Despite relatively low banking and insurance penetration and capital markets participation, the stability and liquidity of Egypt’s financial institutions has supported measures taken to successfully navigate the Covid-19 pandemic. In the recovery phase, Egypt’s strategy to move towards a cashless economy and boost financial inclusion through digitalisation and financial technology (fintech) adoption…
On fuelling economic growth in Africa through insurance penetration In what ways did the Covid-19 pandemic impact the insurance sector in Africa? FARID CHEDID: Government measures to reduce the spread of Covid-19 such as national lockdowns have translated into slow economic growth, and in some cases recession. The performance of the insurance sector is traditionally closely linked to that of the…
In the past several years Egypt carried out an IMF-backed reform programme to address the country’s fiscal position and improve the business and investment environment. These changes helped position Egypt to respond effectively to the challenges of the Covid-19 pandemic, balancing the need to mitigate the spread of the virus with preserving the economic activity necessary to the livelihoods of…
The pandemic has created an urgent need for more patient capital in Africa. With governments across the continent facing budgetary constraints while recognising the importance of investment in essential infrastructure and services, private equity (PE) and venture capital (VC) offer an attractive avenue for financial support. Covid-19 has also accelerated digitalisation in key African markets, which…
While the coronavirus pandemic has had a negative impact on Egypt’s insurance sector, the continued rollout of universal health coverage, alongside targeted expansion in particular segments, could provide potential for future growth. The difficult economic environment caused by Covid-19 has led to a reduction in demand for insurance throughout the country, which had low penetration levels even…
Egypt’s non-banking financial services (NBFS) segment is widely seen as underpenetrated, and it is thus expected to witness considerable growth throughout the coming five-year period to 2025, due to Egypt’s favourable demographics. Support efforts from the Egyptian government, the Financial Regulatory Authority (FRA) and the Central Bank of Egypt (CBE) will help drive this growth and manage…
Short selling, by which investors borrow and sell shares to seek a margin on declining prices, has been on the development agenda of the Egyptian Exchange (EGX) for some time. The ability to short a stock brings a number of advantages for investors, which exchanges seeking to increase trading volumes are usually eager to highlight. Investors and portfolio managers frequently use the tool as…
Higher interest rates following the flotation of the Egyptian pound in 2016 made it costly for businesses and individuals to obtain funding from Egyptian banks. The depreciation of the currency also raised input costs for businesses and reduced their ability to expand operations, thereby reducing demand for funding to cover capital expenditure. Banks, meanwhile, found it easier to lend to the…
Egypt’s sizeable informal economy represents a significant challenge for the government. With between 40% and 60% of economic activity taking place out of sight of the Ministry of Finance, the government’s economic reform agenda faces a number of obstacles. Informal employment is generally characterised by low-wage, low-skill activity with limited potential for the kind of productivity increases…
