Economy
From The Report: Egypt 2018
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In 2017 the World Bank estimated that GDP grew by 3.9% over the year, and forecast it would expand by 4.6% in 2018 – a significant improvement on the 2% average GDP growth rate seen between FY 2010/11 and FY 2013/14. A newly liberalised currency and the recent implementation of a much-anticipated investment framework have also left Egypt well positioned for continued economic expansion in 2018. Despite a gradually improving fiscal scenario, a structural fiscal deficit remains the key economic challenge, and one that nearly all of its reforms aim to address. Raising revenue via taxation is one way the government is attempting to tackle the fiscal deficit, and in the first half of FY 2017/18, tax revenue reached LE249bn ($16.4bn), a year-on-year increase of 66%.

This chapter contains interviews with Sahar Nasr, Minister of Investment and International Cooperation; and Tarik Tawfik, President, American Chamber of Commerce in Egypt.

Articles from this Chapter

Overview

Unlocking potential: Thanks to a wide-ranging reform programme, economic growth is picking up
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As Egypt enters 2018, a newly liberalised currency and the recent implementation of a much-anticipated investment framework have left it well positioned for continued economic expansion: the IMF expects the country’s GDP growth to reach 6% over the medium term. However, a structural fiscal deficit, high unemployment levels and socio-economic fragility are some of the challenges faced by the government as it presses forward with its ambitious reform agenda. Economic Snapshot Since 2014…

Analysis

Vital revenue: The government is focusing on increasing the income it receives from taxation
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Egypt’s attempts to boost its taxation revenue began to pay off in 2017. In the first quarter of FY 2017/18 total tax revenue expanded to LE88.6bn ($5.8bn), according to the Ministry of Finance (MoF), a significant advance on the LE57bn ($3.8bn) of the same period in the previous year and 1% more than the ministry’s target for income growth. In the first half of FY 2017/18, tax revenue reached LE249bn ($16.4bn), a year-on-year increase of 66%. Some of the gains were made in the taxation…

Interview

Concrete results: Sahar Nasr, Minister of Investment and International Cooperation, on the reforms transforming the investment landscape
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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…

Interview

Making room: Tarik Tawfik, President, American Chamber of Commerce in Egypt, on attracting foreign investment and promoting growth
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Interview:Tarik Tawfik What recently enacted reforms have been most appealing to investors? TARIK TAWFIK: Floating the Egyptian pound and lifting all measures that restricted foreign currency access were primarily the most significant measures, coupled with signing an agreement with the IMF that gave confidence to investors that our reform programme will be conforming to the liberal open market economy. Currency transferability and removing all currency restrictions was a big success. Legislative…

Analysis

Turning the tide: Rising inflation necessitated a change in monetary policy
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For the past year, discussion surrounding Egypt’s monetary policy has been almost completely dominated by a single criterion: a spiralling inflation rate which is having a deleterious effect on business growth, as well as on the lives of ordinary citizens. After an elevated, but manageable, average inflation rate of just over 10% going back to February 2014, the November 2016 flotation of the currency marked the beginning of an upward trend which saw the inflation rate rise to over 30%…

Analysis

Right moves: Key reforms are under way to improve the business environment
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The implementation of Egypt’s new investment law in 2017 was broadly welcomed as an important advance in the country’s bid to make itself more attractive to domestic and foreign capital. However, the six-place decline of Egypt in the World Bank’s “Doing Business Report 2018” is a concern for a government keen to kick-start private sector growth and demonstrate that the country is open for business. Official reaction to the report, which measures performance in areas such as starting…