Egyptian officials expect that these decisions will improve Egypt’s credit rating and stop the outflow of foreign capital resulting from the Ukraine war crisis.
The most prominent incentives approved by the government and the decisions recently announced by the Central Bank of Egypt to attract investment:
• Adoption of a flexible exchange rate for the pound.
• Raising the interest rate by 200 basis points.
• Cancellation of documentary credits by the end of the year.
• Egyptian President Abdel Fattah El-Sisi announced, on Saturday, the granting of the golden license to advanced investors, which is granted to applicants during the next 3 months to shorten the long procedures for registering investment projects.
• Issuing the State Ownership Policy and the accompanying reforms.
These decisions indicate the government’s direction to grant more facilities to attract foreign investments and support local investment.
During the fiscal year 2021-2022, the proceeds of foreign direct investment jumped by 71 percent to $9.1 billion, compared to $5.2 billion in the fiscal year 2020-2021, and its inflowing sources diversified into sectors, most notably the manufacturing, construction and building industries, communications and information technology.
According to a report by the United Nations Conference on Trade and Development (UNCTAD) last June, Egypt was the second largest country in Africa in receiving foreign direct investment in 2021, after South Africa.
The goal is 10 billion dollars
According to statements by Ahmed Kagok, the Egyptian Deputy Minister of Finance for Fiscal Policies and Institutional Development, the government is making concrete efforts to stimulate and attract investment; To achieve the sustainable development goals of Egypt’s Vision 2030.
He pointed to the impact of the Ukrainian crisis on the massive capital outflow from Egypt and others, but he expected that the matter would change with the improvement of macroeconomic conditions in Egypt and an increase in the flow of funds from the Gulf countries.
In this, he says, the government aims to attract $10 billion annually over 4 years in foreign direct investment.
Standard & Poor’s praised the state’s plan to encourage the private sector, work to promote a fair competition environment in the market, reduce and simplify investment procedures, and issue a document “state ownership policy” in its final form.
The Egyptian Deputy Minister of Finance expects Standard & Poor’s to improve Egypt’s credit rating in light of the foregoing.
Attracting investment factors in Egypt:
• Egypt has a strong infrastructure, which it has spent on developing 400 billion dollars over the past 7 years, to absorb a huge amount of investments, according to Kajouk.
• Diversity of oil and renewable energy sources and their cheap prices.
• Cheap workers’ wages compared to competing economies.
• The recent exceptional decisions to stimulate investment, in addition to a previous decision to give Egyptian citizenship in exchange for investment.
For his part, the deputy of the Egyptian Investors Union, Engineer Alaa Al-Saqati, says that the launch of the golden license increases the attractiveness of the investment climate, especially as it solves 50 percent of the long and sterile procedures.
The golden license allows companies to obtain a single approval to establish, operate and manage the project and licenses to build the project and allocate the necessary facilities.
Al-Saqati believes that the Egyptian government “did everything it could to pave the way for domestic and foreign investment by announcing the recent exceptional decisions,” which means that foreign investments “enjoy tremendous opportunities through strong commercial partnerships between Egypt and many countries of the world, and bilateral free trade agreements, as well as Consider it a gateway to Africa.
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