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Egypt’s economy growing at good pace, investment incentives will enhance growth: HDB chairperson - Daily News Egypt

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Egypt’s economy growing at good pace, investment incentives will enhance growth: HDB chairperson

The Egyptian market is large and diverse; Arab and foreign investors want to enter into it because they realise it is promising


Egypt’s economy is growing at a good pace, and the presence of investment incentives will enhance this growth, according to Fathy El-Sebai, chairperson of the Housing and Development Bank (HDB).

In an interview with Daily News Egypt, El-Sebai explained that the Egyptian market is large with diverse resources. Arab and foreign investors want to enter the market because they realise its promising potential.

El-Sebai added that without local and foreign investments able to create jobs, reduce unemployment, and increase production rates, there will be no development or economic advancement. He noted that in order to encourage investors, the legislative system must be reformed, and the procedures taken by the government must be precise and clear.

Banks have enough liquidity and expertise to finance projects that enhance growth, and they have never failed to fulfil this role, the chairperson said.

How do you evaluate Egypt’s economy currently?

Egypt’s economy has been growing at a good pace for the past two years; we are achieving good growth rates—they may not be the same as in 2010, but at least we have overcome the difficult phase from before June 2013. This is a positive indicator that the Egyptian market is efficient, and able to recover and advance.

Investment incentives will certainly support the advancement of the economy, so the political stability Egypt is witnessing right now must be accompanied by some decisions and procedures to stimulate investment—most importantly investors must be encouraged and assured that their investments are safe.

What are the economy’s strengths?

The Egyptian market is large and has multiple resources. It is effective and able to bring about development.

Arab and foreign investors are waiting to enter the Egyptian market because they are aware of its promising potential. They can achieve great revenues by investing in it—the likes of which cannot be achieved elsewhere.

Egypt has very diverse raw materials; it also has a great market and deals with African, Arab, and European countries. These factors eventually work in the favour of any investor in the market.

What is required for faster economic reform?

I have always emphasised that work and increasing production are the real solutions for the economy. All state sectors should work at full capacity.

Without foreign and local investment, we won’t develop or progress economically due to the lack of job opportunities to eliminate unemployment and increase production rates.

Therefore, we must encourage local investors to increase the size of their investments. Once they are reassured about their investments, which should be the first step Arab and foreign investors will follow.

In order to encourage local and foreign investments, we should fix the legislative system in Egypt. The procedures and decisions taken by the state should be clear, fast, and specific. These decisions should be secured by laws to reassure the investors. There should be a clear and specific investment map.

Besides all this, the ideologies of the regulatory entities and officials in the country should change, so as to avoid hesitation in decision-making.

What activities or projects can boost the economy faster?

I see the tourism sector as the most prominent sector that can boost the economy at a faster pace, especially as the sector’s infrastructure already exists.

Egypt has all the necessary elements for tourism—any country with all these elements could attract 80-90 million tourists annually. This will not be difficult to achieve as every worker in this sector, and the official entities, have the desire and will to achieve that.

The real estate investment sector is also capable of increasing growth rates, as this sector is the engine of any the country’s economic growth owing to its role in moving a lot of sectors and industries linked with it.

What role can banks play to support the Egyptian economy and help it to improve, rather than focusing on investment in treasury bills and bonds?

Banks have always had the expertise and sufficient liquidity to finance projects that support growth, and have never failed to play this role; but, at the same time, they cannot lend to just any project until being reassured of its economic feasibility.

It’s much better for banks to finance customers and entrepreneurs, or to open letters of credit to obtain commissions, benefits, and achieve more profits.

Contrary to what some people say, banks are not happy to invest their funds in government debt tools, or in treasury bills and bonds. However, they are compelled to do so because they are guaranteed investment tools in light of the lack of employment opportunities in the market.

At the end of the day, banks must deal with the available financial opportunities, even if there are financial opportunities that provide a better return on investment than debt tools—they will definitely be better for banks.

What is role of banks in easing the US dollar shortage in the Egyptian market?

First of all, we know that the US dollar shortage will only be resolved by increasing the state’s resources, and decreasing expenses in foreign currencies.

We, as banks, are trying as much as possible to alleviate the problem and are exerting great efforts in this regard—particularly in terms of attracting remittances from Egyptians working abroad. However, the two prices of the US dollar in the official and informal markets, not to mention the huge difference between these two rates, limit the usefulness of these efforts.

How do you evaluate the importance of the International Monetary Fund (IMF) loan?

When Egypt obtains the IMF’s approval, the loan will serve as evidence of the efficiency of Egypt’s economy, and recognition by the fund of the economic reform programme implemented by the state.

The IMF’s approval of this loan will also open the door to improve the state’s credit rating. It is also useful for Egyptian banks to enable them to, once again, easily obtain facilities on the part of suppliers.

Here, I would like to mention an important point: the reform measures currently undertaken by the state are very important and necessary, whether or not the IMF approves in the end.

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https://dailynewsegypt.com/2016/09/19/egypts-economy-growing-good-pace-investment-incentives-will-enhance-growth-hdb-chairperson/
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