Cairo – Egypt issued a set of decisions to attract and encourage investors, which were described as "revolutionary", in light of internal and external criticism due to the investment-repelling climate.
During its meeting last Tuesday, chaired by Egyptian President Abdel Fattah El-Sisi, the Supreme Investment Council approved 22 decisions in various economic sectors and fields, aimed at achieving a quantum leap and improving the investment environment.
The Council is the highest authority concerned with investment affairs in Egypt, chaired by the President of the Republic, and the membership of each of the Prime Minister, the Minister of Defense and Military Production, the Governor of the Central Bank, a number of ministers, the head of the General Intelligence Service, the heads of a number of economic and investment bodies, and the Executive Director of the Egypt Fund. Sovereign, Chairman of the Board of Directors of the Federation of Egyptian Industries, and President of the Egyptian Federation of Investors Associations and Institutions.
Redraw the investment map
Al-Sisi stressed – during the meeting – that "the state is keen, through these decisions, to achieve a real breakthrough in attracting, encouraging and promoting domestic and foreign investment, eliminating bureaucratic obstacles, and overcoming various challenges facing increasing private sector investments, with the aim of building a diversified production base and achieving economic development." comprehensive".
The decisions included unprecedented incentives and facilities in order to create an attractive climate for investments in various sectors, including:
- Reducing the cost of establishing companies.
- Reducing restrictions on incorporation.
- Facilitate land acquisition.
- Enhancing governance, transparency and impartiality in the Egyptian market.
- Facilitating the import of production requirements and allowing the foreign investor to be registered in the importers register.
- Reducing the financial and tax burdens on investors.
The investment community, industry and trade in the private sector, and local economists appreciated the new decisions, describing them as historic, decisive and bold, which would bring about a quantum leap in the local investment environment and send messages of encouragement to investors at home and abroad.
These decisions, which found positive echoes in the financial and business community in Egypt, came days after controversial televised statements by businessman Samih Sawiris regarding the investment climate in the country, describing it as discouraging and discouraging.
Sawiris revealed that he had stopped entering into new investment projects, saying, "How do I know if the project will win or lose?" profitability or feasibility.
In addition to the existence of more than one price for the dollar, Sawiris enumerated other reasons that do not encourage entering into new investment projects, such as not knowing how to save the dollar inside and outside the country, not knowing his ability to import raw materials or not, and his inability to do a feasibility study for the project, As well as bureaucratic and complex procedures.
In 2019, the Egyptian authorities abolished the Ministry of Investment in the ministerial reshuffle at the time and added it to the duties of the prime minister, claiming an attempt to overcome the problem of the constant overlap between the investment minister and the rest of the ministers and the lack of coordination.
Samih Sawiris : I stopped my investments in Egypt , and Mustafa Bakri is angry! pic.twitter.com/mEDZHaGOvZ
– Hashtag program (@ajmhashtag) May 3, 2023
Stability precedes decision
Professor of Finance and Investment at Cairo University Hassan Al-Sadi praised the recent decisions of the Supreme Investment Council, considering them "an attempt to catch up with neighboring countries such as Saudi Arabia and the UAE, which preceded in the field of creating an attractive climate for foreign direct investment."
Al-Sadi said – in his speech to Al-Jazeera Net – that "the most important among the new facilities is seeing economic stability and not just facilitating business performance. The investor wants one exchange rate, not multiple, and to be able to anticipate tomorrow, and know how he will recover his profits or capital at the end of a period." Invest it in order to succeed in preparing realistic and accurate feasibility studies.
The most important point in the feasibility studies – according to Al-Sadi – "is how to exit and not enter, in addition to that, the investor looks with concern at the risks of lowering the credit rating of any country, and this does not attract foreign investment, and the current situation is bleak with regard to the multiplicity of exchange rates, high interest rates, and increase inflation rates.
between 2016 and 2023
In November 2022, the Egyptian Council of Ministers approved a draft decision by the President of the Republic to form the "Supreme Council for Investment" and its work system, as part of the government's efforts to liberate the local economy from state tutelage, in response to the directives of the International Monetary Fund.
These decisions are the first of their kind, although the date of the establishment of the Supreme Investment Council dates back to October 2016 by a decision of President Sisi, and after its first meeting it issued about 17 decisions that included tax exemptions and many facilities in licensing procedures, the speed of granting approvals, and the settlement of disputes. Complaints and periodic reporting.
Among the tasks that were entrusted to the Council itself in 2016 was to review the investment policies of the state, set the general framework for legislative and administrative reform of the investment environment, follow up on updating the investment map and its implementation at the level of specialized sectors and different geographical regions, remove all investment obstacles, and follow up mechanisms for settling investment disputes.
Capital market expert Dr. Wael Al-Nahhas said, "It's like yesterday night. Everyone remembers the first meeting of the Supreme Investment Council in 2016 and its extraordinary decisions to facilitate the investment environment, but since then we have not heard about the council except when it was reconfigured before the end of last year."
Al-Nahhas added to Al-Jazeera Net, "The recent package of decisions addresses the International Monetary Fund, in the first place, in preparation for the round of conducting the periodic review of the economic reform program, which was supposed to be completed last March."
However, Al-Nahhas stressed the importance and necessity of amending some articles, regulations, and laws that impede the investor and divert him from investing, and with regard to the rest of the decisions, he described their formula as constructive and repeated before.
Al-Nahhas expressed his hope that the Supreme Investment Council would announce its permanent meeting to meet the needs and inquiries of investors 24 hours a day, speed decision-making, and solve problems, and above all, the investor's clarity of vision and the stability of the country's economic and financial situation.