The Egyptian government is more focused on attracting foreign direct investment rather than aid and the forthcoming Egypt Economic Development Conference, or EEDC, this month is expected to help boost FDI into the country.
This was shared by EFG Hermes chief executive officer Karim Awad during an exclusive interview with Khaleej Times on the sidelines of the recent 11th annual EFG Hermes meeting in Dubai.
Last year, the country received $4 billion in FDI and this year it is expected to attract $8 billion, according to Egypt’s Investment Minister Ashraf Salman. The country has obtained $23 billion in aid from the UAE, Saudi Arabia and Kuwait in the 18 months since president Mohamed Morse was ousted, according to the minister.
Awad said: “I think the government is more focused today on bringing foreign investment to Egypt because the investment will create sustainable employment.”
Egypt’s growth stood at around 3.2 per cent during 2013-14, while unemployment currently stands at 13 per cent and inflation is hovering around the 10 per cent mark.
“Today the government is quite focused on providing the proper infrastructure whether in terms of power, road, water or other areas to make sure that the country is attractive enough for investment from infrastructure perspective,” Awad explained.
EFG Hermes, Egypt’s biggest listed investment bank, is helping the government of Egypt for attracting key investors to the country in the EEDC, which will take place in the resort town of Sharm El-Sheikh on March 13–15.
More than 1,000 of a total of 6,000 potential investors invited to attend the conference have already signed up for the event and the figure is expected to rise to around 2,000 as the start of the conference nears. The economic summit is more likely to see heavy involvement from Gulf investors.
“We are proving assistance in terms of packaging the project for the coming conference. The government has a number of ambitious projects that it intends to show during the course of the conference,” Awad said.
Egypt will present 30 different investment projects worth a total of $20 billion at the Economic Summit. Widely viewed as a make-or-break conference on Egypt’s journey back to rapid economic growth, the EEDC is a chance to prove to the region and the world that Egypt is on the right path.
“Given our role as the largest investment bank in the region and our reach in a number of important Arab countries that are looking to investment into the country we were asked to help and we are happy to do it,” he explained.
“Our main focus is to help the government as much as possible in the upcoming economic summit that will be open to all types of investors including UAE investors.”
“We are very bullish on Egypt. We believe the country is good for investment as it has all the right demographics such as skilled labour, well educated professionals and all the factors that should be attractive to investors,” he said.
Responding a question about key sectors for foreign investors, he replied: “I think there are a couple of important sectors that are important from our perspective. One is the consumer sector, so anything related with demographics of Egypt is something highly interesting to a number of investors across the world.”
The other sector that is right for investment in Egypt is infrastructure, he said, adding: “Whether it’s conventional power or renewables it is another sector which is on the radar screen of a lot of investors as well as the radar screen of the government sector itself today.”
Half the projects Egypt will propose at the March summit will be in the energy sector, according to the government. Egypt clinched 15 new exploration deals in January and close major tenders to import liquefied natural gas from Algeria to Russia.
After energy, the government is looking to attract investment in a number of other key sectors including manufacturing, real estate, petrochemicals, and tourism. Awad said that tourism is also an important sector where Egypt has been blessed with so many good things on that front.
Egypt is working on a new investment law and Awad said the law should give investors a lot of comfort regarding their investments in Egypt.
Awad said that several IPOs are in the pipeline in Egypt this year but said GCC will see this activity in the second half of the year.
“We are currently working on one and hopefully another will come to the market very soon. We believe that there are a number of other opportunities that will be well received by investors during 2015 for sure.”