Today, President Abdel Fattah El-Sisi met with Chief Executive Officer of Apache Corporation, John J. Christmann. The Executive Vice President and Chief Financial Officer of the American petroleum and natural gas exploration and production company also attended the meeting, along with Minister of Petroleum and Mineral Resources, Eng. Karim Badawi.
Spokesman for the Presidency, Counselor Dr. Ahmed Fahmy, said the meeting reviewed and followed-up on Apache’s activities in Egypt. This included its plans to expand and increase the size and scope of its business, building up on the fruitful cooperation between Egypt and Apache in the fields of search and exploration as well as oil and gas production, with a view to leveraging Egypt’s resources in the energy sector.
President El-Sisi lauded the company’s successes in Egypt over the past three decades. He also valued the company’s plans to expand its operations in Egypt, in line with the highest international standards. President El-Sisi emphasized the state’s commitment to enhancing and increasing investments in the energy sectors to meet Egypt’s growing needs in this regard.
Apache’s CEO expressed appreciation for the distinguished partnership with Egypt. As one of the largest investors and producers of oil in Egypt, Mr. Christmann affirmed the company’s aspirations to boost production rates in the upcoming period, given the availability of ample opportunities for new discoveries. He also highlighted the company’s commitment to developing and employing cutting-edge technologies so as to improve energy efficiency and reduce emissions from production operations.
The meeting also discussed ways to strengthen economic cooperation between Egypt and the United States, given Mr. Christmann ‘s chairmanship of the Egyptian-U.S. Business Council and Egypt’s keenness on providing a conducive environment to attract and increase investments and to facilitate the business of the Egyptian and foreign private sectors across various fields.
Distributed by APO Group on behalf of Presidency of the Arab Republic of Egypt.
In today’s fast-changing and unpredictable world, maintaining a resilient supply chain for Maintenance, Repair, and Operations (MRO) is crucial for businesses across various sectors. The goal is not just to withstand disruptions but to adapt and thrive amidst them. Here RS South Africa (https://apo-opa.co/4c1KTyg) MD Brian Andrew shares his top 5 tips on how to approach and manage MRO supply chains to ensure resilience against future shocks.
1. Focus on Trusted Suppliers
Instead of diversifying your MRO supplier base extensively, rely on a core group of trusted suppliers that can guarantee delivery certainty. Building strong relationships with these suppliers ensures stability and reliability in your supply chain.
2. Develop a Flexible Supply Chain
When faced with pressure, it’s essential to act quickly while considering the long-term consequences. A flexible supply chain and suppliers that can adapt to changing circumstances is key. This flexibility includes being prepared for potential increases in spending or the need to switch suppliers without significant disruptions.
3. Leverage Technology and Data
Utilise eProcurement and Vendor Managed Inventory (VMI) solutions from a trusted and stable procurement partner. Effective planning requires visibility into what is being consumed, especially for companies with multiple plants. High-quality data is essential for maintaining adequate inventory levels and ensuring supply chain resilience.
4. Engage in Sustainable and Ethical Procurement
Cost reduction is important, but sustainable and ethical procurement practices are equally vital. Work with partners who share common goals and include sustainability programs in your procurement processes. This approach not only benefits the environment but also aligns with the values of company management, shareholders, and customers.
5. Plan for Continuity
Continuity planning involves having a comprehensive action plan that includes compliance with policies, processes, and corporate governance. Ethical sourcing of raw materials should be a priority, and procurement departments should challenge the status quo by following ethical sourcing principles.
Supply chain resilience depends on the quality, reliability, and knowledge of suppliers. By working with the right MRO supplier, leveraging technology, and focusing on sustainable practices, businesses can better prepare for future disruptions and maintain a robust supply chain.
For more information on how RS can help you future-proof your MRO supply chain, visit the RS Africa Exports website (https://apo-opa.co/4c1KTyg).
Distributed by APO Group on behalf of RS South Africa.
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RS is a trading brand of RS Group plc, providing product and service solutions that help our customers design, build, maintain, repair, and operate industrial equipment and operations, safely and sustainably. We stock more than 750,000 industrial and electronic products, sourced from over 2,500 leading suppliers, and provide a wide range of product and service solutions to 1.1 million customers.
We support customers across the product lifecycle, whether via innovation and technical support at the design phase, improving time to market and productivity at the build phase, or reducing purchasing costs and optimising inventory in the maintenance, repair, and operation phase. We offer our customers tailored product and service propositions that are essential for the successful operation of their businesses and help them save time and money.
RS Group plc is listed on the London Stock Exchange with stock ticker RS1 and in the year ended 31 March 2023 reported revenue of £2,982 million.
The World Bank’s 8th Economic Update for Ghana titled Strengthening Domestic Revenue Systems for Fiscal Sustainability notes that despite recent increases in the pace of exchange rate depreciation and slower-than-expected inflation reduction, Ghana’s economic indicators remain on track for 2024 and beyond.
The report highlights the steady progress Ghana has made over the past year in addressing severe macroeconomic imbalances that emerged in 2022. The economic situation has been improving in line with targets due to efforts to restore fiscal and debt sustainability, reduce inflation, and strengthen financial stability. Due to the lingering effects of the macroeconomic challenges, growth in 2023 was low at 2.9% albeit higher than initial projections, while inflation declined to 23.2% in December 2023 from a peak of 54.1 in December 2022. This progress is attributed to the Bank of Ghana’s firmer monetary policy and more stable exchange rates.
“Ghana’s macroeconomic crisis in 2022 has set back poverty reduction efforts, with poverty levels estimated at 30.3% in 2023. It is crucial to maintain the momentum of the reforms, while mitigating the impact on the poor, to help sustain Ghana’s economic rebound. In parallel, we must lay the foundations for more sustainable and resilient economic growth by implementing comprehensive structural reforms to foster economic diversification and promote long-term inclusive growth,” said Michelle Keane, World Bank Acting Country Director for Ghana, Liberia, and Sierra Leone.
The report also underscores the need to focus on the quality of the fiscal adjustment to minimize the impact on growth, the poor, and the vulnerable population. Recommendations include reestablishing the fiscal rule, strengthening public financial management, and accelerating revenue mobilization to restore macroeconomic stability and support long-term sustainable growth. In addition, the report highlights the importance of sector-specific reforms to ensure financial sustainability in agriculture and energy and rebuild capital buffers in the financial sector.
Structural reforms will be key to revitalize growth and foster economic diversification and transformation. For example, improving infrastructure quality and accessibility can boost trade, competitiveness, connectivity, and productivity. Facilitating access to long-term financing and improving the business climate could create a conducive environment for private sector growth. Building human capital and improving service delivery for underserved regions and populations can enhance productivity and attract both Foreign Direct Investment (FDI) and local investment in high-value, labor-intensive manufacturing and services.
“These measures collectively aim to enhance fiscal transparency, accountability, and resilience, ensuring sustainable economic growth; and should be complemented by initiatives to expand targeted social protection programs to promote social inclusion,” said Kwabena Gyan Kwakye, Economist and author of the Economic Update.
The special topic of the report focuses on domestic revenue mobilization, noting that Ghana’s tax collection has been low relative to its peers. Between 2017 and 2021, Ghana’s average tax collection was 13.2% of GDP, well below the Sub-Sharan Africa average and 8 percentage points short of the country’s estimated tax capacity of 21.2% of GDP. The report identifies areas of inefficiencies within Ghana’s tax policy framework and compliance mechanisms. If addressed, these could help ensure macroeconomic stability and generate resources necessary for sustainable long-term growth and poverty reduction efforts.
Despite efforts in 2023 and 2024, bold tax policy measures and tax administration reforms are necessary to improve Ghana’s fiscal position and budget credibility. The adoption of an ambitious Medium Term Revenue Strategy for 2024-2027 lays a foundation for even more robust reforms towards fiscal stability and economic prosperity. Areas the report identifies where this could be enhanced include rationalizing large tax expenditures, which have contributed to overall decline of tax revenues. This would require striking the balance between reducing revenue losses and the potential distributional and social impacts.
“Rationalizing Tax Exemptions will entail removing those deemed to be unjustified or falling short of their stated goals. The Ministry of Finance should first assess the impact of Tax Exemption removals on poverty – and suggest appropriate mitigating measures,” said Elijah Gatuanjau Kimani, co-author.
Distributed by APO Group on behalf of The World Bank Group.
The national bank of Ethiopia (NBE) and its counterpart central bank in the United Arab Emirates (CBUAE) have inked a swap and memorandum of understanding, according to a public announcement made last Tuesday. According to the NBE announcement, cross-border transaction settlement in local currencies would be possible up to a nominal value of 3 billion AED and 46 billion ETB ($795.8) at the current exchange rate.
In order to set an example and spur development for sustained foreign exchange surges in the nation, NBE is adopting a proactive and forward-thinking strategy. Its action is an illustration of brilliant strategy that, despite modest beginnings, may catalyze change and act as a ray of hope for a brighter future.
When the central banks of Ethiopia and the United Arab Emirates exchange their national currencies for a predetermined amount of time that isn’t specified on the public notice, this is referred to as a bilateral arrangement known as a currency swap agreement. The two nations’ central banks are expected to exchange predetermined amounts of their local currencies at the going market rate as part of the agreement; however, the rate at which the currencies are switched is pre-agreed and fixed for the period of the swap.
The main goal of a swap agreement is to give participating central banks access to each other’s currencies, enhancing liquidity and enabling them to meet short-term foreign exchange requirements. Swap agreements typically have a defined maturity date, after which the original currencies are exchanged back at the same pre-agreed rate.
This currency swap agreement enhances financial stability by providing a backstop against currency fluctuations, facilitating trade and investment, reducing dependence on third-party reserve currencies such as the US dollar, and building stronger economic ties. Central banks use currency swap lines to manage exchange rate risks and promote financial stability.
Similar agreements have existed between and among several economies and nations. The 2018 swap agreement between China-Japan is the biggest one with 200 billion Yuan (about $30 billion) with the aim to promote bilateral trade, direct investment, and financial stability between China and Japan. The three-year agreement, extended multiple times, has facilitated trade, reduced US dollar intermediation, enhanced financial stability, and strengthened economic ties by allowing central banks to use the swap line for liquidity support.
There are further instances of fruitful currency exchange arrangements with emerging nations. Currency swap agreements, such as those between China and Argentina, India and Japan bilaterally, Malaysia and China, and Indonesia and China, show how developing nations have effectively used these agreements to improve financial stability, encourage trade and investment, and lessen their reliance on major international currencies like the US dollar.
The 2009, the China and Argentina’s central bank’s agreement established a 70 billion Yuan currency swap line, reducing Argentina’s reliance on the US dollar and promoting trade and investment for the later during the times of economic and financial stress. Similarly Bank Negara Malaysia and the People Bank of China established a 180 billion Yuan currency swap line in 2015, promoting economic linkages and reducing reliance on the US dollar in Malaysia-China Currency Swap Agreement.
Trade-offs: implications of the Swap Agreement for the economic stability and stakeholder interests
It’s crucial to remember that the trade and investment policies between the two nations are not specifically governed by or restricted by the currency exchange agreements. These would be subject to current regulatory frameworks, trade agreements, and investment treaties, regardless of the swap line arrangements. This swap agreement is primarily focused on improving financial stability and liquidity, rather than imposing any specific restrictions on the economic activities between the participating countries. The indirect impacts on trade and investment are more about facilitating and promoting these economic linkages.
Some indirect implications for trade and investment flows between Ethiopia and UAE includes enhancing economic ties between countries by promoting cooperation, interdependence, and increased trade and investment flows. The swap line enables businesses and investors to effectively manage foreign exchange risks during trade and investment activities between two countries and improve efficiency and cost-effectiveness in bilateral trade and investment by reducing dependency on third-party currencies like the US dollar.
Swap lines facilitate trade settlements by providing mutual currency access, promoting bilateral trade through UAESWITCH and ETSWITCH platforms, thereby enhancing efficiency and effectiveness. The main question of this agreement is how these two central banks settle the exchange rate difference and volume. Albeit the fact that the statement does not explicitly stated, formal currency swap agreement between central banks outlines specific settlement mechanics and operational details, ensuring a transparent and smooth exchange rate and volume management process.
Experiences from other countries that are discussed in the aforementioned indicate that central banks of the involved countries pre-determine the exchange rate at which the currencies will be exchanged when the swap is initiated and when it matures. This exchange rate is fixed for the duration of the swap agreement providing certainty to both parties. Both central banks may periodically adjust exchange rates in line with market conditions to maintain the swap arrangement’s alignment with market conditions throughout its lifetime. The other crucial issue revolves around exchange rate differences between central banks. The spread is settled after swap maturation, with one bank paying the other (NBE to CBUAE) since the bilateral trade volume between the two shows deficit for Ethiopia to square off the transaction if the market rate moves favourably. As far as volume and liquidity management is concerned, both central banks agree on the maximum swap size or volume that can be activated under the arrangement. During the lifetime of the swap, either central bank can draw on the available liquidity by activating a portion of the total swap line. And there is no information about collateral and margin requirements if any at maturity which is usually part of the agreement.
What lesson can be drawn from pervious similar arrangements?
Scholarly research evaluates currency swap agreements’ effectiveness in promoting financial stability, facilitating trade and investment, and enhancing international policy coordination through empirical analyses. A few examples to mention are a study by Mengheng Li, Yongfu Huang, examines the effectiveness of Chiang Mai Initiative Multilateralization (CMIM) swap agreements among Asian countries, revealing their ability to reduce exchange rate volatility, improve financial stability, and facilitate increased trade and investment. Similarly, the roles of currency swap agreements in international monetary policy coordination and macroeconomic stability, found out that they enhance policy coordination and information-sharing among central banks during market turbulence according to Rasmus Fatum and James Yetman. Regarding influence of bilateral currency swap agreements on liquidity, Menzie Chinn and Hiro Ito indicated in their study that, they enhance foreign currency liquidity availability during financial stress and reduce US dollar liquidity demand.
Reducing inflation and focusing on policy space to stabilize macroeconomic variables in the economy are two of NBE’s key initiatives. Therefore, a quick discussion of this arrangement in relation to studies that assess the effects of currency swap agreements between nations on inflation and macroeconomic stability is warranted at this point.
The study by Giancarlo Corsetti et al. found that central bank currency swap agreements stabilize domestic inflation and output, mitigating financial shocks. On the same token, Cedric Tille’s study found that these agreements reduce exchange rate pass-through, improving monetary policy effectiveness. And Marcos Chamon et al.’s study highlighted the importance of these agreements in liquidity and macroeconomic stability.
These academic research studies offer evidence on the role of currency swap agreements in influencing inflation dynamics and contributing to macroeconomic stability, particularly in developing market economies. Swap agreements offer a more flexible and market-based approach to managing liquidity, allowing central banks to maintain open capital accounts while accessing foreign currency funding when needed. Overall, swap agreements are a powerful tool for central banks to manage inflation and promote macroeconomic stability.
Trade relationship between the two economies
The analysis of the import and export data for goods from the United Nations Conference on Trade and Development (UNCTAD) for the last ten years (2014–2023), although missing data for services import and export, reveals a significant discrepancy in bilateral trade between the two. According to the graph, net imports during the reported period were twice as high as exports to the United Arab Emirates.
This necessitates using extreme caution when dealing with the agreement, which is highly anticipated to resolve the immediate/short run mayhem our economy is facing with regard to foreign exchange reserves and dependence on major currencies. Immediate impact involves around exchange rate risks in swap agreements where significant consequences for less developed, poor country and net importer like us. These countries often bear the brunt of the risk, as their local currency depreciates against the trading partner, relatively developed country’s currency. This can lead to substantial losses when repaying the swap at a higher exchange rate. The strain on foreign exchange reserves can also strain the poorer country’s limited reserves, potentially undermining the swap agreement’s intended purpose. Additionally, the loss of policy autonomy can lead to restrictive monetary and fiscal policies, limiting the country’s ability to pursue economic development. Furthermore, the negative experiences can make the poorer country hesitant to enter future swap agreements, even during economic turmoil.
Other countries agreements previously indicates on currency swap agreements involving net importers, weak currency holders and poor countries has revealed several key lessons. These include power imbalances, moral hazards, geopolitical implications, limited effectiveness in crisis situations, and transparency and accountability challenges. Research shows that weaker countries often have less bargaining power, leading to disproportionate risk and costs. Additionally, swap agreements may introduce moral hazard concerns, limiting policy autonomy and undermining domestic financial resilience. Geopolitical implications can create concerns for weaker countries about the potential politicization of swap arrangements. Transparency and accountability are crucial for developing countries, especially those with limited bargaining power. Therefore, it is essential for these countries to carefully evaluate potential risks and negotiate more favourable terms.
