Interview: Sahar Nasr
What factors have had the most significant impact on Egypt’s positive macroeconomic trends?
SAHAR NASR: First and foremost, a strong and determined leadership. President Abdel Fattah El Sisi has set a vision for a prosperous Egypt, implementing an ambitious economic and social reform programme aimed at achieving fast-paced, sustainable and inclusive development. The main pillars of this programme include macroeconomic stability and fiscal consolidation, promoting private sector participation and heavy investment in infrastructure. We have been moving forward to enhance the policy and business environment, to bridge opportunity gaps and stimulate private sector participation.
Concerted efforts are eliminating the constraints on private enterprises, as well as boosting investment from both foreign and domestic firms. These actions are already showing concrete results, and we are receiving positive feedback from around the world. Recent increases in foreign direct investment (FDI) flows reflect restored investor confidence and Egypt was ranked as the second-biggest recipient of FDI in Africa in the “World Investment Report 2017” published by the UN Conference on Trade and Development. It also ranked first among FDI destinations in Africa, replacing South Africa, in Rand Merchant Bank’s “Where to Invest in Africa 2018” report.
How are legal reforms being used to boost FDI?
NASR: A fully fledged legislative reform process is under way aiming to build a strong foundation for private sector development to boost growth and productivity. The New Investment Law – Law No. 72 of 2017, which came into effect on June 1, 2017 – brings new features to the investment landscape and introduces incentives with the objective of making Egypt one of the top investment destinations in the region. It was drafted in consultation with all stakeholders and so takes into account all challenges facing both Egyptian and international investors. The law aims to streamline business processes, cut red tape, incentivise private investment, provide guarantees and level the playing field. In addition, the amendments to the Companies Law are improving the business landscape by allowing the formation of single-person companies and ensuring minority rights protection.
Some provisions of the executive regulations of the Capital Markets Law (Law No. 95 of 1992) are being amended to increase transparency, upgrade investor protections and improve access to financial services for small and medium-sized enterprises. Moreover, Egypt passed its first Microfinance Law in order to bridge the financing gap in this sector.
What can be done to diversify the sources of FDI?
NASR: We have been taking bold steps to strengthen relations with existing partners and to forge new partnerships by implementing policies designed to establish a competitive and attractive business environment, and a supportive regulatory framework. We are also making efforts to reap the positive benefits of global integration by ensuring we can leverage Egypt’s strategic advantages, such as its location, its large and growing domestic market, and its large pool of skilled labour.
Investment is now supported by a clear and reliable regulatory framework, which includes a tailored incentive programme, guarantees that shield investors from risk, streamlined services and clear exit mechanisms. These reforms are being supported by efforts currently under way to develop infrastructure, including the building of over 4000 km of new roads, the development and upgrade of the port system and the expansion of the country’s power capacity to meet increasing demand. These efforts are translating into increased investment from a more diverse range of sources, as well as an expansion in cross-border trade. Our plethora of investment opportunities will be further highlighted by the launch of our digital investment map.
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