the presidency and the leader of Canada is also will lead to more progress in this field of export and import and in the field of industry we have.
A lot of.
We want to Kuwait together and the world of mining.
Canada most advanced in the gold mining, especially and a lot of leader Canada companies want to invest in mining and need the gold.
I hope the government and also Minister Bahawa, Minister of Foreign Affairs, working in the file of increasing the volume of trade between.
And Canada because Canada is the most advanced country and the relationship between the two countries is wonderful and also the businessmen from Canada and businessmen from Egypt working together in order to increase the volume and size of trade because Canada is most advanced in industries, especially IT and the, and this is also a promising future to the Egyptian economy.
Dramaov, thank you very much for joining us today.
My pleasure.
