CAIRO: With the World Economic Forum only days away, Minister of Investment Mahmoud Mohieddin is talking about investments. With the support of Prime Minister Ahmed Nazif, the minister announced yesterday that the government is currently studying the possibility of establishing a development company in Sinai to aid the growth of the tourism and trade industries in the country. The minister also discussed the state of investments following the Dahab bombings, the privatization of the Bank of Alexandria and where Omar Effendi currently stands in the privatization process.
The minister was quick to point out that the establishment of the company has nothing to do with the status of the tourism and investment industries, which are still on the rise despite the Dahab bombings. Rather, the creation of a development company stems from the recent investments poured into Ain El Sokhna as new real estate projects are being hatched, he said.
The ministry is also planning a conference on Arab investments that will take place next December in Cairo, which will discuss new and future investments between Egypt and the rest of the region.
In regard to the much-hyped privatization of the Bank of Alexandria, the minister announced that a statement will be jointly released by the ministry and the central bank, shedding light on the details of the privatization of the bank.
As for the privatization of Omar Effendi, which has been put on and off the market several times due to price discrepancies, the minister announced that the sale price for the chain, which was hiked up last March, will no longer increase. The minister did concede that, while the price has been fixed, the company has yet to be sold and thus far has not been presented to the cabinet.
He also discussed the stock market’s performance in the last period, during which it took a nosedive compared to the beginning of the year. However, the minister has expressed his optimism in the developments in the market, which is slowly creeping out of its slump.
Mohieddin added that foreign direct investments (FDI) increased from $400 million in 2004, to $1.2 billion in 2005. This year, FDIs are expected to increase to $5.2 billion, for the first time surpassing the 5 percent mark of the country’s GDP. According to him, Egypt has the capability to direct these growing investments toward a multitude of sectors and industries, whether the investments are domestic or foreign.
The minister also stated that the government, as part of a collective effort to eradicate or significantly decrease the level of unemployment in the country, is working toward increasing the rate of development in various industries, which they hope will increase the number of individuals entering the workforce each year to 6,000.
In order to increase the rate of employment in the country, the government must increase investments, both foreign and domestic, said the minister. He also added that the rate of economic development is expected to increase from the current rate of five percent to six percent.
The privatization program undertaken by the government will also aid in increasing investments, decreasing the inflation rate and contributing to the overall growth of the economy, according to the minister. Last year, only five companies underwent privatization, according to the minister, while this year has witnessed the sale of numerous public companies to private sector businesses, 164 companies are still in line to be privatized.
The chairman of the General Authority for Investment and Free Zones (GAFI), Ziad Ahmed Bahaa El Din, also stated that for the first time, GAFI, with the help of banks and government agencies, will establish Al Saeed Holding for Investment, with capital worth an estimated LE 50 million.
