Egypt has shown its economic vision that can anticipate the future, deal with its challenges and opportunities, and face risks. This vision is reflected in the achievements that have been made in a short period, such as reforming the economy, improving the investment climate, implementing infrastructure projects, and maximizing Egypt’s potential.
Recently, Cairo hosted the first session of the Egypt and Investment Challenges Conference, which was attended by delegations from more than 25 Arab, foreign, and African countries, as well as representatives from the Suez Canal Economic Authority and the General Authority for Investment and Free Zones. The conference discussed the economic opportunities in Egypt and the key sectors of the Egyptian economy, such as energy, tourism, agriculture, and industry. It also highlighted the incentives for the development of emerging financial markets, the reduction of bureaucratic obstacles for foreign investments, the improvement of the legal framework, the strengthening of infrastructure, and the diversification of bond issuance.
All the indicators and expectations confirm that Egypt is on the right track for growth and economic development and has achieved remarkable progress compared to other countries in the past decade.
Therefore, the Egypt Economic Summit is expected to witness the participation of the IR Global network, which specializes in providing professional services, along with the A&B Foundation. Economic expert Mohamed Badr says that this year is a model for promoting the successful and leading role of the government, as well as the impact of the crisis on the digital payments sector, financial inclusion, and digital transformation.
Egypt has taken several measures to restore the confidence of the international community in its economy and has presented a pioneering experience in stimulating the investment climate with a series of new economic laws, such as the investment law, the company law, and the Capital Market Authority law. These laws have made the Egyptian market more attractive for investors, who have realized the interest of the political leadership and the government in attracting more foreign and local investments to the country, as they are one of the main sources of economic growth and improving the living standards of the people.
In addition, Egypt has established the first specialized city for textile industries in Minya Governorate, as well as investment zones in Al-Saf, Giza, Ismailia, Aswan, and free zones throughout the country. An investment zone is also being established in Nuweiba, with an area of one million square meters, which will attract Arab investors.
Egypt has witnessed an improvement in economic indicators, an increase in growth rates, and an increase in total investments in the past two years, as a result of the success of the economic reform program and the efforts to attract good direct and indirect investments and provide opportunities to diversify them. This comes at a time when the world is facing a rise in financing costs, as Egypt ranks tenth in the world as the country with the highest interest rates. There is also a trend to expand non-banking financing tools, which represent the best alternatives for providing investment opportunities, and this contributes to attracting more investments to the Egyptian market.
Egypt has huge investment opportunities, which is reflected in the investment rate, which has been stable since 2014, and there are opportunities to attract huge investments in the future, especially concerning specialized investments. Egypt has 120 industrial companies listed on the stock exchange with a capital worth EGP 770bn, where industrial companies represent more than 40% of listed companies, and the most prominent industrial sectors are chemical, mineral, food, beverage, health, and pharmaceutical. The industrial growth rate also reached 5.6%, and the highest level of industrial investments reached 55% during the current fiscal year.
There are international reports issued indicating an improvement in macroeconomic indicators, according to the International Monetary Fund, during the past month, and that there is an improvement in the growth rate, which reached 5.5%, and is expected to reach 6%. Unemployment rates also fell from 12% to 10.9% and are expected to reach 9% next year.
This comes in light of the continued support for small and medium-sized enterprises provided to young people, giving tax benefits, and facilitating the procedures for licensing the establishment of these companies to provide them with elements of attraction.
Egypt also enjoys competitiveness in the field of human resources in its ability to provide skilled and trained workers in various fields, in addition to competitive wages, which are lower than their counterparts in the world. This is with the emphasis that the workforce in Egypt, which is estimated at 28.8 million workers at the end of the second quarter of 2022, is considered one of the most skilled workers in the Middle East region over several decades.
Egypt is considered the main regional source of skilled labor in several sectors, such as the communications and information technology sector, financial services, and tourism, especially in light of the state adopting national programs to train and prepare skilled workers. Egypt has leadership in sectors that require high skills and service-based sectors such as communications, information technology, and financial services, as wages in these sectors are very competitive and more stable than wage levels in competing countries.
Foreign direct investment flows have achieved remarkable growth. This is as foreign investments reached 10 billion dollars during the year 2022/2023, with an increase of 12.8% compared to the previous fiscal year, and the service sector – education, health, financial and banking services, logistics services, transportation, communications, and others – topped the highest flows in July 2023, with a percentage 33.1%, followed by the construction sector with a percentage of 26.9% of the total investments. However, it cannot be denied that these flows were negatively affected by the ongoing conflict in Ukraine.
But the most important thing that Egypt seeks now is to address the economic and investment challenges it faces, which is represented by facilitating investment procedures within investment laws that were specifically developed to attract international capital and major companies.
Dr Hatem Sadek is a Professor at Helwan University
