New legislation to be introduced to current parliament session to remove some obstacles to investment
ALEXANDRIA: Alexandria Businessmen s Association Chairman Mohamed Ragab called on the Ministries of Investment and Housing Tuesday to reconsider their joint Unified Construction Law proposal, due for submission to parliament s current session, to ensure it addresses the unnecessary complications now faced by investors.
Ragab listed a host of problems, from the required bribery of government employees to the almost 20 primary approvals required to obtain building permits, at the one-day International Finance Corporation (IFC) Business Start-Up Simplification Conference. The event marked the halfway point of IFC s 2005-launched partnership with the governorate of Alexandria and the General Authority for Investment and Free Zones (Gafi) to reduce business start-up procedures.
What happens is investors are welcomed with open arms in Egypt but are then faced with numerous complications that could take months, even years to resolve, said Ragab, who doubles as chairman of Ragab Group.
In September, IFC s annual Ease of Doing Business report ranked Egypt among the bottom 10 out of 175 countries and last in the Mena region after rating 10 areas of doing business in each economy under study, including starting a business, obtaining licenses, employing workers and obtaining credit.
Ragab complained of government employees lack of accountability and professionalism, and the approvals required to obtain construction permits including agricultural, archaeological, environmental, military and civil defense. All are factors, he said, which are driving local and international investors away.
According to the Industrial Development Authority (IDA), a Gafi affiliate, business registration and licensing procedures, including property registration and acquisition of building permits, used to require an average of 277 days and six steps for completion. In the past year, IDA Chairman Amr Asal says the organization lowered the numbers to 135 days and four steps and is now working toward 45 days and three steps.
Ministry of Housing Undersecretary Hussein El-Gibaly said the yet to be submitted construction legislation has been reworked to reduce bureaucracy.
Most of Mr. Ragab s concerns have been addressed in our Unified Construction Law proposal including the One-Stop Shop for property registration, El Gibaly said. We have a law that will guarantee building safety and reduce procedures as much as possible.
Gafi Chairman Ziad Bahaeddin agreed with Ragab that more needs to be done to simplify the interaction between the government and private sector. Gafi s 2005 launch of one-stop business registration has already addressed some of the problems, he added.
We are continuously developing our one-stop services to include more from different government authorities, Bahaeddin told The Daily Star Egypt. Now we are working with the Foreign Ministry to simplify the endorsement of foreign investor paperwork. It will just be a matter of time for us to continue growing.
Minister of Administrative Development Ahmed Darwish said the trend of current government efforts to be reflected in future business procedure-simplifying reforms is to place more trust in investors and gradually abolish the old system of constant regulation. Reforms, he added, will allow the government to draft common laws to be signed by potential investors instead of commissioning regular enforcement committees.
Why can we not use a sampling system to enforce our laws? Why do we have to presume all people are guilty until proven innocent? said Darwish. We ve chosen investment as the way for our development, so we have to remove all obstacles facing it.
The IFC Alexandria project is now at the recommendations stage where it will aim to reduce construction permit acquisition time to 100 days and cut in half the 60 days now required to obtain operation licenses, according to Project Manager Sherif Hamdy.
IFC is the financial arm of the World Bank Group. The company s Middle East division provides funding and technical assistance services to boost private sector involvement in 19 countries stretching from Morocco to Pakistan. In 2005, IFC invested $650 million in 26,000 businesses across the region out of $6.5 billion in total global investment.
