Interview: Jeffrey Donaldson
What impact is Brexit expected to have on trade between the UK and Egypt?
JEFFREY DONALDSON: The UK remains open for business; we are the same outward-looking, globally minded, big-thinking country we have always been. In 2016/17 the UK represented 41% of total foreign direct investment (FDI) inflows into Egypt.
This decade alone, UK companies have invested $43bn in Egypt and bilateral trade is going from strength to strength. The UK is working closely with the Egyptian government in order to ensure our strong trade and investment links and our trade terms remain unaffected by Brexit, and to improve these links in the future. In the coming years we aim to increase our bilateral trade with Egypt in goods and services, which is already £3bn.
As a first step, we are working to transition the EU-Egypt Association Agreement, ensuring continuity of our trading relationship. There is a real opportunity to boost economic links as the UK and Egypt both embark on projects of national renewal, and we have seen considerable interest in strengthening trade and investment ties.
This year, the largest UK trade delegation in 20 years joined me on a visit to Egypt. Companies with an existing footprint are scaling up their investments in Egypt, and companies that are new to the market are deciding that the time is ripe to invest.
In which sectors do you see the greatest potential for UK investment in Egypt?
DONALDSON: There is a huge range of opportunities; over 1500 UK businesses are registered in Egypt across many sectors. Energy remains central, with BP alone planning to invest $14bn in the country in 2017-21. I also see great potential for UK investment to continue to grow in sectors that invest in human capital, including education and health. Investment in human capital is crucial for any country’s economic growth, and these sectors are a high priority for the Egyptian government and areas where UK has great expertise. UK companies are also sharing their skills, knowledge and expertise with their Egyptian partners in ways that benefit both parties. Building expertise leads to increased investor confidence, which is what the UK-Egyptian economic partnership is all about.
How can Egypt make its business environment a more attractive destination for FDI?
DONALDSON: As of 2019 Egypt’s nominal GDP stands at $250bn, putting it in the top-three economies in Africa. Even more promising, the IMF projects the GDP growth rate will rise to 6% by 2020. There is huge potential and promise, and the UK wants Egypt to succeed as a secure, prosperous and democratic state. A key factor to make Egypt’s business climate attractive for FDI is promoting a strong Egyptian macroeconomy with functioning, accessible infrastructure. We are backing a number of infrastructure priorities, including financial support through UK Export Finance, and we have established an investment working group to address investor issues and promote new investment.
We are also currently working with the Egyptian government to build an environment where business can flourish, as they implement structural reforms to unleash the potential of the private sector to boost job creation. These reforms are supported through our £15m World Bank Trust Fund and support for informed policy-making, including reforming the costs of starting a business and improving the ease of doing business. It is crucial that reforms are deeply rooted and sustainable, and create inclusive, sustainable growth by reducing youth unemployment, integrating more women into the workforce and distributing growth across the country’s regions to build an economy that works for all Egyptians.
Read More from OBG
