Economy
From The Report: Egypt 2017
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Egypt’s GDP per capita of $3615 in 2015, according to the World Bank, is considerably lower than the world average of $10,058, and establishes the country as lower-middle income. The nation’s transition from an energy exporter to a net importer of gas has resulted in a stubborn current account deficit. Nevertheless, Egypt entered 2016 on the back of some encouraging economic data. According to the Ministry of Planning, real GDP for FY 2014/15 grew by 4.2% at market prices, the most rapid rate of expansion since the 2011 revolution. Improving Egypt’s investment credentials will remain a key concern for the government over the coming year, as it seeks to shift the burden of development from the state to the private sector. The promulgation of the new Investment Law will bring much-needed clarity to important investment factors such as free zones, tax exemptions and the purchase of state-owned land. In the short term, however, the government is likely to continue to face considerable economic challenges. 

This chapter contains interviews with Mohamed Khodeir, Chairman, General Authority for Investment; Anis Aclimandos, President, American Chamber of Commerce in Egypt; and Abdulwahab Al Bader, Director-General, Kuwait Fund for Arab Economic Development.

Articles from this Chapter

Overview

Up and running: Major policy developments and reforms are driving growth and improvements
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While Egypt continues to face considerable economic challenges as it confronts the legacy of its recent political history, at the outset of 2017 the nation’s economic planners have room for optimism. A process of fiscal reform is well under way, a long-awaited legal framework aimed at attracting new investment is almost in place, a Mediterranean gas find promises to nearly double the nation’s gas reserves and, other than unrest in the remote Sinai Peninsula, the country has enjoyed a period…

Interview

Opening doors: Mohamed Khodeir, Chairman, General Authority for Investment, on creating an attractive climate for foreign investment
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Interview: Mohamed Khodeir What are the drivers behind the recent increase in foreign direct investment (FDI)? MOHAMED KHODEIR: Egypt’s net FDI has risen by 54.6% since the 2011 revolution, reaching $6.8bn in the fiscal year ending June 30, 2016. As announced by the Central Bank of Egypt, EU investments topped investment inflows in FY 2015/16 with 63.2% of the total – the UK making up 75.6% of the EU share – and Arab countries accounted for 18.3%. This increase follows some fiscal and legislative…

Interview

Best practices: Anis Aclimandos, President, American Chamber of Commerce in Egypt, on government regulations and attracting investment
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Interview: Anis Aclimandos What impact will the float of the Egyptian pound have on investment attractiveness? ANIS ACLIMANDOS: The flotation is an important step in attracting foreign direct investment (FDI) because it eliminates the parallel rate for Egypt’s currency, and it increases transparency for foreign investors. The pound’s decrease in value to its market rate makes investing cheaper for those with foreign currency. Also, domestic manufacturing will now be able to more easily compete…

Analysis

Chipping in: Tax reform set to help bring in more public revenue
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The government has scored some minor successes in the area of taxation over the past two years. The introduction of the long-awaited real estate tax in 2014 was a victory in principle, given its complicated gestation since it was first proposed in 2008. The new levy encountered some public opposition and it took until 2011 for the Supreme Council of the Armed Forces (SCAF), which assumed power after Hosni Mubarak’s ouster, to revisit the law and propose a number of modifications with a view to…

Interview

Steadfast commitment: Abdulwahab Al Bader, Director-General, Kuwait Fund for Arab Economic Development (KFAED), on the investment activities of Gulf-based entities in Egypt
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Interview: Abdulwahab Al Bader How have low oil prices impacted the ability of Gulf Cooperation Council (GCC) entities to contribute to development projects in Egypt? ABDULWAHAB AL BADER: The drop in oil prices since mid-2014 has not diminished the GCC’s strong support for Egypt’s economic development, or its contributions to other developing countries. This was demonstrated by the pledge of over $12bn in aid to Egypt by Saudi Arabia, the UAE and Kuwait at the Egypt Economic Development Conference…

Analysis

Free and clear: While challenging, the currency flotation should allow for more successful development
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It has been a long battle, but after years of defending the local currency, the Egyptian government has showed it was willing to end its grip on the pound in 2016, floating the currency after months of speculation. The effects of this decision are likely to be one of the key economic talking points of 2017. As with other significant depreciations around the world in recent decades, the development presents sizeable challenges to the government at a difficult time in Egypt’s economic history. However,…

Analysis

Taking initiative: New programmes are expanding financing options for small and medium-sized enterprises
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Small and medium-sized enterprises (SMEs) play a crucial role in the Egyptian economy, although a historic lack of definitions and the large size of the informal economy have made it hard for government planners to scale their contribution. “Access to information on the SME sector is a major challenge and, as many operate in the informal sector, the infrastructure for collecting that information has traditionally been lacking,” Omar El Maghawry, CEO of FEP Capital, told OBG. “The last official…