Minister of Investment to Amwal Al Ghad:
The Egyptian Minister of Investment Osama Saleh asserted that his ministry is focused on making legal and legislative reforms as well as easing the investment process, seeking to allure and develop new projects to the local market. It also aims to assist the investors in the selection of the optimal areas to invest in as pursuant to the investment roadmap.
The Minister, in an exclusive interview with Amwal Al-Ghad, speaks about the ministry’s plans to attract foreign investments worth more than $ 4 billion within the fiscal year 2013-2014. In addition, it targets signing contracts with new investors from the Arab Gulf during the upcoming Egyptian-Gulf investment conference which will be held on December 4th and 5th, 2013.
The current government is restructuring its policies in order to support the state’s institutions in the upcoming period through increasing its resources and investments, Minister Saleh added.
He denies claims that the government is currently unstable and hence, unable to make decisions.
How does the ministry plan to attract investments in the Egyptian market?
The investment ministry is seeking to allure new investments in the Egyptian market for the meantime through focusing on making legislative and legal reforms besides easing the investment process and assisting the investors in the selecting the optimal projects that would boost the national economy. This would be as pursuant to the ministry’s investment plan which includes several projects across the nation that would diversify options for investors.
In addition, the ministry is also offering investors the opportunity to finance in a number of small and medium sized projects in several sectors, notably in food, technology as well as large projects such as the development of the Suez Canal zone and the new road connecting Upper Egypt with the Red Sea.
What are the main aspects of the targeted legislative and legal reforms?
The ministry is reforming a set of laws for the General Authority for Investment (GAFI), aiming to attract investments in cooperation with the Egyptian Exchange and the Egyptian Financial Supervisory Authority.
These reforms include making amendments to the existing investment law on the settlement and reconciliation with businessmen in order to reinforce the relationship between the state and the investors afterwards. Also, the ministry is seeking to amend the existing law on bids and tenders since it allows government officials to utilize their positions to make investments easier for certain individuals.
How did the ministry ease the regulations and processes for investors?
The regulations and processes are being modified and work on incorporating new technologies. By 2014, the ministry will complete the development of an electronic registration system and will also enable investors to obtain temporary licenses. Regarding land ownership, the agriculture, tourism or industrial sector would be handling this issue directly with investors in order to guide them to choose the optimal areas and sectors for investment.
How do you assess the previous years’ investment rates?
The reform program was launched in 2004 with investments in the private sector that amount to 46 billion pounds. This has been gradually increasing to reach 154 billion pounds in the fiscal year 2012 – 2013. This affirms that the Egyptian market is capable of attracting investments even in the turbulent past two years. Investments currently stand at 7%; this is a considerably low figure but a positive indicator to the market’s ability to attract investments.
For the foreign investment rates which started in 2004 amounted to $2 billion, then they gradually increased to $ 2.2 billion during the year of January Revolution, to hit $ 3 billion in the fiscal year 2012-2013.
What about the targeted volume of net foreign investments within 2013 – 2014?
The ministry is currently targeting volume of net foreign investments of $four billion. This would be obtained through the different measures implemented by the ministry that include regaining foreign investor trust in the Egyptian market and alluring new investments.
How do the free zones play a role in attracting foreign investments?
The free zones allow foreign investors to operate in Egypt with specified agreements and conditions. Therefore, the ministry plans to develop several zones in the areas of eastern Port Said and South Sinai to boost investments and productions in these areas.
What are the latest developments in the restructuring of public sector companies?
The restructuring of the public sector would completely change the structure of the Egyptian economy. Our objective is to avoid further losses in this sector and align these companies with Egypt’s economic roadmap. The ministry aims to enlarge the sector’s reach and impact on the citizen. Current studies by the ministry include reforms in the textile industry, which incurs losses representing an economic burden on the government. The ministry seeks to allow textile investments to reach 6 billion pounds. Reforms are being assessed carefully in order to decrease their effect on the employees of these industries.
What is your stance towards claims that the Biblawi’s government is instable?
The government is the exact opposite; it is currently implementing policies that strengthen the state and its institutions to enable them to face the challenges of this period. The current government is attempting to maximize the state’s investments and resources. Therefore these claims are completely unrealistic.
How many companies have been founded by the current government so far?
The government established nearly 1642 companies during the months of July, August and September. In order to provide job and investment opportunities, it is currently working on utilizing its resources to establish more companies in the near future.
Will the ministry grant foreign investors any privileges over others in attempts to boost FDI?
The ministry does not and will not offer any privileges to investors other than high quality service. This includes efficient processes compared to the past as well as reducing the investment risk factor.
What about the ministry’s strategy regarding the stamp tax on bourse transactions?
A legal team from the Ministry of Investment is currently analyzing the effects of imposing a tax on stock trading. The Ministry will present the economic ministers the results and accordingly, decisions would be taken collectively. We are committed to remove all barriers that face investors in the market.
How do the ministry and Egyptian Exchange plan to cooperate regarding companies interested in stock investments?
The ministry is currently in discussions with two companies from the petroleum and financial sectors who are interested in selling shares; they plan on releasing IPOs by the end of this year. This is a primary example of cooperation that would revitalize the stock market.
Could you please tell us more about the Egyptian-Gulf investment conference that is scheduled to take place in Egypt next December? Who are the participating countries?
The conference is one of the strategies used by the ministry to attract investors; it will be held on the 4th and 5th of December. It aims to promote the large-scale projects the government is currently developing. Pending investment contracts with several Gulf States would be finalized during this event.
The most prominent participating countries include the UAE, Kuwait, Saudi Arabia and Bahrain.
Several economic conferences have beenheld during the past years. Do you believe that these conferences have fulfilled their purpose? How would you rate them?
All conventions held with the purpose of investment promotion have been crucial to the development of the economy. One of the primary drivers behind holding these events is to create a platform for dialogue between the government and investors. They are also opportunities to promote Egypt to the world apart from biased media outlets.
Which Arab nations invest in Egypt today?
Saudi Arabia is ranked first followed by the United Arab Emirates and Kuwait. The investments of these nations have been very diverse and are most prominent in the fields of retail, tourism and real estate.
What is the feasibility of establishing a common Arab-African market? What role would Egypt play in this?
This proposal would benefit all states economically, however, it requires cooperation and willingness from all parties involved. Establishing an Arab-African market is a natural progression to the upcoming period due to geographical and economic reasons. The African market also has resources that could further develop along with Arab economies if investment cooperation occurs.
Egypt plays a pivotal role in the Arab world and Africa through the strong ties it has developed. This role would enable Egypt to strengthen the cooperation between the two markets.
