Egypt dropped 19 spots in the World Bank’s ‘Doing Business’ ranking in 2016, to 131 from 126 in 2015, among 188 countries included in the report.
A government official, who preferred to remain anonymous, said the business environment in Egypt witnessed many reforms, yet they are not enough. He expects improvements after new reforms are implemented, such as the new investment law, tax reforms, and the one-stop shop investment law.
The report, published on Tuesday, disclosed that resolving insolvencies is very slow in Egypt and could take up to 1,000 days. Mohamed Farid, Chairman of Dcode Economic and Financial Consulting, said the ‘Doing Business’ report indicates that the government needs to help the private sector so investors can pump new investments.
The report was launched at a video press conference in the presence Nada Shousha, regional director of the International Finance Corporation (IFC) for Egypt. The report’s list of countries in which doing business has improved did not include Egypt, or any other Middle Eastern countries, except for the UAE.
IFC Project Officer, Sherif Hamdy, said Egypt’s only achievement was protecting minority investors after the Egyptian Financial Supervisory Authority (EFSA) had taken measures to control the trading of treasury shares in listed companies, and set a one-year ownership term.
Chairman of the Egyptian Stock Exchange (EGX) Mohamed Omran said Egypt’s improvement in terms of the stock market reflects the importance of the capital market.
Hamdy said Egypt’s low ranking resulted from the bank’s new criteria in ranking countries, as well as the reforms in other countries.
The World Bank has introduced a new methodology in ranking countries, including quality and ease of construction permits, electricity access, registering properties, and enforcing contracts.
He noted that blackouts in Egypt have also caused Egypt to lose points, despite its quick procedures that take only 64 days compared to a world average of 97 days. He also explained that MENA countries have advanced in utilising electronic payment solutions for paying taxes, where Egypt still insists on manual payments.
However, Egypt was among the best performing countries in MENA in terms of starting businesses, where it takes eight days only, compared to 40 days 10 years ago, according to the report. Egypt also does not set a minimum for capital, unlike most MENA countries.
The report said Egypt is one of the best performing countries in the region in terms of credit access, where credit bureaus cover a large segment of the adult population and compile all key information, which means that even small projects of short credit history can still obtain funding.
The report showed that Egypt is in a better place in terms of construction quality control, where constructions are examined during the process.
The report provides details on the economy in the Middle East, but does not focus on security, macroeconomic stability, spread of bribery and corruption, the level of training, or foreign investment.