CAIRO: After successfully implementing its business start-up procedures pilot project in Alexandria, the International Finance Corporation (IFC) announced Wednesday it would expand the project nationwide to include three to five cities in its second phase.
The IFC – the private sector arm of the World Bank Group – signed Wednesday a memorandum of understanding with Egypt’s Ministry of Housing, Utilities, and Urban Development to streamline the process of obtaining building licenses and permits as well as help reduce cost and time involved in business start-up procedures.
“[Among other things], this protocol aims at simplifying construction license procedures, which comes in the light of passing a new incorporated housing law [currently under discussion in parliament], said Ahmed El-Maghraby, Egypt’s minister of housing.
“Building licenses procedures are one of the main criteria in evaluating ease of doing business in Egypt . and I hope that under this protocol as well as the new incorporated housing law, Egypt becomes one of the top 50 countries in simplifying building procedures, which will positively reflect on Egypt’s investment climate.
Managed by the IFC, the project will involve the government as well as the private sector in identifying issues that hinder processes for obtaining licenses and permits. The IFC will introduce international best practices, replicate pilot reforms at the municipal level, and streamline approval procedures required by public entities.
“In this second phase of the project, we will take what we’ve done in Alexandria and roll it out to a number of governorates nationwide, explained Jesper Kjaer, IFC’s general manager. “The IFC will bring in its expertise from similar projects implemented around the world. We are the honest broker among all parties involved in the project.
The IFC will also co-finance the project, but the lion’s share of funding comes through an LE 2 million grant from the Swiss government. “For the Swiss government, Egypt is one of the key development partners in the world, added Kjaer.
“This is an important project for business development in Egypt, and Switzerland is in a position to contribute to this project, pointed out Charles Held, Swiss ambassador to Egypt. “The importance of this project lies in simplifying business procedures, which will encourage investment and produce more business projects in Egypt.
“The project will also allow more informal business entrepreneurs to enter the formal world of business and get access to the privilege of free trade agreements signed by Egypt, he added. “It builds up on a quite impressive momentum: that the Egyptian government has been implementing business reforms. That is why in 2008’s ‘Doing Business Report,’ Egypt [leapt] 39 positions, ranking 126 out of 179 countries worldwide.
According to IFC officials, the project – launched in 2006 – has greatly contributed to Egypt’s advancement on the World Bank’s annual report that measures ease of business procedures worldwide. In last year’s report, Egypt emerged as the world’s top reformer of business processes.
“There are clear signs that the boarder investment community recognizes effective reforms that the government has undertaken in recent years to simplify the business environment, Kjaer said. “Business-friendly regulations pave the way for new enterprises and jobs that will benefit Egypt’s development. This initiative will delve deeper into reforms to address obstacles facing investors in start-up businesses.
In 2006, the IFC joined forces with Egypt’s General Authority for Investment and Free Zone (GAFI) in a bid to simplify business start-up procedures in Alexandria on a pilot basis. The first phase of the project yielded into inauguration of a One-Stop Shop in Alexandria last May. This brought around 20 government entities together under one roof, allowing domestic and foreign investors alike to register a company with relative ease.
It has helped simplify all necessary procedures needed to incorporate an enterprise, namely land allocation approval, building permits, industrial registration, operating license, and tax registration. IFC allocated $800,000 to fund the Alexandria project.
“It was quite impressive to see that phase one of the project [resulted in a] 30 percent reduction in time taken for building permits and 26 percent reduction in registration fees, Kjaer added.
The second phase of the project will last for 18 months, in which the ministry of housing will select cities where the project will be implemented.
