CAIRO: Egypt is planning around $20 billion worth of projects under the public-private partnership (PPP) scheme as part of an investment stimulus package to boost growth rates.
Mohamed Rahmy, research analyst at Cairo-based investment bank Beltone Financial, stressed the importance of PPP in attracting private sector investment in infrastructure projects, thus easing the financial burden on the government.
“This way the government can redirect these savings into social welfare spending or subsidies or other aspects of priority,” he said. By implementing PPPs, the government also engages the private sector, boosting domestic and economic activity and attracting FDI, both reflecting in higher GDP growth.
Minister of Foreign Trade and Industry and acting Minister of Investment, Rachid Mohamed Rachid said Monday that projects estimated at $20 billion will be carried out under the PPP scheme, Reuters reported. Rachid encouraged UAE investments in these sectors as he met with representatives of UAE banks and corporations in Abu Dhabi.
Rachid also met with insiders in the food, building materials, housing, energy and infrastructure industries.
The General Authority for Investment will establish a special apparatus to promote these projects in the Gulf states, according to a statement on the investment ministry’s website.
Rahmy said that the potential benefits of the PPP projects will depend on how strict and beneficial regulations are in protecting the interests of citizens while ensuring revenue for the private sector.
According to the website, Sheikh Mansour bin Zayed said several UAE corporations and finance institutions are looking forward to investing in different sectors in Egypt.
“The UAE particularly has always had a very small share in Egypt’s FDI varying from 3–5 percent, but this is a very positive move from the government to go into FDI talks with countries like the UAE,” said Rahmy, which have more favorable economic outlooks than the usual investors from Europe.
Rachid said Egypt will implement a number of infrastructure projects for roads, water, drainage, energy and ports, and is preparing a new package of measures to make the investment climate more attractive within the context of the economic reforms adopted by the government to increase competitiveness and remove bureaucracy in the internal market.
Growth rates are witnessing an upward trend, hitting 5.6 percent in the first quarter of the current fiscal year with a target of 6 percent by the end of this year, Rachid added.
Beltone expects FDI to be $8 billion for 2010/11 fiscal year — up from $6.8 billion last year — and Rahmy said that this increase in FDI is an indicator of the positive regulation and investment climate reforms and general economic outlook.
