Interview: Sahar Nasr
How are recent economic reforms attracting foreign direct investment across sectors?
SAHAR NASR: Egypt has undertaken economic and institutional reform programmes in order to boost growth and encourage investment, which will in turn lead to job creation. The New Investment Law of 2017 provides the guarantees and assurances necessary for the private sector and foreign investors to come and invest. By introducing a number of tax incentives at the same time, we want to ensure that we are competitive with other high-growth emerging economies as a destination for foreign direct investment. Significant investment in core infrastructure such as roads, airports and power generation facilities have also strengthened the backbone for the success of businesses across economic sectors, many of which require this infrastructure to transport materials, produce efficiently and access local and international markets. Increased focus on value-added industries, job creation, knowledge-sharing and technology advancement is allowing the economy to be more export-oriented rather than import-reliant, and is also attracting high-quality investment. As a result of these reforms, many large companies from the UK, Europe, Asia or the US are already expanding their businesses here, exemplifying how private sector confidence is the real measure of economic growth.
What role can special economic zones (SEZs) play in developing Egypt’s industrial and export potential?
NASR: Egypt is the gateway to Africa and is at the heart of the global map connecting the West and East. Not only do we have a local population of 100m that is growing at over 2% each year, but signed free trade agreements connect us with 500m people in Africa and nearly 1bn in other global markets. This is a huge draw for companies looking to reach consumers efficiently and cost effectively at a time when the cost of global trade is increasing due to protectionism and lack of long-term clarity. Egypt’s transport and logistics infrastructure also plays a role in ensuring that investment zones are designed to boost efficiency, supply chain integration and production synergies. While investment zones cater to the local market, free zones are export-oriented. A special emphasis should be put on the Suez Canal SEZ, which helps attract key investment, particularly in the areas of electronics and appliance manufacturing, maritime industries and other heavy industries. Clustering is an important advancement of industrial and investment zone planning, as this groups related industries together rather than combining different sectors, which was done previously. This makes it possible to take better advantage of economies of scale and more integrated value chains.
Why should Egypt be considered as a preferred investment destination in Africa?
NASR: President Abdel Fattah El Sisi has announced very clear priorities and an ambitious programme focused on investing in human capital, health care and capacity building for youth. Like the rest of the African continent, Egypt has a lot of potential, but capitalising on this potential requires a diversified range of investment. Regional integration of infrastructure, rail, road and IT will boost the mobility of goods and people, reduce the cost of doing business and spur intra-continental trade, allowing Egypt to serve as a gateway to the African continent. The timing of the economic reforms has been very beneficial because these reforms began ahead of the recent global volatility in emerging markets. Bold actions have enabled us to deal with this uncertainty and an increasingly protectionist trade environment. The low cost of doing business, particularly after the currency devaluation, is a huge comparative advantage. Our investment climate, and the safety and security of our country, has been strengthened tremendously, and Egypt has improved its ranking in the ease of doing business index, along with recent IMF and other ratings agency evaluations.
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