Egypt received 17.3% of total foreign direct investment (FDI) in Arab countries in 2015, raking third after the United Arab Emirates (UAE) and Saudi Arabia, according to the 31st annual report on investment in Arab countries by the Arab Investment and Export Credit Guarantee Corporation (Dhaman).
In first place, the UAE received a total of $11bn of FDI, making up 27.5% of the total FDI poured into Arab countries in 2015. It was followed by Saudi Arabia with $8.1bn at 20.4%. Egypt came in third place with a total of $6.9bn of FDI, marking an increase of 49.3% compared to 2014. This amounts to 17.3% of the total FDI received by Arab Countries.
The organisation’s 31st annual report on investment in the Arab countries shows a decline of 10% in the overall inflow of FDI in 2015, compared to 2014. FDI into Arab countries reached $40bn, representing 2.3% of the global FDI, and 5.4% of FDI in developing countries, with a total of $765bn.
The decline comes in contrast to the surge in global FDI, which increased by 38% in 2015, reaching 1.76tr—its highest value since the 2008/2009 financial crisis, according to the annual World Investment Report by the United Nations Conference on Trade and Development.
In terms of FDI balances to Arab countries, the report showed a slight increase of 2.4% compared to 2014. The balance reached $814bn in 2015, which makes up 3.3% of the global total of about $25tr.
Regarding the geographical distribution, FDI balances remain focused on the UAE, Saudi Arabia, and Egypt, making up 52.8% of total balances in the region. Saudi Arabia received $224bn (27.5%), followed by the UAE with $111bn (13.6%), while Egypt received a total of $94.3bn (11.6%).
The report also indicated a significant increase in Organization for Economic Cooperation and Development (OECD) investments in Arab countries. Investments went from $5.7bn in 2013 to $27.7bn in 2014, most of which were placed in the UAE, Egypt, and Saudi Arabia, respectively.
Consequently, OECD cumulative investments in Arab countries amounted to $214bn by the end of 2013, compared to $174bn at the end of 2011, following a general upward trend. In 2003, investments stood at $47.4bn and reached $177bn in 2010.
The list of top 10 OECD countries investing in the region included the US–as the largest investor–with a total of $71.2bn (31.3% of total), while the Netherlands came in second place with $55.3bn (24.3%), followed by Italy in third place with $37.6bn (16.5%).
The report indicates that the number of foreign companies operating in the Arab states rose from 6,109 companies in 2015 to 6,587 in 2016. Those companies are currently investing in 11,541 projects in the Arab region, representing 5.4% of the total global number of foreign projects.
Cumulatively, FDI projects in the region from 2003 until 2016 amount to more than $1tr. Job opportunities provided by these projects are around 1.8m. Over 60% of these projects and foreign investment companies in the region are located in the UAE, Saudi Arabia, Egypt, and Morocco respectively.
Dhaman is a pan-Arab organization owned by the governments of Arab states & four Arab financial institutions. It was established in April 1974 as the first multilateral investment guarantee provider in the world.