Egypt is predicted to see its investment climate become favourable, especially following the strengthening of the banking system’s regulations, according to Elena Sanchez, Head of Financials at EFG Hermes Research.
Sanchez also said that Egypt’s demographic situation is improving as the population growth will open up new markets for investment in the future. She added that she is largely optimistic about the future, especially in light of the recent statistics issued by EFG Hermes’ Research Department.
Her remarks came during the third British-Egyptian Business Association (BEBA) webinar, to analyse the new Central Bank of Egypt (CBE) law issued in September 2020.
The new law is expected to stabilise Egypt’s banking and monetary sectors, and develop the banking sector’s performance. At the same time, it will keep up with the best practices, international customs, and legal framework of the corresponding foreign supervisory authorities.
Along with Sanchez, the webinar hosted a group of the most prominent economists in Egypt, namely: Ziad Bahaa El-Din, Former Deputy Prime Minister and Managing Partner of Bahaa El-Din Legal Consulting Office; Tarek Fayed, Chairperson of Banque du Caire; and Ahmed Issa, Chairperson of the Commercial International Bank – Egypt.
The session was moderated by Karim Helal, Country Director of Colliers International.
Upon his introduction to the session, Helal praised Egypt’s banking sector, which has been lauded by the International Monetary Fund (IMF) several times. The organisation has applauded the sector’s role in safeguarding the country through several financial crises, due to the local and international changes that erupted over the past 20 years.
He further described the country’s banking sector as the “main guardian” of the Egyptian economy, as it was able to adapt quickly and cope with the economic crisis that shook the world in 2008. It made a comeback to save the country from the financial instabilities of both the 25 January 2011 and 30 June 2013 revolutions, and more recently in the novel coronavirus (COVID-19) pandemic.
For his part, Bahaa El-Din gave a comprehensive explanation of the legislative aspect of the law that will enter into force within a year of its decree. The legal expert emphasised that the deadline will give public and private banks the opportunity to adapt to the new financial atmosphere. This will, in turn, give the CBE the full authority to monitor the sector as a whole.
He also highlighted that replacing the 2003 law with the new one, vests the CBE with the broadest powers and authorities to supervise and regulate the banking sector and ensures the CBE’s independence.
The law also introduces a chapter that regulates banks in financial distress to regulate the situation and preserve clients’ rights.
He revealed that the law would, for the first time, grant the CBE the right to control electronic payment services, while imposing financial control on small- and medium-sized enterprises (SMEs).