Economy
From The Report: Egypt 2016
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After several years marked by turbulence and uncertainty, Egypt’s economy received two welcome boosts in 2015. The first was the successful conclusion to the Egypt Economic Development Conference (EEDC) in the first quarter of the year. The second was the successful passage of the 2015/16 budget, which builds upon delicate but necessary reforms to improve Egypt’s public finances. The combination of the two – along with a range of efforts including new economic zones and power plants to improve industrial production and energy output, and a slate of public works projects including an expansion to the Suez Canal – means that Egypt is proceeding along an increasingly smooth, if still occasionally pot-holed, road to growth. There are challenges still to be tackled, but the country’s outlook is brighter than it has been since the 2011 revolution.

This chapter contains interviews with Hany Kadry Dimian, Minister of Finance; Alaa Omar, CEO, General Authority for Investment and Free Zones (GAFI); Anis Aclimandos, President, American Chamber of Commerce in Egypt (AmCham Egypt); Sindiso Ndema Ngwenya, Secretary General, Common Market for Eastern and Southern Africa (COMESA); and Karim Awad, CEO, EFG Hermes.

Articles from this Chapter

Overview

Needed reforms: Inward investment and cuts to expenditures should boost growth prospects
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After several years marked by turbulence and uncertainty, Egypt’s economy received two welcome boosts in 2015. The first was the successful conclusion to the Egypt Economic Development Conference (EEDC) in the first quarter of the year, which drew more than 70 senior executives from global firms, the leaders of major financial institutions such as the IMF’s Christine Lagarde, 15 heads of state, and the finance or foreign ministers of nations like Russia, the UK, the US and China, along with more…

Interview

The right tools: OBG talks to Hany Kadry Dimian, Minister of Finance
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Interview:Hany Kadry Dimian How is the government balancing the budget? HANY KADRY DIMIAN: The government is carrying out its medium-term fiscal consolidation plan while restructuring expenditures to better meet social needs and build a stronger platform for growth. We are doing this by reducing non-productive recurrent spending and using a portion of the savings to redirect spending to essential services and infrastructure projects. This shift began with the 2014/15 budget, when the combined…

Interview

The road to recovery: OBG talks to Alaa Omar, CEO, General Authority for Investment and Free Zones (GAFI)
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Interview:Alaa Omar To what extent has foreign direct investment (FDI) returned to pre-revolution levels? ALAA OMAR: While FDI is on the rebound it has yet to reach pre-revolution levels. Leading up to the revolution, FDI levels fell precipitously, from $8.1bn in fiscal year 2008/09 to $6.8bn in 2009/10, before dropping to $2.2bn in 2010/11, as the revolution set in. Since then, investments have begun to recover, albeit at a slower pace, with FDI totalling $4.0bn in 2011/12, $3.8bn in 2012/13…

Analysis

Meeting obligations: The government is finding new ways to fund its growth agenda
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One of the potentially positive results of Egypt’s improved economic situation is that it has compelled the government to get creative to meet social and fiscal obligations. Nowhere is this more apparent than in area funds – historically the preserve of financial houses, but recently a key area for the administration. Starting Simple The government’s effort to corral capital with which to further its growth agenda started in the simplest way possible, with the opening of a bank account in…

Analysis

A river runs through it: Egypt looks for long-term payoff on the New Suez Canal
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The expansion of the Suez Canal, completed in early August 2015, could be a significant step towards solidifying Egypt’s position as a logistics and trade centre, leveraging its location astride major East-West shipping routes. The goal of boosting traffic on the 163-km canal – a key source of government revenue and hard currency – is increasingly important as the country looks to reduce its budget deficit, bolster the Egyptian pound and maintain its import cover. Grand Opening On August…

Interview

Cross-border trading: OBG talks to Anis Aclimandos, President, American Chamber of Commerce in Egypt (AmCham Egypt)
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Interview:Anis Aclimandos Which sectors will provide the greatest opportunities for US investment in the coming years? ANIS ACLIMANDOS: The oil and gas sector will remain the most interesting area in terms of US investment for the foreseeable future. That said, renewable energy, consumer goods and pharmaceuticals all offer considerable opportunities. It is a particularly promising market for the latter two sectors, given that Egypt has the largest population in MENA. However, US companies…

Interview

Trade without borders: OBG talks to Sindiso Ndema Ngwenya, Secretary General, Common Market for Eastern and Southern Africa (COMESA)
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Interview:Sindiso Ndema Ngwenya How will the Tripartite Free Trade Area (TFTA) agreement impact intraregional trade in Africa? SINDISO NDEMA NGWENYA: The TFTA agreement will have a very significant impact on intraregional trade in Africa as the move towards a single market is consolidated. The size of the market itself, 625m people with a combined GDP of more than $1.3trn, will create powerful incentives for increased trade. Also, the pillars on which the agreement is founded – market integration,…

Analysis

Reaching out: A new trade deal could boost economies across the region
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After seven years of negotiation, the signing of the Tripartite Free Trade Agreement (TFTA) in June 2015 at Sharm El Sheikh is being heralded as a turning point in regional integration, and a significant boost for Egypt’s efforts to increase its exports to the fast-growing markets of sub-Saharan Africa. According to news reports following the signature of the TFTA, the ministry of trade and industry estimated that Egypt’s trade to Africa will nearly double over the next three years, to $5bn. While…

Analysis

A key consideration: The environment for start-ups and small businesses is improving
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Entrepreneurship is often – and rightly – lauded as a key component of dynamic economies. Innovation, enabled by ready access to capital and a permissive regulatory environment, can help drive corporate growth, exports, private sector activity and jobs – all of which are needed in Egypt. Small and medium-sized enterprises (SMEs) comprise a large portion of Egypt’s economic activity, contributing roughly 65-75% to employment and 80% to GDP by some estimates. Meanwhile, large government projects…

Interview

A clear vision: OBG talks to Karim Awad, CEO, EFG Hermes
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Interview:Karim Awad How has Egypt managed to maintain its attractiveness as an investment destination? KARIM AWAD: Market conditions around the globe are not optimal. The drop in oil prices and the slowdown in China are, in particular, weighing on emerging markets as a whole. That said, I think what makes the MENA region, and Egypt in particular, slightly different from others is its young and growing population, which will always make it attractive to multinationals and local players that…