Egypt’s Economic Growth Drops 3.1% in 20/21

People shop at Al-Ataba market in Cairo, Egypt (File photo: Reuters)
People shop at Al-Ataba market in Cairo, Egypt (File photo: Reuters)
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Egypt’s Economic Growth Drops 3.1% in 20/21

People shop at Al-Ataba market in Cairo, Egypt (File photo: Reuters)
People shop at Al-Ataba market in Cairo, Egypt (File photo: Reuters)

Egypt’s economic growth will slow to 3.1 percent in the fiscal year 2020/2021 that began this month due to the coronavirus pandemic down from 3.5 percent forecast, a Reuters poll showed on Tuesday.

Egypt’s economy saw a boost during the last three years by a surge in tourism, strong remittances from workers abroad and recently discovered natural gas fields.

However, since the coronavirus outbreak, tourism has collapsed and the price of gas has plummeted. In addition, the worker remittances have come under threat with the decline of oil revenues in Gulf Arab states, where many Egyptians are employed.

The government was expecting growth of 3.5 percent in the FY 20/21, which began in July, but growth could slow to 2 percent if the coronavirus crisis continues until the end of the year, said Planning Minister Hala al-Saeed in May.

The poll was conducted between July 7-20, and predicted Egypt’s gross domestic product (GDP) would recover in 2021/2022 to a 5-percent growth.

The International Monetary Fund (IMF) expected the Egyptian economy to grow by 5.9 percent in 2020, and the government imposed severe reforms, including a sharp devaluation of the currency, significant cuts in energy subsidies and implementation of value-added tax.

Many of the approximately 100 million Egyptians would face difficulties in providing necessities of life.

HC Securities’ research team indicated that Egypt’s GDP in the first half of 2020/21 is expected to be negatively affected by the COVID-19 outbreak in Egypt with tourism, private investment and consumption being the main components negatively affected.

“As we go into FY 21/22, we expect this negative effect to fade out and the economy to start capitalizing on the 2016-2019 economic reform,” they added.

The economists, polled by Reuters, expected Egypt’s annual urban consumer price inflation to slow to 7.0 percent in 20/21, down from 7.5 percent expected in the previous poll.

They also predicted inflation would remain unchanged at 7.0 percent in 21/22.

Speaking to Reuters, economist at NKC African Economics, Callee Davis noted that although the economy is slowly reopening, domestic demand conditions will likely remain subdued going forward as salaries are reduced and workers are laid off amid the economic downturn.



Deputy Minister of Industry: Saudi Arabia to Establish International Frameworks for Sustainability in Mining Sector

Deputy Minister of Industry and Mineral Resources for Mining Affairs Eng. Khalid Al-Mudaifer (Photo: Turki Al-Aqili)
Deputy Minister of Industry and Mineral Resources for Mining Affairs Eng. Khalid Al-Mudaifer (Photo: Turki Al-Aqili)
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Deputy Minister of Industry: Saudi Arabia to Establish International Frameworks for Sustainability in Mining Sector

Deputy Minister of Industry and Mineral Resources for Mining Affairs Eng. Khalid Al-Mudaifer (Photo: Turki Al-Aqili)
Deputy Minister of Industry and Mineral Resources for Mining Affairs Eng. Khalid Al-Mudaifer (Photo: Turki Al-Aqili)

Saudi Deputy Minister of Industry and Mineral Resources for Mining Affairs Eng. Khalid Al-Mudaifer revealed that spending on exploration in Saudi Arabia’s mining sector has seen a significant rise, increasing from approximately SAR 100 million ($26.6 million) in 2018 to over SAR 500 million ($133.3 million) annually.

Al-Mudaifer stated that these funds are being invested in local service companies, including drilling and laboratory services, as well as employing Saudi and international professionals.

The deputy minister made these remarks during a press conference held to unveil details of the fourth edition of the International Mining Conference, scheduled to take place in Riyadh from January 14-16.

Al-Mudaifer described the conference as a key platform for addressing challenges in the mining sector and finding practical solutions. The event will host representatives from 85 countries, including mineral producers and consumers, alongside over 50 international organizations, trade unions, and community organizations.

The conference will feature more than 75 sessions with over 250 speakers, including ministers and senior local and international officials, covering pressing topics such as project financing, promoting future mining zones, the role of minerals in community development, and the impact of technology on the sector.

Al-Mudaifer emphasized Saudi Arabia’s ambition to establish international cooperation frameworks in mining, driven by its historical significance and geographic location as a trusted energy supplier. He highlighted the need for a unified global effort to address the sector’s growing challenges, including insufficient exploration spending, which currently falls short of the level required to achieve sustainable growth.

The deputy minister noted that increased exploration investment, technological innovation, and attracting further investment are essential for overcoming these challenges. Despite these obstacles, he remains optimistic, citing the rising global demand for minerals as a significant economic growth driver.

Saudi Arabia is experiencing significant opportunities in mining, particularly in exploration. Al-Mudaifer pointed out that new mineralized zones, covering areas between 2,000 and 4,000 square kilometers, have been announced for 2024—a tenfold increase compared to 2023.

Previously, only 1,000 square kilometers were allocated annually for exploration, but this year, approximately 10,000 square kilometers were offered, he remarked. Several major international companies have entered the latest investment competitions, committing to exploration spending, employing young Saudi geologists, and supporting local communities near exploration sites.

Investments and Regulatory Advancements

According to Al-Mudaifer, Saudi Arabia has seen substantial investments in the mining and minerals sectors, particularly in iron, aluminum, electric vehicle batteries, copper, and chemicals. Current investments exceed SAR 120 billion ($32 billion) and are projected to reach SAR 300 billion ($80 billion) by 2035.

He also noted that the Kingdom, is one of the fastest-advancing countries in developing mining regulations and infrastructure. This progress is attributed to the comprehensive strategies under Saudi Vision 2030, which seek to position the Kingdom as a global leader in all sectors, with a strong focus on sustainability.

Aramco Fields

Al-Mudaifer disclosed that Saudi Arabia successfully extracted lithium from brine samples in Aramco’s fields and is planning to launch a commercial pilot program for direct lithium extraction soon. The project will be led by Lithium Infinity (LihyTech), a startup from King Abdullah University of Science and Technology, in collaboration with Aramco and the Saudi Arabian Mining Company (Ma’aden).

Sustainable Development

Ali Al-Mutairi, General Supervisor of the International Mining Conference, stated that inclusivity will be a cornerstone of the event, which aims to bring together all stakeholders in the global mining industry, including governments, international policy-making organizations, NGOs, and investors with the financial capacity to support major projects.

One of the primary goals of the sector, he added, is to foster community development, aligning with the focus of rights of organizations on environmental sustainability and talent development to create job opportunities and promote sustainable growth.

Global Networks

The upcoming conference will spotlight G20 nations and other resource-rich countries, drawing participation from 85 nations and various organizations, including UN-affiliated ones.

A notable new event on the conference’s sidelines will be a meeting of global centers of excellence and technology to establish a regional and international network aimed at building human capacity, accelerating the adoption of advanced technologies, and transferring expertise from developed to less-developed countries.

The conference will also introduce the Investment Pathway, a two-day program designed to address one of the mining industry’s critical challenges: financing, particularly for early-stage exploration projects.

Knowledge Exchange

The accompanying three-day exhibition will focus on modern mining technologies, Al-Mutairi said, adding that it will feature national pavilions from leading mineral-producing countries, including Australia, Canada, Brazil, and India, fostering technological and knowledge exchange.

For the first time, the conference will host a Knowledge Exchange Day, providing a dedicated platform to share the latest developments in mineral information, geology, technology, sustainability, and talent development, with the aim to enhance collaboration and expertise-sharing among global specialists.