CAIRO: Egypt is planning to set up 21 special investment zones over the next two years in the Delta and Upper Egypt governorates, according to local news reports.
Ten zones will also be established next year, reported Al-Shorouk newspaper, quoting Investment Minister Mahmoud Mohieldin.
According to reports, the private sector will manage operations and licensing as well as establish the needed infrastructure.
Egypt has been working to spur investment activity by creating these specialized zones, namely in areas which tend to fall off investors’ radar, as well as encouraging private sector participation in infrastructure development. These newly announced zones will see both objectives come into play.
Along the same lines, the International Finance Corporation, the private sector arm of the World Bank Group, hosted a conference titled “Zones in Egypt: Engine for Accelerated Growth,” to raise awareness about the different types of investment zones available in the country.
Representatives from Egypt’s Ministries of Trade and Industry and Investment were also on hand.
Creating private sector zones will “increase the supply of usable land, create jobs, and boost economic activity,” the IFC said in a statement.
These zones have the potential of attracting up to $13 billion in investments within four years, the IFC said, with the private sector managing the majority of the country’s new zones.
Jesper Kjaer, IFC senior manager for the Middle East and North Africa, said, “IFC is working with the Egyptian government to address the supply of critically needed developed land with basic services including power, water, transport and internet links for individual investors. This will also help Egypt create more than 100,000 additional jobs in the next three years."
The IFC has partnered with Egypt on several infrastructure projects through public-private partnership initiatives.
Sherif Hamdy, IFC operations and investment climate officer for the Middle East and North Africa, said that the collaboration with the government dates back to 2000 to help simplify the environment for businesses to startup, and has consisted of three phases since 2006.
Hamdy explained in detail that the first phase involved addressing the business setting as well assessing building permitting industrial licensing in Egypt.
“During this phase we [strove] to understand, assess, map out and benchmark according to international standards as well as obtain recommendations for regulations,” he said.
The second phase, which lasted between 2008-2009, revolved around moving from the legislative to the process level, in which new legislation was created and appropriate processes were designed for building permitting and licensing.
The final phase will begin mid-2010 and last for one or two years, and will see the implementation of both the first and second phases, in which the processes in phase two were streamlined and were consolidated into zones.
One of the key simplification of regulations promoted by the IFC was the reduction of required start-up capital, from more than LE 50,000 to LE 1,000, Hamdy explained.
Working with the Ministry of Housing, Utilities and Development, the IFC helped introduce a new law in the construction sector in April 2009, which, when fully implemented, will reduce the amount of time needed to approve a project.
“Currently it takes six months, but with this…it will be cut to two months. This equates into a more effective and friendly regulatory environment for the private sector,” Hamdy said.
Already, according to the IFC, it has helped Egypt reduce business start-up time by 30 percent on average.
Egypt ranked in the top 10 business reformers worldwide in the World Bank and IFC “2010 Doing Business Report,” climbing from 116 to 106 out of 183 countries.
“In order for Egypt to be a competitive investment climate the government must ameliorate communication between the various ministries and other government bodies. Coordination is key,” said Hamdy.
