00:00 I'm here with the Egyptian Finance Minister for Finance Policy, Mr. Ahmed Koujouk.
00:04 Welcome to CNBC Arabia.
00:06 Welcome. It's an honor to be here in the capital of the Egyptian economy
00:10 and to be part of this event where we announce the details of the annual conference.
00:15 As I was saying, the Asian Bank and the US Bank of Finance have a vision
00:20 to invest more in Africa and Egypt in general.
00:24 Are there any specific projects that the state is studying to present to the bank?
00:29 There are projects, and we have about 1.3 billion dollars worth of them,
00:38 in the Egyptian bank, in a number of different projects.
00:42 What's interesting is that 25-30% of these projects are for private sector financing.
00:47 This is very important for us because a lot of the green projects,
00:53 such as construction and sustainable development projects, are for private sector financing.
00:59 There are currently 4-5 projects in the pipeline,
01:07 half of which are for private sector financing and the other half for state projects.
01:12 A lot of them are related to the green economy,
01:18 and they are related to transportation and energy.
01:24 How does the Asian Bank support the investment of Egypt's plans to issue
01:28 the China's billion-dollar bonds?
01:31 The Asian Bank is the latest international institution that was established.
01:37 In a short time, the number of countries that are included,
01:43 and today there are 106 countries, represent 80% of the world's population
01:48 and more than 70% of the global economy,
01:51 so most of the major countries are members of the Asian Bank.
01:55 The Asian Bank has a large financial area,
02:00 and it doesn't have the problem of other institutions that have limited or
02:04 on the contrary, have a huge financial capacity.
02:08 This is a good opportunity for the Asian Bank to expand its ideas.
02:13 One of the ideas that we have proposed, and the Asian Bank is even doing politics
02:17 in this regard, is the idea of guarantees for developing countries
02:20 to finance a lot of other priorities at a low cost.
02:26 To give guarantees for bonds or issuing bonds.
02:29 Exactly, and the Asian Bank has responded very well and started to work on this matter.
02:34 We are very advanced in this process, so that it can be a start for many countries.
02:40 The idea is that the Asian Bank does not talk about a deal or the idea of financing a country.
02:48 It talks about the idea of financing all the member states of the present and future.
02:54 Egypt has a plan to collect more foreign funds
02:59 until the end of the financial year.
03:03 What is the value of these funds and the sources obtained from them,
03:07 if we consider that there are two proposals for the bonds,
03:10 the bond that you talked about and the Samurai or the Japanese Libyan bonds?
03:13 I thank you for the question, because I would like to first explain some things to you,
03:19 and of course, I would like to explain some things to all the viewers.
03:24 First, Egypt is a member state of many international institutions,
03:28 and there is a permanent reserve of funds available to the Egyptian state
03:33 according to the size of the economy of each state.
03:35 This reserve is directed between the private sector and the state and its various institutions.
03:40 This gives us a space every year for some of the funds that are absent from these institutions.
03:46 We are members of many institutions, the African Development Bank, the Islamic Development Bank,
03:51 the International Bank, the Monetary Fund, the International Funds Institute, and many others.
03:57 This is a dimension that we want to keep in mind, because it also gives us a good financial space.
04:01 We are distributing this reserve, which is worth 3 to 4 billion dollars,
04:06 we distribute it every year in the light of the state priorities and in the light of what is available.
04:11 But I want to say something else that is very important.
04:13 You may have noticed that one of our methods of dealing with global challenges is the issue of diversity.
04:20 You mentioned earlier the issue of Samurai and the like, and this is a diversity in markets,
04:27 in new investors in different places, and even in the currency chain.
04:32 But we also have a diversity, if you notice, recently we became an active member of the new development bank,
04:38 which is the bank that BRICS established a while ago, and we even entered the bank before the final adoption of us as BRICS.
04:45 This gives us annual funding, and the Egyptian reserve may have around half a billion dollars a year available to Egypt for funding projects.
04:53 I have to ask you, does Egypt have the intention of actually receiving funding from the new development bank?
04:58 And as you say, 500 million dollars annually is available to Egypt?
05:02 Of course, we entered the bank to be an active member and to be a part of it,
05:06 and also to benefit from it, we are a member state and we have a very good share in this bank.
05:11 Did we ask for this funding?
05:13 No, we did not, as I told you, this is the funding that is available to us according to our feelings,
05:16 and we can work with it, and these are projects that are suitable for the bank,
05:21 and they are its assets, but this is the reserve that is available to us in this regard.
05:24 However, I am talking about a more comprehensive context than the idea of numbers,
05:28 I am talking about the context of diversity.
05:31 In the same way, in the past few months and last year, we joined two very important institutions,
05:38 the African Financial Corporation, the African Trade Corporation,
05:45 and these are two very important institutions,
05:47 they have a very strong presence in the African economy and they have a very large scope of funding for the government and the private sector.
05:54 We are currently working with them on some of the funding that may be related to the support of the balance sheet,
05:58 or even the support of the partnership projects with the private sector,
06:03 and even some other projects for the private sector and the banking sector.
06:06 I would like to ask you about the funding program, because it represents another branch of the funding sources.
06:10 Indeed, the first phase of this program has been implemented,
06:13 and the second phase, we saw a few days ago, is a part of the Eastern Company.
06:18 The next steps, because it is clear that the targets have become more clear,
06:23 whether in terms of the value, we are talking about 5 billion dollars for the next period,
06:26 or the percentages of the companies that will be funded.
06:29 I completely agree with your analysis, and I would like to add a few points.
06:34 First, we do not only have, as you will say, implementation,
06:39 we have a document called the State Investment Document,
06:41 which has put in place general guidelines for the establishment of the private sector,
06:44 and for the support, and the increase of its role, contributions and activities.
06:48 One of these guidelines is the introduction of grants,
06:51 there are other guidelines on the subject of grants and some activities,
06:54 there are other guidelines for attracting private investments to specific sectors.
06:58 All of this, in the end, resonates in the same direction.
07:01 But let's go back to what you said, this document,
07:04 and the document that we have been issuing for days,
07:08 which is remote, because we promised that this document,
07:11 will of course require us to issue annual documents to say what has been done,
07:16 and what we are targeting.
07:18 In this document, it said, it specified a number of principles
07:21 that were agreed upon to work on getting out of it.
07:24 Today, there is a new dimension, that we have been assisted with by the IFC,
07:28 the International Funding Institute, which is affiliated with the International Bank of Agriculture,
07:31 which is responsible for the private sector, and for the establishment of the private sector in the International Bank,
07:35 and is the international advisor to the Egyptian government in this regard.
07:39 And the fact is that it is playing a very important role now,
07:41 in giving us a well-known art project,
07:44 and what we can start with, and what we can use as investment banks,
07:49 and other things that will hopefully give a real boost to this file.
07:54 The issue of the telephone lines in Vodafone, and this is a subject that has aroused a lot of debate.
08:00 Is the telephone line in Vodafone a place for investors to make a bid,
08:05 and are there negotiations in effect, or is it just that it hasn't even reached the negotiation stage?
08:11 I believe that as soon as there is information on this matter, it will be made public.
08:15 But we are committed to the extent to which the document and the state plan have been laid out.
08:20 But we are generally open to a certain deal.
08:26 The idea of hiring an international expert and an international institution is its idea.
08:30 Because we are, by the way, one of the things that you will find in the coming period,
08:34 with the proposals and the exit programs,
08:37 also reforms in these sectors, reforms that are important to attract more foreign and local investments.
08:44 The whole idea is to work on a sector, not on a deal,
08:48 but on a sector that will give the private sector a great opportunity to compete in this field.
08:55 Finally, the increase in the expenditure of the expenditure of interest will affect the targets of the Ministry of Finance
09:01 in relation to the lack of balance. Will the lack of balance increase significantly due to the increase in the expenditure of interest?
09:06 Let me tell you two things about this matter.
09:08 Of course, when you ask me this question, you should know that this is not a matter that will help us.
09:13 It is not a matter of money, that the expenditure of interest will increase,
09:18 but it is necessary to deal with a large economic challenge.
09:21 And of course, we all know that this matter leads to great obstacles.
09:24 Last year, we were exposed to this matter, and we closed the year with the same initial interest rates
09:30 and the same interest rates, but the total deficit was 6% or 6.1% of the local interest.
09:35 Was this a simple matter? No.
09:37 We went and made additional investments, and maybe the interest rates increased,
09:40 but we reduced some of the other expenses and dealt with the initial interest.
09:44 So, we take our targets seriously and we deal with them seriously.
09:50 However, I cannot tell you that the challenges are more difficult than your abilities,
09:55 but what I can tell you is that our secondary targets, which were initially 2.5%,
10:01 and now are 6.4%, are targets that we take seriously,
10:07 and God willing, we will continue to fight and defend our borders like the skies of the past.
