A delegation of executives and Egyptian representatives met with policy-makers and business leaders in Washington, DC, in late June, to promote FDI in Egypt. The visit was the first by a business delegation following Egypt's presidential elections in May.
Several large multinational companies have announced investments in the country in recent months. On June 23, Swiss food and beverage company Nestlé opened its first-ever confectionery plant in Egypt, following more than $9m of investment in the project. In March, US-based Coca Cola Company announced that it would be spending $500m on capital expenditures, and commercial and community programmes over the coming years. US-based consumer goods company, Procter & Gamble, also plans to continue to invest in its facilities in Egypt.
“These investors know Egypt and its potential,” said Ahmed Abou Ali, founding partner at law firm Hassouna & Abou Ali. “They are bullish in terms of the new government.”
Tarek Tawfik, vice-chairman of the Federation of Egyptian Industries, pointed out that, in the past couple of weeks, Egypt’s investment law has been redrafted to encourage even more investment in Egypt. “This comes along with several positive efforts to cut down Egypt’s deficit from 14 to 10%,” he said.
In late June, Egypt's new president, Abdel Fattah al-Sisi, refused to agree to a 2014/15 budget proposal, which he saw as permitting subsidies that would distort Egypt’s economic progression. Instead, he called for deeper austerity programmes and reforms to aid the ailing economy. “It seems the new administration is intent on addressing the serious inherent problems in the economy,” Mr Tawfik said.
Since June, the new administration has been sharing proposals for amendments to laws with the chambers of commerce and other relevant parties within the country. “For example, there’s a proposed new investment unified investment law that is being examined and drafted that would give opportunity for the business community to voice and give feed back to the government,” said Mr Ali. “Also, there are discussions regarding changes in the tax law and a proposed new tax on distribution of profits and investor gains from the stock exchange.”
Egypt’s unemployment rate remains high at 14%. Mr Ali stressed that investment in sectors such as textiles, agriculture, food and chemicals would create a lot of employment. “Investment in new technologies that would reduce the cost of labour is not in line with the country’s social needs,” he said.