Supporting and partnering on the AUC School of Business campaign “This is how I moved my #BusinessForward”, […]
As a partner on the AUC School of Business campaign “This is how I moved my #BusinessForward” […]
Laila Adly, a retired English teacher living in Cairo, has long ordered all her grocery needs from […]
In 2018, the African Continental Free Trade Agreement was founded, paving the way for free trade amongst 54 of the continent’s countries. This marked a new chapter for improving business and trade relations within the continent, but there remain many structural obstacles to achieving better economic integration.Egypt has been placing economic integration with the rest of the continent at top of its agenda over the past few years. Many Egyptian businesses, like El Sewedy Electric, CIB, Egypt Air, Orascom, Elevate Healthcare, Trella, Swvl and Pharco Corporation, to name a few, have launched operations across the continent, aiming at strengthening relations with Africa and exchanging expertise and know-how.At the Business Forward annual event, held on December 13, a fireside chat, ‘Unpacking Economic Integration with Africa’ featuring prominent panelists was a platform for a conversation about the topic. Moderated by Christiane Abou Lehaf, senior manager of international cooperation at AfreximBank, the chat was joined by Ahmed El Sewedy, CEO of El Sewedy Electric, Mohamed Dagnote, executive director of Nigeria-based Dansa Holdings, Tarek Moharram, CEO of Elevate Healthcare Africa, Sherine Helmy, CEO of Pharco Corporation.Is doing business in Africa any different than elsewhere?The short answer is yes, as per El Sewedy. His company, which mainly focuses on manufacturing cables and investing in infrastructure, does business across the world, from Europe to the Gulf. When attempting to penetrate the African continent, it became clear that a different approach is needed.“There are a lot of challenges to working in Africa, it’s not easy. We had to think of a different way to work there than our approach to working in Europe or the Gulf. Our biggest market after Egypt is the UK. But I only need to visit the UK once every five years, since they know what they want; they need the price and quantity and we send the product. In Africa, it’s totally different,” explained El Sewedy.“To work in Africa, you have to give a complete solution to the market needs and to be available on the ground. In most countries, we have people from a high executive level to discuss with the governments to determine their needs.”Move production to Africa or keep it in Egypt?Presiding over a pharmaceutical company that played a critical role in Egypt’s widely acclaimed and successful Hepatitis C treatment campaign, Sherine Helmy, CEO of Pharco Corporation, seeks to export the experience to other African nations.“We want to cure a million people in Africa and we will make the same system-transfer to other countries,” said Helmy, referring to the transfer of knowledge and expertise in order to undertake a similarly successful Hep C eradication campaign in the rest of the continent.“By 2033, we have to be producing in Africa, 90 percent of Africa’s pharmaceutical needs are imported, with 70 percent of them being imported from outside the continent,” explained Helmy. “So every year in the coming 10 years, we should be building a new factory, and we are planning to be doing so. With economies of scale, we can supply champagne on beers budget because with pharmaceuticals you have to have high quality product and highly efficient machinery.”However, obstacles to achieving this goal are still very much significant.“You cannot be in the middle of somewhere in Africa and you don't have spare parts or the machine is not performing well,” said Sherine, adding that his company will start establishing production facilities in certain West African locations in order to get their life-saving products to reach 200 million West Africans.Healthcare shortages in AfricaFrom pharmaceutical production to healthcare, Tarek Moharram, the CEO of Elevate Healthcare Africa, a healthcare fund that aims at exporting Egypt’s private healthcare expertise to African markets, weighed in with his experience on working within the continent.“We have seen that there are many countries that have a very high level of political maturity and stability and diverse economies, like Nigeria, Ghana, Kenya and Morocco,” said Moharram. “Despite their huge improvement, they continue to be in deep shortage when it comes to healthcare services.”To explain just how big the shortage is, Moharram said that it would need a lifetime of consistent building of healthcare facilities in order to merely ‘scratch the surface’ of filling that gap.“The gap that is there is tremendous and it’s a gap of know-how. It is not an investment gap; the capital is there and many people have an interest in those kinds of services in this kind of production. But they lack the technical know-how and they lack the appetite for getting out of their comfort zone,” he added.“It’s definitely a huge opportunity for entrepreneurs, but it’s also a mission,” explained Moharram. “The best place to be is to be both serving a humanistic mission but also extending the soft power of your country and doing great business as well.”Missed economic opportunities due to lack of integration?Joining in from Lagos, Nigeria, Mohamed Dangote, CEO of Dansa Holdings specializes in FCMGs, expressed his beliefs that fundamental issues need to be addressed in order for African economic integration to be a reality. He believes obstacles to realizing full integration trace back to colonial times.“I think if you look at how Africa was designed, it wasn't designed for us to co-exist. If you look at the colonial times that left their imprint and the infrastructure behind, it was designed for us to export,” affirmed Dangote. “And we're still exporting our natural resources until today. So in terms of the opportunities that are missed, I cannot describe how exponential they are.”If we actually sit down and do this together as an African nation, not an African colonized nation but as an African independent nation, I believe the growth can be exponential,” he said.“We want to set up the infrastructures. We want to make sure we look at our industries. We want to look at our human capital and ensure that we can co-exist. We want to look at how do we trade currencies.”“When we talk about Africa, I think one of the fundamental areas is, of course, language,” he added.
New edition of the campaign “This is how I moved my #BusinessForward” dedicated to responsible business
In late 2020, amidst lockdowns that had just started to be a new norm, Business Forward launched its first of a kind digital campaign, “This is how I moved my #BusinessForward”, in which content flew from an audience of business leaders telling the stories of how their companies navigated the pandemic year with all the unprecedented challenges that came out of it. Following short-listing, the audience voted on the most inspiring story of business resilience, and the results were announced at the end of Business Forward’s annual event of 2020.This year, we remain excited to hear how business leaders moved their business forward, this time by being more responsive and attuned to the needs of the communities they serve, while also bringing value to their business. In 2021- and probably the next few years to come- as the world talks about building back better, and as climate challenges become louder than ever, the concept of stakeholder – rather than shareholder- capitalism is gaining momentum, more enterprises are committed to Environmental and Social Governance (ESG), and consumers are gradually becoming more conscious about their choices. These are all trends that emphasize responsible business, which is the theme of this edition of “This is how I moved my #BusinessForward” campaign, that was launched during Business Forward Annual Event on December 13, 2021.Enterprises of all sizes have a lot to contribute to their different stakeholders whether they are shareholders and owners, employees, customers, suppliers and distributors, investors, governments or the wider community. Making an impact through responsible business does not necessarily need to involve a huge amount of spending and is certainly not about creating PR hypes. In many cases, it is embedded in the company’s business model and DNA and contributes to building its brand value. The campaign, receiving contributions from companies until February 15, 2022, aims to highlight the examples that support this.In this year’s edition of the campaign, Business Forward partners with two leading corporates: The Coca-Cola Company and the Commercial International Bank (CIB), both of which are pioneers in modeling impactful responsible business practices in their respective industries.Besides being Egypt’s leading private sector bank and the first institution to issue green corporate bonds in Egypt, in cooperation with the International Finance Corporation (IFC), availing finance opportunities for projects that address climate action and potentially expanding the renewable energy, energy efficiency and green building sectors, CIB has embarked in a journey to reduce its ‘Carbon Footprint’ since 2018. This year, CIB issued its pioneering ‘Ecological Footprint’, by expanding the scope to include not only carbon footprint but also the water and land footprints, as explained by Maysoun Aly, Head of E&S Management & Sustainability Systems at CIB during the launch session.Measures are adopted by the bank to reduce and monitor the land, carbon, and water emissions per employee, and the bank’s targets are expanding to include its value chains and clients by 2025. “Our monitoring shows that since 2019, emissions per employee have fallen to below the median for the banking sector and international benchmarks. CIB has successfully achieved the reduction of its Greenhouse Gas (GHG) emissions on its own operations by 10 percent in 2020 compared to the baseline year (2018),” said Aly, and continued, “Our ability to reduce the ecological footprint [of the bank], involves several elements, like green building certifications for our buildings and pursuing the EDGE certification for our new premises in the New Capital.”During her presentation at the launch session, Shereen Shahin, head of public policy and sustainability for North Africa at the Coca-Cola Company, explained how the classic definitions of the purpose of the business being solely maximizing profits have long been proven wrong. Shahin reiterated that the concepts of responsible business can be applied by small and medium-sized enterprises, not just multinationals, subscribing to the conviction that it is more the former that potentially drives economic development. She explained that at the Coca-Cola Company, creating shared value is practiced on three levels. One of those is about redesigning how the company operates so that the process brings value to as many players as possible. An example of that is bringing circularity to its production, so that 50 percent of its production is recyclable, which is likely to be reached before the 2025 target year. The second level is redefining productivity, meaning bringing in solutions to reduce resource depletion, like shifting to renewable energy or for example using plant-based bottles as Coca-Cola currently does. Cluster development was the third level Shahin mentioned, citing Silicon Valley as an example, explaining that this is the company’s approach in creating an ecosystem of suppliers and service providers around its production plants. “We rise by lifting others,” stated Shahin, “One of the great things we can do together through the campaign is sharing knowledge.”“This is how I moved my #BusinessForward” campaign, calls upon business leaders from Egypt, the Middle East and Africa to share videos or visual stories of how their enterprises are gearing towards responsible business and responding to the needs of their stakeholders and communities. The campaign ends with the audience voting on the most inspiring stories and an awards ceremony in March 2022. This campaign strives to build strong awareness and commitment to impactful responsible business through featuring real examples and storytelling by companies who will participate.Find out more about the campaign and join here.
When Egypt’s economic reform journey took off in 2016, officials focused on measures and policies that aim to stabilize macroeconomic indicators, and effectively prioritized fiscal and monetary reform policies. On the back of a rebounding tourism sector and heavy government spending on big infrastructure projects, the country’s economy made leaps forward in terms of its GDP, foreign reserves, and ability to withstand market shocks.That’s why when the COVID-19 pandemic hit, Egypt was in a substantially better situation to address the economic fallout caused by pandemic-related shutdowns and restrictions.But Egypt is not making it through the pandemic unscathed; its vital tourism sector continues to suffer heavy losses, and its external debt levels have risen to unprecedented levels as the government pursued an $8 billion loan package from the International Monetary Fund in order to maintain the stability of its economy and avoid losing the achievements of its reform program thus far.Macroeconomic reform, however, isn’t always good news for everyone. Since 2016, poverty levels increased to 29.7 percent in 2020 as per CAPMAS , due to the rise in prices of basic goods and services, including gas and electricity. Almost two years after the pandemic, Egypt now stands at a crossroad, with a pressing need to make its reform efforts more inclusive of those most economically-vulnerable, and also needs to pave the way for the private sector to claim its essential role in driving economic growth. Economic growth was largely led by consumption and public investment in infrastructure, not the private sector. How can Egypt address those critical dilemmas?On December 13, a number of prominent policymakers, business leaders, academics, and economic experts, got together to mark the fourth annual event of Business Forward AUC, aiming to answer this crucial question. The event’s keynote speaker, prolific economist, IMF executive director, and Egypt’s former investment minister, Mahmoud Mohieldin, had much to share in his pursuit to answer this question in a special session moderated by Dina Abdelfattah, interim chair of the Department of Economics at the AUC School of Business. Inflation front and center in 2022One critical issue predicted to face not just Egypt, but the world economy, in 2022 is inflation.“The talk of the day, the talk of the week, and perhaps even the talk of the next year is going to be inflation and how we are handling it,” affirmed Mohieldin. “There is a tricky balance between growth and inflation. If you’re tightening inflation fast and hard, you may compromise recovery.. You may end up compromising recovery and also not solving the problem of inflation.”Egypt, on the other hand, is projected to have its inflation levels to be within the target of its central bank for the coming year, which is 7 percent plus or minus two, explained Mohieldin. This is feasible due to the fiscal balance that has been improving since the reform journey took off in 2016. In order to maintain this upward swing and keep inflation within target, it is important to maintain ‘control of budget deficit, maintaining primary surplus, improving the capacity of the tax department and public revenue, and enhancing growth.’
Inflation in Egypt in 2022 projected to be within targetEconomic growth in Egypt for 2022 is projected to reach 5.4%, which follows Egypt’s ability to be one of a handful of countries to achieve positive growth in 2020. “Egypt was among the very, very few countries that managed to have positive growth last year and continue to do so this year,” said Mohieldin. “For the current fiscal year, Egypt’s growth is projected to be 5.4%.”Investments and GDPThough Egypt had become over the last few years Africa’s biggest investment destination, a worrying indicator is that its total investment to GDP ratio remains relatively modest. This indicator is crucial when determining how a country’s investment levels are faring.In the 1980s, the total investments to the GDP ratio was well above 30 percent, fluctuating over the years since then, reaching a low point of below 10 percent in the years following the 2011 revolution, and recently beginning its rebounding journey, approaching 20 percent in 2020. Granted, it’s a good achievement, however, it needs to be further boosted, commented Mohieldin.
Egypt is Africa’s current biggest investment destinationOne issue he noted is how Egypt’s private sector is being crowded out by public investments in different sectors, which is seen as discouraging of private investments which are important for sustainable growth.“Investments mean public and private, not just private and not just public, and of course Foreign Direct Investments. This question here is not about crowding in or crowding out […]. The better question is, does Egypt have the adequate critical total investment as a percentage of GDP? No, not yet.”Mohieldin believes that it’s important to have a more pragmatic approach to the issue of crowding out the private sector and formulate strategies that make both kinds of investments work together rather than against each other. What’s important to consider here is what sectors are better well-suited for what type of investments. It has to be a case-by-case approach.“There is a role for public direct investment to mobilize private investment in some particular sectors,” says said Mohieldin. “The question here is sector-specific, firm-specific, location-specific. It's not really across the board.”Public investments, he argues, play an essential role in attracting private investments, particularly in ‘a period of high uncertainty like the one we have today.’Stock market and Egypt’s 2030 visionEgypt’s stock market, compared to peer and regional markets, is performing quite poorly. That may have to do with the disproportionate share of informality in Egypt’s economy. Recently, an effort to state-owned enterprises in the stock market has been announced but is yet to become a reality.“We need to be encouraging more public listing, and by public listing, I don’t mean is just more from the country’s public sector IPOs, but basically from more private sector, especially the family-owned companies with a track record,” argued Mohieldin. “I may upset some people but the issue here is that the stock market should act as a mirror of the economy, to be fully representative of it. So far, it’s not.”
Egypt’s stock market doesn’t yet mirror its economy“We have many sectors almost absent from the stock market, so we need to encourage more public listing from different areas, especially the corporatized agriculture, [the] food and [the] manufacturing sectors, especially in governorates [other than Cairo],” explained Mohieldin.Furthermore, Mohieldin believes that as far as the Egypt 2030 framework is concerned, the business sector, particularly businesses listed in the stock market, plays a very important role.“Businesses and stock markets don’t work based on history but on the present with a forward-looking approach,” said Mohieldin. “So we really need to encourage more listings, and also need to see substantive incentives for businesses to do that, beyond tax incentives.”Speaking of Sustainable Development Goals and Egypt’s 2030 vision, the biggest potential milestone in reaching those goals could be the project of Hayah Karima.Localization of SDGs – Hayah Karima One of the most significant public investment projects announced by the Egyptian administration in recent years is the ‘Hayah Karima’ (Decent Life) project, a megaproject that aims at drastically improving quality of life in Egypt’s poorer villages, with its total beneficiaries being 55 million Egyptians – more than half of Egypt’s population.“My biggest bet for being optimistic is the most important project being undertaken in Egypt, Hayah Karima,” said Mohieldin. “I know our country has had many initiatives to invest in infrastructure, health, new cities and dealing with slums. But this one project is really the hope for Egypt.”More than just a poverty alleviating project, Hayah Karima is going to be instrumental in improving Egypt’s business environment and making way for a new generation of self-made entrepreneurs.“When you do these kinds of investments affecting 60 percent of the population in 20 governorates, just imagine the dynamics of such investments. You’ll be unleashing huge potential. How many Mahmoud Elaraby can come out from this? How many people will benefit from such huge investments? In the short, these investments will accelerate our achievement of the 2030 agenda, but in the long term, it will be going to be helping generations of Egyptians with creativity and mentoring that they desperately need .”Stay tuned to more exclusive coverage from the Business Forward annual event…
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