Egyptian minister wants country to be ‘investment magnet’
Cairo - Behind Egypt’s plan to attract $10 billion in foreign direct investments in the fiscal year 2016-17 will be a lot of hard work. Egyptian Investment Minister Dalia Khorshid will be one of those toiling long hours to entice people and businesses to put their faith and money in the country.
Khorshid, a 42-year-old soft-spoken former investment banker who took over the Investment portfolio in March, has been working to change Egyptian investment laws and administrative procedures to make the country a more attractive place to invest.
She has turned her eastern Cairo office into a beehive, talking to investors, thinking of ways to bring in potential ones and convincing others already investing in Egypt to increase their investments.
“This is about time Egypt had an investment law that enables it to compete with top investment destinations in the world,” Khorshid said in an interview. “The same law must fulfil the aspirations of local investors.”
Egypt’s investment sector has started picking up since the recession after the 2011 revolution. In fiscal year 2015-16, it received $6.8 billion in investments, $500 million more than the previous year.
Khorshid said most of the new investments were from companies already investing in Egypt. The big challenge is to attract newcomers.
The country ranked 115th in the World Economic Forum’s Global Competitiveness Report 2016- 2017, demonstrating what were called improvements in its security level, a more efficient judiciary in settling business disputes, better property rights protection and significant reforms in subsidies, taxes and the business environment. In 2015, Egypt ranked 119th.
Egypt’s Supreme Investment Council, headed by President Abdel Fattah al-Sisi, has been working to make Egypt a favourite country for international investors.
The council recently decided to offer free land to some investors, five years of tax exemptions and free utilities. In early November, Egypt floated its currency, devaluing it 48%, which the government hoped would eradicate a rampant parallel foreign currency market.
Economists said these measures make Khorshid’s goal of attracting $10 billion in investments “realistic”.
“This is easy to achieve, especially if we will keep simplifying investment procedures,” said Samir Saeed, an economics professor at the American University in Cairo. “Egypt has a big chance to get a large share of the international investment cake.”
Economist Hani Tawfiq said measures taken by Khorshid and the Supreme Investment Council showed that Egypt was serious about persuading investors to come to it.
“Laws are very important in fact,” Tawfiq said. “After all, our country needs to introduce legislative reforms that make investing in it easy.”
It used to take investors a long time to finalise investment procedures or settle disputes in Egypt.
Khorshid said this is ending. The new investment law will limit delays in allocating plots of land, shorten the time investment licences take to be issued and cut the red tape for meeting investors’ demands, she said.
“The law, which will be submitted to the cabinet for approval soon, will also introduce new incentives to investors and diversify these incentives,” Khorshid said. “It will at the same time offer more guarantees to investors.”
Khorshid also applied measures to ease the process of starting a business in Egypt. Now it takes investors 72 hours, at most, to fulfil requirements needed to launch a business, little time to obtain plots of land and not more than 15 days to settle disputes with government bodies.
Nonetheless, those already investing in Egypt look at these measures and say they feel betrayed and forgotten with some saying Khorshid’s measures leave investors in the country behind. “Most incentives are given to those who have not invested their money here yet,” said Mustafa Kamal, the owner of a factory that manufactures air conditioning systems in 10th of Ramadan, an industrial city east of Cairo. “A large number of factory owners have problems and they do not know where to go.”
Khorshid said she well understands what every additional cent in foreign investment means for her country. With unemployment rife, poverty growing and commodity prices rising for locals and regional conflicts in the news, Egypt has never more urgently needed foreign investments, she said.
“Despite all challenges, Egypt is well-placed to be an investment magnet,” she said. “We are taking measures to ensure that our country will take its rightful spot on the international investment map, and it will very soon.”