Foreign investors in Egypt are at risk of having their assets re-nationalised, and companies operating in the country should have contingency plans in place in case local courts re-nationalise foreign-owned properties that were acquired in the past 15 years, Ceemea Business Group, which covers central and eastern Europe and the Middle East and Africa, said in a recent report. According to Nenad Pacek, the co-founder of Ceemea Business Group, the “lack of clarity on where the country is going politically”, has led a group of local activists and lawyers to allege that assets sold to investors under the regime of former president Hosni Mubarak must be handed back to the government.

“The revolution happened and some local activists opened old files of privatisation deals done more than a decade ago, and they challenged them in local courts,” Mr Pacek said. “This is not as alarming as it sounds at this stage, but if it is not monitored by authorities, it could potentially escalate, creating a lot of negative publicity for Egypt.”

A series of rulings made by Egyptian courts in the past 18 months, to order a few privatised foreign companies to be re-nationalised, caused an outflow of FDI worth $5bn in the past six months, according to Ceemea. Although the country’s current prime minister, Hesham Kandil, assured investors that contracts made under Mr Mubarak’s privatisation programme will be respected, Mr Pacek maintained that investors are becoming worried.

“The sentiment at this stage is one of concern,” he said. “This has prompted a few to be in a wait-and-see mode when it comes to new investment decisions. They also want to see what will happen in the economy, and with regards to political security.”

With Egypt’s foreign currency reserves having fallen by 64% to $13bn since the 2011 political uprisings, the country’s main sources of foreign exchange have been under pressure. Although the International Monetary Fund is expected to finance some of the country’s needs, subsequent austerity measures – which will include an overhaul of public subsidies – could derail the country’s fragile security. For Mr Pacek, this is leading many companies to reconsider Egypt’s status as a greenfield destination in north Africa.

“Egypt was, before the revolution, an extremely popular location for manufacturing, research and development, and shared services,” he said. “But companies that were thinking of Egypt as a greenfield manufacturing location are now asking questions such as ‘what if, in the future, a local court challenges us and tells us a piece of land belongs to the state?’ [These court cases] could impact on acquisition deals which are currently in the pipeline, and future investments. This should not be neglected and it would be good [for policymakers] to put in place a meaningful process that gives investors a chance to argue their case.”