Egypt: Fuel subsidies to be reduced

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EGYPT

Fuel subsidies to be reduced

Egypt planned to cut petroleum product subsidies in the next fiscal year but still expected the budget deficit to widen, the government said yesterday as voters went to the polls to elect a new president. The finance ministry predicted economic growth of 3.2 percent – up from an estimated 2 percent to 2.5 percent this year – and a fiscal gap of 12 percent of economic output in a final budget draft submitted to interim President Adly Mansour. Egypt’s economy has been struggling since a mass uprising ousted autocrat Hosni Mubarak in early 2011, with the deficit reaching 14 percent of gross domestic product (GDP) last year. Prior to Mubarak’s removal, GDP growth was running at above 5 percent. It has been boosted by Gulf aid this year in the form of grants, loans and petroleum products, after the army – prompted by mass protests – ousted the country’s first democratically elected president, Mohamed Mursi, in July last year. – Reuters

NIGER

Uranium prices freeze project

French nuclear group Areva would suspend plans to develop the giant Imouraren mine until uranium prices improved, according to the terms of a deal to renew its production agreement in Niger, mining ministry sources said yesterday. The deal, expected to be signed yesterday in Niamey, will for the first time place Areva’s existing Cominak and Somair mines under a 2006 mining law, which reduces tax breaks and increases royalty payments to as high as 12 percent. The Imouraren mine, which would double Niger’s output of nuclear fuel, had been scheduled to start production at the end of next year after a series of delays linked to security concerns in northern Niger. Under the new deal, Areva will also pay Niger e90 million (R1.3 billion) to rebuild the road to the Arlit mines. – Reuters

KENYA

Equity plans mobile banking

Equity Bank of Kenya planned to launch a mobile telecoms service in July, eyeing a piece of the fast-growing cellphone-based financial services market, it said yesterday. Kenya has led the world in mobile money, with the M-Pesa platform of its largest telecoms operator Safaricom offering banks a cheap and easy way to reach the large number of people without access to formal financial services. Chief executive James Mwangi said Equity Bank had teamed up with the nation’s second-largest telecoms firm, the local arm of Bharti Airtel, to roll out its new service. – Reuters

KENYA

Central bank backs shilling

Kenya’s central bank held adequate foreign exchange reserves to cushion the shilling against temporary shocks that left the local currency trading at two-and-a-half year lows late last week, the bank’s governor said yesterday. Governor Njuguna Ndung’u blamed seasonal factors, including the payment of corporate dividends to foreign shareholders, for the volatility and said he expected the situation to “normalise”. Traders, however, attribute the currency’s steady weakening to bombings in Nairobi and on the coast that have shaken market confidence. – Reuters


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