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Egypt Reaffirms Economic Reforms, Boosting Private Sector Role

Egyptian Finance Minister Mohamed Maait meets with Ivanna Vladkova Hollar, the IMF’s Mission Chief for Egypt (Asharq Al-Awsat)
Egyptian Finance Minister Mohamed Maait meets with Ivanna Vladkova Hollar, the IMF’s Mission Chief for Egypt (Asharq Al-Awsat)
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Egypt Reaffirms Economic Reforms, Boosting Private Sector Role

Egyptian Finance Minister Mohamed Maait meets with Ivanna Vladkova Hollar, the IMF’s Mission Chief for Egypt (Asharq Al-Awsat)
Egyptian Finance Minister Mohamed Maait meets with Ivanna Vladkova Hollar, the IMF’s Mission Chief for Egypt (Asharq Al-Awsat)

Egyptian Finance Minister Mohamed Maait has assured the International Monetary Fund (IMF) that Egypt is sticking to reforms to boost the private sector’s role in the economy.

Maait stated on Saturday that Egypt is working to attract more local and foreign investments, with the country's economy showing signs of improvement after recent reform efforts.

The finance minister had met with Ivanna Vladkova Hollar, the IMF’s Mission Chief for Egypt, on the sidelines of the IMF and World Bank Spring Meetings. The discussions focused on strengthening cooperation within the framework of Egypt's IMF-backed economic reform program.

Maait highlighted Egypt's improving economic situation following the implementation of comprehensive reforms.

He pointed to positive indicators over the past nine months, including an initial budget surplus of EGP416 billion (approximately $8.62 billion) – a stark contrast to the EGP50 billion (around $1.04 billion) surplus recorded in the same period last year. This represents an annual growth rate exceeding 8.5 times.

Despite facing challenges from global crises and rising interest rates, Egypt maintained stability in its total budget deficit, keeping it at 5.42% of GDP compared to 5.40% the previous year.

Maait emphasized that the government is focused on implementing fiscal policies to stimulate investment, production, exports, and economic stability.

These efforts aim to restore the national economy while maintaining financial discipline and reducing budget deficits and debt-to-GDP ratios to relieve pressure on public finances and build financial reserves.

Rania Al-Mashat, Egypt’s Minister of International Cooperation and Governor at the World Bank Group, acknowledged the widespread impact of global challenges, including the COVID-19 pandemic, geopolitical tensions, supply chain disruptions, and rising prices.

These factors have disproportionately affected developing and emerging economies, leading to capital flight and declining foreign direct investment.

Al-Mashat highlighted Egypt’s extensive development financing portfolio, currently valued at approximately $26 billion.

Over the past four years (2020-2023), the country secured $37 billion in financing from development partners, with $10.3 billion specifically directed towards the private sector.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.