During this period of transition, the interim government is addressing Egypt’s short-term economic challenges while bolstering long-term economic confidence by creating a foundation for lasting development and fiscal stability. The country is embarking on a comprehensive domestic plan to stimulate growth, create jobs and invest in physical and intellectual infrastructure to expand Egypt’s economy and spur further investment.
In 2013, Egypt began implementing an aggressive public infrastructure investment strategy that funds new projects across the country. Through a two-tiered, two-year multi-billion dollar stimulus package, we are funding the construction of more than 300 new schools, 100 hospitals, renovating public housing and utilities and doubling the number of grain silos in the country. Additionally, we are paving new roads and building a new railway system spanning across entire country.
Egypt is investing in both new and traditional energy sources. Along with boasting one of the largest wind farms in the world, Egypt is Africa’s second richest nation in natural gas. Wind, solar power and natural gas will continue to be important industries with numerous multinational firms maintaining or increasing financing of major oil and gas projects.
Investment in human capital is the most important factor for economic success. That is why a renewed focus on cultivating Egypt’s most powerful asset – its workforce – is a critical focus of the interim government’s stimulus plan. New funding that provides better healthcare and education opportunities for Egyptians will create a dynamic, innovative and productive workforce that can meet the demands of a 21st century economy.
Egypt is developing a more consistent legal and political framework for the nation’s economy in order strengthen economic stability. For example, amendments to the tax code were made to encourage the growth of small- and medium-sized enterprises. Legal procedures are being reviewed to find ways to ease the burdens on businesses and make them more efficient. Additionally, Egypt is exploring reforms to the income tax law and introducing a new value-added tax that will generate revenue within the traditions of an open and fair market economy.
Egypt’s work with international partners as well as multinational corporations continues to modernize Egypt’s economy and expand economic opportunities to all its citizens.
For instance, with 21 projects worth $4.1 billion, the World Bank’s portfolio in Egypt is the largest in the Middle East and North Africa. Inger Andersen, World Bank Vice President for the Middle East and North Africa, said that “Egypt has the potential to become a powerful emerging economy and the World Bank group is committed to supporting the country’s priorities to reduce poverty and achieve shared prosperity.”
In 2014, according to independent financial analysts at Bloomberg, these smart investments will help boost GDP growth by 1.5 percent. Standard & Poor’s raised Egypt’s sovereign credit rating on November 15th, 2013. Recently, Fitch upgraded Egypt’s long-term economic outlook to stable, affirming an Issuer Default Rating of “B-“. 2013 marked a historically positive year for Egypt’s stock market. In mid-December, the stock market closed at its highest level since January 2011. And the independent HSBC Egypt Purchasing Managers Index survey of around 350 private sector firms showed a another month of rising in output for December, demonstrating strong economic growth despite political and security uncertainties.
Sound reform and public initiatives, a healthy and educated labor force and an abundance of natural resources have made Egypt a prime destination for global companies and investment.
“American firms with operations and investments in Egypt remain bullish on the country’s growth potential and strong economic fundamentals: “We made a courageous decision in 2011 to double our investment in Egypt. That really paid off. We were very happy with that. And now we’re looking at another $100 million we are going to put into the marketplace in 2013, and another $100 million in 2014.”
– Curt Ferguson, President, Middle East & North Africa, Coca Cola
“Investing over $150 million over the last 10 years in the country. The rationale has always been the potential – the consumer base of 90 million people represents a fantastic opportunity to any investor for that matter.”
– Karim Chabara, Egypt General Manager, Mars Food
“Throughout all the major political, economic, and social transformations that the country has undergone during these past six decades, I’m always asked whether IBM is going to continue investment, whether IBM is going to continue its focus on Egypt after the turbulent times we’ve witnessed in the past two years or three years. My answer is simple: the fundamentals of Egypt’s market remain the same. It remains a vast market with huge potential to offer. The pool of skills in Egypt remains very rich and diversified…All of these fundamentals remain intact and comprise the strong building blocks of the Egyptian market.”
–Amr Talaat, Egypt General Manager, IBM
“Egypt has gone through many ups and downs and economically, things have looked shaky for a little while… and now the future looks actually very strong. To the point where Chrysler is making very large investments within our facility…and we’re really looking forward to having very good sales there.”
–Robert Brown, Executive Director of Operation, Chrysler Group
“We believe Egypt has lots of potential, primarily because it is one of the largest markets in terms of the consumers. Two, is because of the location, and which allow the export opportunity to happen. And we believe that the economy in Egypt will continue to grow in the near future and we would like to take this opportunity.”
– Tarek Atta, Managing Director, General Motors Egypt & North Africa