1. I NVESTING IN A REVOLVING E GYPT Angus Blair 10 February 2016

2. Egyptian Population Source: International Monetary Fund and CAPMAS  2.8% pa growth  Extra 35 million in only 15 years / Repercussions / Planning

3. Real GDP (growth) Source: International Monetary Fund  Insufficient economic growth  Need to take economic growth to 8% p/a

4. Foreign Exchange Reserves Source: International Monetary Fund Source: Central Bank of Egypt  Capital controls  Import restrictions & tariffs / Managing the reserves

5. Trade & Current Account Balances Source: Central Bank of Egypt, Egyptian Ministry of Finance  Need to reset policy  Need for foreign currency / exports

6. Food Imports & Exports Source: Central Bank of Egypt  Agriculture / Reform & land & water use

7. Oil Trade Source: Central Bank of Egypt  Exports falling & hurting trade balance  Saudi Arabia hydrocarbon support  Increased investment in the sector

8. Budget Deficit Source: Egyptian Ministry of Finance  Goal for reduction / Civil Service Law  Subsidies

9. Subsidies Source: Central Bank of Egypt  Oil & wheat subsidies falling, but others rising

10. Tourist Arrivals Source: Central Bank of Egypt, Bloomberg  Resumption to Sharm El Sheikh soon, but hit to foreign currency earnings

11. Grants to Egypt Source: Egyptian Ministry of Finance  Help from GCC has helped in the interim  New aid will be limited

12. Suez Canal Revenues Source: Suez Canal Authority Website  Concurrent indicator of global trade  Suez Canal zone will add significant value

13. Inflation Source: International Monetary Fund  Domestic rate of inflation – higher than global norm  Domestic inefficiencies

14. Banks Source: Central Bank of Egypt  Strong deposit growth  Banks & financial system in a solid position  Low private debt

15. PMI Business Sentiment Source: Bloomberg  Lack of foreign currency is hurting

16. Water Availability Source: IMF, CAPMAS  High water stress, but major opportunities for desalination & waste water investment

17. » Population growth is too high and has major economic & political repercussions » Economic growth remains too low for the population growth » The foreign exchange reserves remain under pressure » The trade deficit is unsustainable » The Government budget remains too high » The rate of inflation is high and hurts the poorest the most Stresses

18. » The informal sector and cash economy » There are very low levels of household and private sector debt » The banking sector is in very good shape » The consumer sector remains solid » FDI has remained resilient, including non-oil FDI » M&A activity continues » Infrastructure requirements: Suez Canal zone / Transport / Housing / Water / Electricity The Quiet Strengths

19. » Sinai / Libya » The region is pulling on Egypt to do more, elsewhere » Fragmentation /differing demands from different constituencies » Limits on expression » The young » The parliament will be noisy & ask questions » Looking out Politics

21. Noel Brehony 29 June 2015 Please contact us for full details on: » Consultancy services » Ask Our Experts » 14 publications For more information, contact info@menas.co.uk 31 Southampton Row London WC1B 5HJ United Kingdom www.menas.co.uk +44 (0)20 3585 1401