Hassan Abdel Zaher is a Cairo-based contributor to The Arab Weekly.

  • Egypt’s investment hopes clash with harsh realities, On: Sun, 21 May 2017

  • Dismay in Egypt as al-Azhar reform fails to materialise, On: Sun, 14 May 2017

  • Pope Francis’s visit boosts morale of Egypt’s Christians, On: Sun, 07 May 2017

  • Umrah no longer affordable for Egypt’s poor, On: Sun, 07 May 2017

  • Turning the Suez Canal Economic Zone into a magnet, On: Sun, 30 Apr 2017

  • In Egypt, polygamy has its apologists and nemeses, On: Sun, 30 Apr 2017

  • Economists, rights advocates concerned over Egypt’s state of emergency , On: Sun, 23 Apr 2017

  • ISIS attacks exacerbate Egypt’s daunting challenges , On: Sun, 16 Apr 2017

  • Egypt may need more than state of emergency , On: Sun, 16 Apr 2017

  • New budget augurs fiscal gloom in Egypt, On: Sun, 16 Apr 2017

  • Egyptian Minister Abdel Ghaffar: There is ‘will’ to rescue scientific research, On: Sun, 09 Apr 2017

  • Key Egyptian legislator says poverty more dangerous than terrorism , On: Sun, 26 Feb 2017

  • Egypt minister defends borrowing strategy, On: Sun, 05 Feb 2017

  • Egypt’s Planning minister upbeat about future, On: Sun, 29 Jan 2017

  • The newly emerging face of terrorism in Egypt , On: Sun, 25 Dec 2016

  • Egypt’s population growth cause for concern, On: Sun, 18 Dec 2016

  • Egypt’s minister advocates ‘fighting terrorism through education’ , On: Sun, 04 Dec 2016

  • Egypt, West reaching deadlock over Libya?, On: Sun, 13 Nov 2016

  • Egypt-Ethiopia tension set to rise , On: Sun, 23 Oct 2016

  • Rights advocate sceptical about role of Egypt institutions , On: Sun, 16 Oct 2016

  • Egyptian Finance minister: Reform ‘must start today, not tomorrow’, On: Sun, 11 Sep 2016

  • Reconciliation offered to Mubarak regime figures who repay state , On: Sun, 28 Aug 2016

  • Egypt, Turkey: Can they still make up? , On: Sun, 28 Aug 2016

  • Egypt’s church-building bill is milestone for Copts , On: Sun, 21 Aug 2016

  • Housing mostly unaccessible in Egypt, On: Sun, 07 Aug 2016

  • Egypt mulls flexible monetary policy, On: Sun, 24 Jul 2016

  • Egypt warming up to natural gas prospects, On: Sun, 03 Jul 2016

  • Egypt TV drama reflects artistic decline, On: Sun, 26 Jun 2016

  • Fears mount in Egypt as foreign debt keeps rising , On: Sun, 12 Jun 2016

  • Authorities see religious schools promoting extremism , On: Sun, 29 May 2016

  • Egyptian writer faces jail, triggering calls for legal reform , On: Sun, 29 May 2016

  • Egypt maintains subsidies despite deficit , On: Sun, 08 May 2016

  • Cairo and Riyadh striving for a ‘win-win’ relationship, On: Sun, 17 Apr 2016

  • Cairo and Riyadh build on common interests, On: Fri, 08 Apr 2016

  • Egypt wakes up to Nile dam fait accompli , On: Fri, 08 Apr 2016

  • Egypt’s north-western coast promises to become tourism magnet, On: Fri, 25 Mar 2016

  • Egypt-Hamas showdown coming, On: Fri, 11 Mar 2016

  • Egyptian women defy bias, achieve success, On: Fri, 04 Mar 2016

  • Cairo-Riyadh tensions pile up over Syria, On: Fri, 26 Feb 2016

  • Egypt’s investment hopes clash with harsh realities

    Egypt’s new investment law, approved by parliament on May 7, was more than two years in the making.

    ‘Good step.’ Headquarters of the National Bank of Egypt (NBE) in Cairo.


    2017/05/21 Issue: 107 Page: 19



    Cairo - Egypt is hoping that a long-awaited investment law will remove hurdles to the flow of foreign capital and simplify investment procedures but economists said it would take more than new legisla­tion to attract investors.

    “The law is a good step, which re­flects the government’s keenness on improving the investment climate here but other things are needed for investors to come,” said econo­mist Amr Hassanein. “For investors to come, they need infrastructure, transparency and a sound monetary system.”

    It is hoped that Egypt’s invest­ment law, approved by parliament on May 7 after more than two years in the legislative process, will stimu­late economic growth.

    The legislation offers investors unprecedented tax and customs exemptions, price breaks on land in some areas and paid-for infrastruc­ture development. Investors placing industrial projects in investment-deprived areas, including southern Egypt, would be repaid half the amount they paid for land used by the projects if they start production within two years after getting the land.

    The government would pay for technical training of work­ers in industrial projects and in­vestors would be allowed to hire foreigners for up to 20% of their total workforce.

    By Egyptian standards, the in­centives are revolutionary. Invest­ment and International Cooperation Minister Sahar Nasr said the entice­ments were designed to turn Egypt into a foreign investment magnet.

    The new law sought to simplify investment procedures, boost trans­parency, accelerate the resolution of investment disputes and boost gov­ernance, she said in a statement.

    However, some local economists faulted the measure for giving away too much.

    Egypt, which has received tens of billions of dollars in aid from the oil-rich Gulf states over the past three years, is seeking to generate new investment at a time when aid is de­clining.

    Egypt has a poverty rate that is on the rise (27.8%), a high unem­ployment rate (12.5%) and high in­flation (32.5%). New investment is indispensable to addressing these problems and boosting economic growth, economists said.

    “You cannot make the economy grow, create jobs or reduce poverty without investment,” said Bassant Fahmi, a member of parliament’s Economic Committee. “Invest­ments are a matter of life or death for our country.”

    Egypt’s economy grew 3.9% in the 2016-17 fiscal year, which will end in July, up from 3.6% growth the pre­vious fiscal year. The government hopes the economy will grow 5% during the 2017-18 fiscal year and in­vestment represents a central pillar of its growth plan.

    In the first half of the current fis­cal year, foreign direct investment stood at $4.3 billion, representing a 39% rise compared to the same pe­riod of the previous financial year.

    To reduce poverty and unemploy­ment and hit economic growth tar­gets, Egypt needs to attract foreign investment of up to $15 billion in the 2017-18 fiscal year, Finance Minister Amr al-Garhi said.

    However, it is very possible that Egypt will meet these targets, econ­omists said, given its untapped in­vestment potential.

    “Look at the economic map and you will get to know those vast opportunities are available here,” Fahmi said. “Egypt is a huge market and has a location that makes it an important link between Africa, the Arab region and Europe.”

    Egypt also wants to invite inves­tors’ attention to what it describes as the drivers of its economic devel­opment.

    The Egyptian government is par­ticularly touting the Suez Canal project as an investment magnet. It aspires to attract billions of dollars in investment in shipbuilding, ship maintenance, industrialisation and logistics.

    Oil and gas are also promising fields with recent natural gas dis­coveries expected to bridge the gap between production and consump­tion when they come online this year and later produce enough to be exported.

    Egypt is also inviting internation­al mining companies to explore its eastern desert amid expectations that gold is present in relatively large amounts.

    Nonetheless, economists said in­vestors would not turn to Egypt un­less the country also takes steps to address administrative corruption and improve transparency.

    Egypt was ranked 116th out of 140 countries in the 2015-16 Global Com­petitiveness Report produced by the World Economic Forum. It came in 122nd in ease of doing business in the World Bank’s Doing Business Report 2016.

    “Laws are not everything but when it comes to actual practice, investors need easy administrative procedures, a transparent legal sys­tem and local administrations free of corruption,” Hassanein said. “So, it is necessary that our government addresses problems in these sectors to make the law more effective.”

    Editors' Picks

    The Arab Weekly Newspaper reaches Western & Arabic audience that are influential as well as being affluent.

    From Europe to the Middle East,and North America, The Arab Weekly talks to opinion formers and influential figures, providing insight and comment on national, international and regional news through the focus of Arabic countries and community.

    Published by Al Arab Publishing House

    Publisher and Group Executive Editor: Haitham El-Zobaidi, PhD

    Editor-in-Chief: Oussama Romdhani

    Deputy Editor-in-Chief: Dalal Saoud

    Senior Editor: John Hendel

    Chief Copy Editors: Jonathan Hemming and Richard Pretorius

    Analysis Section Editor: Ed Blanche

    Opinion Section Editor: Claude Salhani

    East/West Section Editor: Mark Habeeb

    Levant Section Editor: Jamal J. Halaby

    Gulf Section Editor: Mohammed Alkhereiji

    Society and Travel Sections Editor: Samar Kadi

    Senior Correspondents:

    Mahmud el-Shafey (London)

    Lamine Ghanmi (Tunis)

    Correspondents

    Saad Guerraoui (Casablanca)

    Dunia El-Zobeidi (London)

    Roua Khlifi (Tunis)

    Rasha Elass - Thomas Seibert (Washington)

    Published by Al Arab Publishing House

    Contact editor at:editor@thearabweekly.com

    Subscription & Advertising: Ads@alarab.co.uk

    Tel 020 3667 7249

    Mohamed Al Mufti

    Marketing & Advertising Manager

    Tel (Main) +44 20 6702 3999

    Direct: +44 20 8742 9262

    www.alarab.co.uk

    Al Arab Publishing House

    Kensington Centre

    66 Hammersmith Road

    London W14 8UD, UK

    Tel: (+44) 20 7602 3999

    Fax: (+44) 20 7602 8778

    Follow Us
    © The Arab Weekly, All rights reserved