Egypt committed to Foreign Investment

Authorities affirm FDI commitment with recent concerns surrounding the financing of Arabtec’s housing project.

The ambitious one million home project being developed by the UAE’s Arabtec is facing complications surrounding funding amid the Egyptian governments’ desperate attempts to boost foreign investment (FDI).

It was initially reported that the project would be financed through a combination of foreign and local banks, but now the authorities are raising concerns saying that the conditions of the deal entail a funding strategy that brings in money from abroad to help buoy the country’s foreign direct investment.

Egypt faces an ailing housing problem, and failure to start this project could be disastrous for a government that has used this as a symbol of its commitment to social development.

The recent comments serve as a clear indicator of the government’s commitment to its FDI objectives ahead of the investment conference.

Similar situations have been seen in North Africa and Syria before, where foreign developers fell out with local authorities after pursuing finance packages through local institutions rather than bringing in funds from abroad in order to boost foreign direct investment.

Foreign investment has been at the forefront of Egypt’s new economic ambitions, it decreased drastically under former president Hosni Mubarak, and since then, foreign aid has balanced the country’s economy. The new government is committed to moving away from relying just on aid and concession loans and towards attracting direct foreign investment.

The message from Cairo is firm with FDI objectives remaining at the heart of the country’s development plans.

Source: MEED