Five years have passed since President Abdel-Fattah Al-Sisi called on Egyptians to support the New Suez Canal national mega-project and participate in financing it through Suez Canal deposit certificates.
Back in September 2014, millions of people lined up to buy the certificates, raising LE64 billion in only eight days. Earlier this month, banks started to repay the value of Suez Canal investment certificates to 1.1 million holders as they matured on 4 September.
The Suez Canal investment certificates were issued by the National Bank of Egypt, the Banque du Caire, Banque Misr and the Suez Canal Bank with a maturity period of five years and a 12 per cent interest rate in September 2014. At the time when the certificates were offered, this was the highest interest rate on the market.
After the flotation of the Egyptian pound in November 2016 and a three per cent accompanying hike in interest rates, the ministry of finance raised interest rates on Suez Canal investment certificates to 15.5 per cent from 12 per cent.
Ahead of the maturity of the certificates earlier this month the government may have been apprehensive that a huge sum of LE60 billion would be withdrawn from the banking system, but most certificate holders preferred to reinvest their funds.
Most holders preferred to reinvest the value of their certificates in other savings products instead of withdrawing their money, Tarek Fayed, chairman of the Banque du Caire, told the Middle East News Agency (MENA) this week. Some of the banks offer savings products at an interest rate of around 14 per cent.
The four banks had issued a statement in which they said that customers could withdraw the value of their certificates through ATMs using debit cards. They also invited holders to consider reinvesting their funds in other available savings products.
The proceeds raised by the certificate issue were used to fund the construction of the New Suez Canal and several new tunnels, these being completed a year after the issue in August 2015.
The project aimed at facilitating trade by deepening and increasing the capacity of the Suez Canal through the accommodation of two-way traffic in areas which previously had allowed for the passage of one vessel.
The Suez Canal Authority issued a statement last month showing that in financial year 2018-2019 the canal had recorded its highest annual revenue to date, estimated at $5.9 billion. This was an increase of 5.4 per cent, equivalent to $300 million, over the previous year.
According to the statement, the canal saw a record-breaking number of 81 vessels transiting through it in one day for a tonnage of 6.1 million tons.