Saudi Arabia orders 5 percent cut in contract spending 

In a new austerity move, Saudi Arabia’s government has ordered ministries to cut spending on contracts by at least 5 percent. A document sent to all state bodies and ministries directs them to reduce the value of outstanding contracts signed to support their operations, as well as construction contracts included in the 2016 state budget, by “not less than 5 percent of remaining obligations.” It says the measures were proposed by the Minister of Economy and Planning and approved by the king to “rationalize spending and increase its efficiency.” The decision allows ministries to decide how to revise contracts to make the required savings. Another clause in the document forbids ministries and government bodies from signing any contracts without the approval of the Finance Ministry. Previously, senior officials could agree to small contracts without approval. [Reuters, 3/14/2016]

 

Kuwait approves corporate tax, other reforms as deficit widens 

Kuwait’s cabinet has approved economic reforms including the introduction of a 10 percent tax on corporate profits to narrow the budget deficit, Finance Minister Anas al-Saleh said Monday. Saleh did not say when the tax would be imposed and that the cabinet had approved “repricing” some commodities and public services. He did not elaborate, but appeared to refer to cuts in price subsidies for fuel, food, and public utilities. Saleh also said that the government would seek to privatize state-owned assets including airports, ports, and some facilities of national oil giant Kuwait Petroleum Corporation. He outlined other reforms in a report to cabinet, which include allowing private citizens to own as much as 50 percent of public-private joint ventures, reforming the labor market and the civil service system and making the public sector more efficient by linking pay to production. [Reuters, 3/14/2016]

 

Egypt central bank to hold pound steady at new rate, holds auctions 

The Central Bank of Egypt (CBE) held the pound steady at 8.85 pounds per dollar at an exceptional foreign currency auction today for $200 million. The CBE said the auction, which sold $198.3 million, was meant to finance imports of essential goods. The CBE also said it plans to sell $1.5 billion at an exceptional auction tomorrow to cover temporary overdrafts of foreign currency at banks. “The central bank announces it will hold an exceptional auction for $1.5 billion on Wednesday to cover customer debts in foreign currency that were made in import operations,” it said. [Reuters, 3/15/2016]

 

Libyan officials meets IMF representatives 

Tripoli-based Central Bank of Libya (CBL) Governor Saddeq al-Kabir met representatives from the International Monetary Fund (IMF) in Tunis on Sunday. A statement from the Tripoli-based CBL said al-Kabir discussed financial and monetary issues with the representatives. Also on Sunday, the Head of the Presidential Council and Prime Minister-designate Fayyez Sarraj met with the IMF and the World Bank. Sarraj discussed ways to provide economic and technical support to the unity government to tackle the current economic crisis. Earlier this week, the Torbuk-based CBL announced that Governor Ali al-Hebri would hold meetings with the IMF delegation in Tunis on Monday and Tuesday. [Libya Monitor (subscription), Libya Herald, 3/14/2016]

 

Algeria’s foreign reserves drop to $143 billion in 2015 

Algeria’s foreign exchange reserves fell $35 billion in 2015 to $143 billion due to the drop in global oil prices, an IMF representative Jean-Francois Dauphin said Monday. Energy earnings, which make up 95 percent of Algeria’s exports and 60 percent of the budget, fell 41 percent to $35.72 billion last year. Officials expect them to fall to $26.4 billion this year. “The foreign exchange reserves remain, certainly, at a high level but they have fallen $35 billion in 2015 to $143 billion, against $194 billion in 2013,” Dauphin said. He said the impact of the oil price drop on Algeria has so far been “limited,” but that the budget and exterior trade balances had “considerably deteriorated.” Dauphin added that sustained fiscal adjustment and structural large-scale reforms are needed to reduce vulnerabilities of the Algerian economy. His comments come after a two week IMF mission to Algiers. [Reuters, 3/14/2016]

 

Also of interest

Minister says global oil output freeze plan acceptable for Iraq | Reuters

Kuwait to fund $100 million for Egypt power plant | Al Mal (Arabic)

Egypt struggling to end corruption in wheat | Reuters

Bread scare hurts Egypt’s effort to resolve wheat problem | Bloomberg

Egypt’s GASC targeting 4-4.5 million tonnes of local wheat buying in 2016 | Reuters

Egypt minister says devaluation has no major impact on budget deficit | Aswat Masriya

Egypt parliament returns budget to government after partial floating of pound | DNE

Suspected militants stage attack near key east Libya oilfield | Reuters

Qatar plans new investment in Turkey’s banking, agricultural sectors| Hurriyet