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Egyptian Automotive Aftermarket Enters Fast Lane

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Egyptian Automotive Aftermarket Enters Fast Lane

Egypt’s automotive aftermarket is accelerating and has been dubbed “one of Africa’s most exciting markets” as its motoring population and vehicle sales grow, its economy expands, FDI floods in, and the government moves to combat automotive emissions.

It’s a powerful combination which Germany’s Africa business experts africon GmbH, the knowledge partners of Automechanika Dubai, the Middle East and Africa’s largest international automotive aftermarket trade show, contends has resulted in an aftermarket now worth between US $1-2 billion. And africon GmbH should know, having worked on more than 30 automotive market projects across Africa in the last few years.

The company has now turned its expertise specifically on the high potential Egyptian market with a whitepaper collated from research among companies within the Arab republic’s automotive industry.

Opportunity Rising:

The paper’s positive and opportunistic sentiment points to the country’s rising population – now the third largest within Africa with more than 100 million people – and its economic advancement, having overtaken South Africa as the continent’s second-largest economy with a GDP of US $360 billion and sturdy growth forecasts.

“The IMF predicts that growth will slow to around 2.5% this year but recover to more than 5% from 2022 forward,” the paper reports. “After economically difficult years in 2016/17, inflation has come down to around 6%. Unemployment has been reducing, and GDP per capita in US$ terms has increased by almost 50% since 2017. Consequently, Egypt has been the largest recipient of FDI in Africa for several years in a row, receiving more than $9 billion worth of investments in 2019 and almost $6 billion in 2020. This growth is driven, among other things, by continuous economic and fiscal reforms. For instance, on the Ease of Doing Business Index, Egypt has improved by 14 places since 2018.”

Egypt is now in growth mode, even despite the rigors of the COVID-19 pandemic and was among the few countries to report full year GDP growth in 2020.

Growth Market:

The growth has fed into the aftermarket, with the country now being home to one of Africa’s largest vehicle fleets with around six million vehicles on the country’s roads, with the majority – approximately 4.6 million – being passenger cars. This is followed by almost a million trucks and about 470,000 buses. Most passenger cars are petrol-powered, while many commercial vehicles rely on diesel engines but that could soon change.

“The government is increasing the share of dual-fuel cars, which can use both petrol and compressed natural gas (CNG). Around 300,000 vehicles in Egypt already use CNG. This number will likely increase further over the next years,” the paper reports.

Egypt is also taking bold steps to replace internal combustion engines with more environmentally friendly alternatives. Last year the government announced an initiative to encourage consumers to replace old vehicles for new ones operating on CNG engines with extended credit facilities among its green program incentives. This has led to China’s Dongfeng Motors planning to assemble up to 25,000 electric vehicles a year in an Egyptian assemble plant.

Even the brand make-up of the country’s vehicle fleet is changing. The significant market shares held by Chevrolet/Isuzu, Hyundai, Toyota, and Nissan could be eroded by the entry of European and Chinese brands fueled by preferential import duties.

“New vehicle sales in Egypt have recently grown, currently standing at more than 200,000 units per year. Around half of this figure is assembled locally. Egypt is home to notable local vehicle assemblers like GB Auto, General Motors Egypt / Mansour Automotive, and Nissan. While most passenger vehicles are produced for the domestic market, many buses are exported to regional markets,” explains the whitepaper.

Change The Name of the Game:

Change is also coming to Egypt’s heavily import-driven aftermarket, which is dominated by Asian suppliers, namely China, Korea, and Japan. However, Germany and the US now rank among the country’s top ten suppliers of parts and components and globally leading brands enjoy relatively high market shares for crucial parts. But the local component manufacturing market is gaining ground and supplying local vehicle assemblers, the aftermarket and export markets with a range of batteries, brake parts, wiring and filets.

Egypt’s importer/distributor landscape is a mix of small and large companies, most of which are based in Cairo. The independent aftermarket is fragmented. The importers/distributors sell directly to end-users, workshops, and a network of wholesalers and retailers across the country. As is the case in other African markets, a significant share of Egyptians, having taken the advice of trusted mechanics, buy their parts from retailers instead of from workshops. However, most do follow the advice of their trusted mechanics.

The Trend & Outlook:

E-commerce is fast emerging as a significant aftermarket force through highly visible platforms such as Odiggo, Tawfiqia, Egyparts and Amazon Egypt.

The Egyptian aftermarket is ripe for growth and to offer up great opportunities for parts producers, distributors, and service providers, but increasing competition from local producers may mean overseas suppliers will need to invest in their own on-the-ground structures or seek out ways to add value locally to increase market shares.

GB Auto, a leading Egyptian automotive supplier, sums up the expected scenario: “We currently see three factors strongly influencing the future of our market in Egypt: firstly, we are expecting a period of robust growth across various industry segments. Secondly, online sales will likely gain significant importance. Thirdly, the share of CNG-powered vehicles increasing further, which will open up new industry segments and growth opportunities,” explained Mohamed Yahia, Managing Director of Ready Parts (GB Auto Group).

Others looking for indicators of the growth potential can track the Egyptian visitor presence at Automechanika Dubai which has risen by 20% since 2015.

“We anticipate a surge in visitors from Egypt when the show returns from December 14th-16th December. This year we have the support and presence of Egypt Expo & Convention Authority (EECA) and have also seen a 142% y-o-y (2019-2021) increase in floor space taken from Egyptian businesses – a true testament to current conditions and the appetite for doing business,” commented Mahmut Gazi Bilikozen, Automechanika Dubai’s Show Director.

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Dollar To Naira Exchange Rate Today 28 October 2021

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Dollar to Naira exchange rate today 28 October 2021, black market rate can be accessed below.

IMPORTANT NOTE: Please note that the exchange rate changes hourly.… it depends on the volume of dollars available and the Demands. What it means is that…you can buy or sell 1 dollar at ₦571 and the price can change (high or low ) within hours.

Crystal News has obtained the official dollar to naira exchange rate in Nigeria today including the Black Market rates, Bureau De Change (BDC) rate, and CBN rates.

How Much Is Dollar To Naira Exchange Rate Today Official Rate?

October 28 dollar to naira official exchange rate: $1 dollar to naira =₦414.13

The exchange rate between the Naira and the US dollar according to the data posted on the FMDQ Security Exchange where forex is officially traded showed that the naira opened at ₦414.13 per dollar on Thursday, 28 October 2021, after it closed at ₦415.07 per $1 on Wednesday, 27 October 2021. This represents a change of -0.07%.

How much is exchange rate of Dollar to Naira in Black Market today?

The Nigeria parallel market (black market dollar exchange rate today) to the Nigerian Naira is as follows: For the Lagos market (black market).

LAGOS PARALLEL MARKET RATES October 28, 2021 (BLACK MARKET): dollar to naira exchange rate today black market

October 28 dollar to naira black market exchange rate: $1 dollar to naira = ₦571

Lagos parallel market (black market dollar exchange rate today)

The local currency opened at N571.00 per $1 at the parallel market otherwise known as the black market, today, Thursday, 28 October 2021, in Lagos Nigeria after it closed N571.00 per $1 on Wednesday, 27 October 2021.

Note: dollar to naira exchange rate has stabilized at N570-575 per $1 since Monday, October 11. This is coming after CBN vs Aboki FX clash over the dollar to naira black market exchange rate.

Even though the dollar to naira opened in the parallel market at ₦571 per $1 today, Crystal News reports that the Central Bank of Nigeria (CBN) does not recognise the parallel market, otherwise known as the black market. The apex bank has therefore directed anyone who requires forex to approach their bank, insisting that the I&E window is the only known exchange.

Crystal News reports that the black market, the players buy a dollar for N567 and sell for N571 on Thursday morning, October 28, 2021 after they boughtN566 and sold N575 on Wednesday, 27 October 2021.

Meanwhile, Crystal News reports that the USD started this week at ₦570 in Parallel Market also known as Black Market on Monday, October 25, 2021 in Lagos Nigeria, after it opened N572 last week Monday, October 18, 2021.

Disclaimer: Crystal News  does not set or determine forex rates. The official NAFEX rates are obtained from the website of the FMDQOTC. Parallel market rates (black market rates) are obtained from various sources including online media outlets. The rates you buy or sell forex may be different from what is captured in this article.

 

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eNaira: CBN Issues Guidelines For Newly Launched Digital Currency

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eNaira

Crystal News earlier reported that President Muhamadu Buhari has launched controversial digital currency, eNaira introduced by the CBN.

This online news platform understands that the eNaira has become available for download, with more than 5000 downloads within hours of the launch.

Following the launch, apex bank released regulatory guidelines which stipulate that charges for transactions that originate from the e-Naira platform will be free in the first 90 days commencing from October. 25.

After this period, applicable charges as outlined in the Guide to Charges by Banks, Other Financial and Non-bank Financial Institutions will become effective.

The eNaira speed wallet app meant for individuals had, as of 4 pm, seen more than 5000 downloads while the eNaira speed merchant wallet had seen close to 1,000 downloads.

According to the regulatory and issuance guidelines, banks will automatically be onboarded by the CBN while merchants will be onboarded once they download the app and individuals will have to onboard by themselves.

The guideline revealed that there would be different wallets for different stakeholders.

eNaira: CBN Issues Guidelines For Newly Launched Digital Currency

“The eNaira stock wallet belongs solely to the CBN and it shall warehouse all minted eNaira” the guideline stated.

It said that financial institutions were expected to maintain one treasury e-Naira wallet to warehouse eNaira received from the CBN e-Naira stock wallet.

“Financial Institutions (FI) may create eNaira sub-treasury wallets for branches tied to it and fund them from its single eNaira treasury wallet with the CBN and FI may create eNaira branch sub-wallets for its branches.

“The e-Naira branch sub wallet shall be funded from the treasury eNaira wallet.

“eNaira Merchant speed wallets shall be used solely for receiving and making eNaira payments for goods and services. eNaira speed wallets shall be available for end-users to transact on the e-Naira platform.”

To ensure the security of funds, the eNaira is expected to have two-factor authentication and other measures.

Meanwhile, daily transaction limits for Tier 0, which is just a phone number without a verified National Identity Number, were set at N20,00 with a balance limit of N120,000.

Tier1 category, which has a verified number has a N50,000 transaction limit and N300,000 balance limit.

Tier2 and Tier3 categories have daily transaction limits of N200,000 and N1 million as well as N500,000 and N5 million balance limits while merchants have no limit.

According to a circular signed by Mr. Chibuzo Efobi, the CBN director Financial Policy and Regulation Department, the e-Naira will compliment cash as a less costly, more efficient, generally acceptable safe, and trusted means of payment and store of value.

“Additionally, it will improve monetary policy effectiveness, enhance government’s capacity to deploy targeted social interventions, provide an alternative less costly channel for the collection of government revenue and boost remittances through formal channels.

“The guidelines seek to provide simplicity in the operation of the eNaira, encourage general acceptability and use, promote the low cost of transactions, drive financial inclusion while minimizing inherent risks of disintermediation or any negative impact on the financial system,” it reads in part.

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SMEDAN Signs Memorandum Of Agreement With Micro Finance Banks

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SMEDAN

Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) on Tuesday in Abuja, signed a Memorandum of Agreement with 15 Micro Finance Banks for the implementation of the One Local Government, One Product (OLOP) programme.

OLOP is SMEDAN’s flagship programme positioned to make a significant contribution to the growth of the economy as well as in meeting the goals of the Africa Continental Free Trade Area Agreement (AfCFTA).

Speaking at the signing of the Memorandum of Agreement with officials of the MFBs, the Director-General of SMEDAN, Dr Dikko Radda said that the project was to assist SMEs grow their businesses.

Radda, who expressed worry that a major challenge hindering the growth of SMEs was the lack of access to loans, urged the MFBs to ensure timely disbursement of money to grow businesses.

SMEDAN Signs Memorandum Of Agreement With Micro Finance Banks

He reiterated SMEDAN’s commitment to drive the OLOP project in identifying a single product in one local government area and assist SMEs operators in form of cooperatives, with financial, technical and marketing support.

According to Radda, out of 774 LGAs, 364 LGAs have been covered from 2016 to 2020.

“In 2021 alone, 212 LGAs are expected to be covered, leaving a balance of 198 LGAs to be covered in 2022 to complete the first cycle.

“This year, we are targeting two cooperative societies per senatorial zone, making it six cooperative societies per state. The second cycle will commence in 2023 when we will revisit already visited LGAs,’’ he said.

While commending some cooperative societies for performing creditably, Radda expressed concern that difficult terrain in some rural LGAs affect selection, monitoring and evaluation.

He listed high cost of monitoring and evaluation, delayed documentation and poor due diligence by some participating MFBs as well as delayed disbursements as some of the challenges confronting the programme.

Radda also decried delays in loan repayment by some of the beneficiaries.

He urged the MFBs to ensure there was no unnecessary delay in disbursement or diversion of fund and that disbursements were made into the cooperate account of the cooperative societies.

Radda also tasked the MFBs to ensure that the cooperatives submit bankable business plans before disbursements were made.

Speaking on behalf of the MFBs, Mr Kayode Akinade, Managing Director, MICROVIS MFB, pledged that they would adhere strictly to the terms of agreement and ensure timely disbursements of funds to cooperative societies.

According to Akinade, the funds will be utilized for what they are meant for.

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