Interview: EBRD says Egypt has now suitable climate for investment
The European Bank for Reconstruction and Development (EBRD) is very optimistic about the future of the Egyptian economy, said Janet Heckman, Managing Director for the Southern and Eastern Mediterranean region, told Amwal Al Ghad in a recent interview.
“The European Bank … believes that the time is right for investment,” said Heckman.
“Investors in Europe and the rest of the world are looking at the Egyptian economy very favorably at the moment, especially since we rarely find a country with the population of 92 million people without ever going through a recession like Egypt,”
Following the decision to float the Egyptian pound, international companies have seen Egypt as a good place to invest, especially manufacturing goods given its geographical location and reforms implemented by the government, she added.
The government is negotiating on international trade agreements with many countries worldwide, which would allow investors to export their products to all parts of the world and to their markets in other continents across the globe, EBRD official said.
Heckman commended the government’s reform decisions such as floating the local currency, issuing the new investment law, and reducing subsidies to improve the investment climate in Egypt. She pointed out that the number of projects currently being implemented in Egypt is unique, as in few places around the world are experiencing the same rate of investment.
She referred to her meeting with the Suez Canal Authority President and Head of the Economic Zone, Mr. Mohab Mamish, to discuss investment opportunities available in the Suez Canal in light of the interest of foreign companies in this region.
“As for the challenges facing investors in Egypt, it is essential that the Ministry of Investment continues to reform in order to provide an enticing environment for investors. Reducing bureaucracy should be a priority for the Egyptian government to attract foreign investors, providing licences and approvals for factories should be easier to obtain because they are critical. Egypt should look at countries like Georgia that have succeeded in removing bureaucracy. ”
Heckman advised the government to continue reform, citing the government’s pursuit of World Bank standards for doing business. It is therefore important that the government’s efforts continue to make Egypt within the top 50 countries in the list of best countries for doing business, since companies around the world have a choice to pick where to invest. Egypt should place itself as part of the countries where it is easy to invest.
Only 20% to 30% of the European Bank’s portfolio in Egypt is involved in the public sector, the rest is private sector. Especially since the bank places the private sector as its priority in all countries. The bank has signed €600 million worth of projects across economic sectors in the Egyptian economy.
Heckman said that the key areas of the bank’s investments for the current year are focused on solar energy and renewable energy, noting that the bank has allocated $500 million to support the solar programme in Egypt. The bank is scheduled to sign with 16 different companies in this field.
A support for small and medium-sized businesses is an essential part of the bank’s strategy in Egypt. Heckman said that the bank is negotiating with some local banks to provide loans to SMEs, programmes for women in business and for energy efficiency, as well as advising 600 small companies over the past four years. The bank has the potential to contribute to the capital of any of the banks in the Egyptian market, pointing that the bank seeks to reach the size of investments in Egypt to about €1 -1.3 billion before the end of the year.
The bank’s investments in Egypt next year will increase if the government continues its reform plans, pointing out that the bank is working on coordination between Egyptian and foreign companies to provide support and enhance the required skills needed by small and medium-sized companies such as production methodology, how to apply international standards and how to bid, the appropriate export markets and the provision of industry information related to agribusiness, textile, manufacturing, hospitality or tourism.
Heckman highlighted the intention of the bank to expand in Egypt through the opening of a new office in Alexandria on November 2nd, becoming the first international institution to open an office outside Cairo. She explained that the office will provide services to companies in Alexandria and the North Coast as well as support small and medium enterprises.
Heckman also announced the bank’s intention to hold its Summit Investment forum in Cairo under the sponsorship of the Egyptian government on November 14th. The forum will gather investors from all over the globe. Heckman confirmed that Egypt is the second largest beneficiary of the European Bank’s assistance out of a total of 36 members.