Chairman of Orascom Development Holding Egyptian and businessman Samih Sawiris told Daily News Egypt that floating the Egyptian pound is essential to reveal its real value, attract investments, and reduce unemployment.
During the Africa 2016 Forum in Sharm El-Sheikh, Sawiris said Egypt needs teamwork to protect the interests of the “poor citizen” from the consequences of the pound floating, which will result in high inflation moves.
“The Egyptian government must protect the middle-class from collapsing in the face of high prices, by establishing an integrated work plan between the Ministry of Finance and the Central Bank of Egypt,” Sawiris said.
According to the billionaire, the plan must consider increasing the wages of limited-income individuals and their shares in the subsidies “to let them breathe and not be suffocated by higher prices”.
“The Egyptian economy needs $7bn this year to be able to overcome the dollar shortage crises,” Sawiris said. This must be followed through by revitalising tourism to draw in dollar revenues and dollar transfer through Egyptians abroad who should abdicate them in the banking system instead of selling them to the black market.
“There’ll be no reason to sell dollars outside the banking system as after the pound floating the dollar will be at the same value in both official and unofficial markets,” he said.
Egypt’s administration is complacent and arrogant about the tourism issue, he said, using the Russian plane crash accident on 31 October 2015 as an example. Egypt issued an initial report denying the plane crashed due to a bomb, “in a way that suggested they thought the reports by the Russian intelligence and their experts are idiotic”.
When asked why Egypt issued a report without checking facts, he said “[because] the result will be losing Russian tourists”. He said he does not have difficulty accessing the dollars he needs, despite the crisis, “I have dollar resources from my investments in the tourism sector”.
On freezing his investments in Ethiopia, Sawiris denied that he did and that there is a slowdown from his company and from Ethiopia, “but we will work to increase the work speed there”.
The investment climate in Egypt is the worst in the Arab world because of an unclear plan regarding the currency exchange rate and the absence of a real price for the local currency, which he said makes it hard for investors to calculate their return on investments.
Discussing the investments of Orascom Development Holding, Sawiris said company CEO Khaled Beshara is currently reviewing the investment plan with representatives of eight countries, in which Orascom invests, to identify the share of each country.
The company has investment plans that are being renewed each year to comply with the changeable investment trends of each country and the vision of his company “because if I followed the aspirations of each president, I’d go bankrupt,” Sawiris said.
Beshara said the company has investments in Oman worth $250m, noting that Egyptian governmental bureaucracy has resulted in halting projects such as the Haram city residential project.
Sawiris suggested going back to the land allocation system that prevents investors from freezing their lands until they can sell it at a higher price. He criticised the land allocation system of the Tourism Development Authority (TDA).