CAIRO: Investments in Egypt are skyrocketing, up 500 percent over last year, according to the minister of investment.
During the 4th Economic roundtable meeting held in Egypt, Mahmoud Mohieddin, minister of investment, stated that investments in the petroleum sector amounted to $1.9 billion, and $2.5 billion in other sectors, at the mid-point of the 2005/06 fiscal year. According to the minister, these figures are five times greater than those registered in the corresponding period of the previous fiscal year.
Foreign shares in public assets and investments also peaked, amounting to a total of $520 million, the minister said during the meeting.
Foreign direct investments (FDI) also jumped to $3.3 billion during the first half of the 2005/06 fiscal year, compared to the $1.8 billion reached in 2004/05, stated the minister at the meeting.
According to the Balance of Payments used by the Central Bank of Egypt, investment inflow also increased, reaching approximately $1.5 billion.
“The increase in FDI comes parallel to the increase in local investments, said the minister, according to a statement released by the ministry. “The crucial factor is that Egypt cannot attract foreign investments while Egyptian investors are hampered by obstacles. Our final goal is to provide more jobs.
FDI in non-petroleum sectors amounted to $2.568 billion, five times higher than the $464 million reached during the corresponding period last year and doubled the $1.264 billion reached during the whole 2004/2005 fiscal year.
The increase in foreign direct investments was witnessed over a multitude of sectors, and reaped benefits for a number of establishments. For example, $2.025 billion was poured into new establishments and expansions, which increased by $1.6 billion over the first half of the previous financial year.
$520 million in proceeds came as a result of privatization and the selling of assets and companies, representing 15.6 percent of FDI during the first half of the current financial year.
$22.6 million in foreign investments was also poured into the real estate sector, according to the minister.
During 2005 there was a noticeable increase in demand on commercial properties, especially from local and international food chain sectors and supermarkets. Consider also that their expansion plans were double that of 2004, according to a statement made by Nehad Adel, commercials sales director, Coldwell Banker Commercial-Betna Real Estate, on the company’s Web site.
Adel also stated that the company expects to see an increase in interest from foreign investors on land and development projects, who will need land for office spaces to run their businesses.
According to Adel, the increase in investment interests can be attributed to the changes that the government has implemented to encourage investments in the region, especially in the real estate sector. Changes such as lowering customs, lowering taxes, reducing property registration fees, the full implementation of mortgage, facilitating the foundation of foreign investments and facilitating foreign ownership procedures of properties in Egypt, will increase real estate transactions.
“Egypt has the potential to attract more foreign investments, said the minister in the statement. “It is already on the way, but investment obstacles should be eliminated.
According to the minister, some of the obstacles stumping investment growth include financial liquidity, or access to finance, and the remaining complex laws and registration regulations in the real estate market, which make it difficult and time consuming for investors to access land for investment.
However, with the simplification and streamlining of laws currently being tackled, the minister believes that investments will see even greater growth in the coming years.
“The draft laws on real estate registration and commercial courts will revolutionize the investment climate, he said.