Executive Summary

The Egyptian government continues to make progress on economic reforms, and while many challenges remain, Egypt’s investment climate is improving.  Thanks in part to the macroeconomic reforms it completed as part of a three-year, $12-billion International Monetary Fund (IMF) program from 2016 to 2019, Egypt was one of the fastest-growing emerging markets prior to the COVID-19 outbreak.  Egypt was also the only economy in the Middle East and North Africa to record positive economic growth in 2020, despite the COVID-19 pandemic and thanks in part to IMF assistance totaling $8 billion. Increased investor confidence and high real interest rates have attracted foreign portfolio investment and increased foreign reserves.  In 2021, the Government of Egypt (GoE) announced plans to launch a second round of economic reforms aimed at increasing the role of the private sector in the economy, addressing long-standing customs and trade policy challenges, modernizing its industrial base, and increasing exports. The GoE increasingly understands that attracting foreign direct investment (FDI) is key to addressing many of its economic challenges and has stated its intention to create a more conducive environment for FDI.  FDI inflows grew 11 percent between 2018 and 2019, from $8.1 to $9 billion, before falling 39 percent to $5.5 billion in 2020 amid sharp global declines in FDI due to the pandemic, according to data from the Central Bank of Egypt and the United Nations Commission on Trade and Development (UNCTAD). UNCTAD ranked Egypt as the top FDI destination in Africa between 2016 and 2020.


Egypt has passed several regulatory reform laws, including a new investment law in 2017; a “new company” law and a bankruptcy law in 2018; and a new customs law in 2020.  These laws aim to improve Egypt’s investment and business climate and help the economy realize its full potential.  The 2017 Investment Law is designed to attract new investment and provides a framework for the government to offer investors more incentives, consolidate investment-related rules, and streamline procedures.  The 2020 Customs Law is likewise meant to streamline aspects of import and export procedures, including through a single-window system, electronic payments, and expedited clearances for authorized companies.


Egypt will host the United Nations Climate Change Conference, COP 27, in November 2022. Recognizing the immense challenges the country faces from the impacts of climate change, government officials announced that the Cabinet will appropriate 30 percent of government investments in the 2022/2023 budget to green investments, up from 15 percent in the current fiscal year 2021/2022, and that by 2030 all new public sector investment spending would be green. The GoE accelerated plans to generate 42 percent of its electricity from renewable sources by five years, from 2035 to 2030, and is prioritizing investments in solar and wind power, green hydrogen, water desalination, sustainable transportation, electric vehicles, smart cities and grids, and sustainable construction materials. The government continues to seek investment in several mega projects, including the construction of smart cities, and to promote mineral extraction opportunities.  Egypt intends to capitalize on its location bridging the Middle East, Africa, and Europe to become a regional trade and investment gateway and energy hub and hopes to attract information and communications technology (ICT) sector investments for its digital transformation program.


Egypt is a party to more than 100 bilateral investment treaties, including with the United States.  It is a member of the World Trade Organization (WTO), the African Continental Free Trade Agreement (AfCFTA), and the Greater Arab Free Trade Area (GAFTA).  In many sectors, there is no legal difference between foreign and domestic investors. Special requirements exist for foreign investment in certain sectors, such as upstream oil and gas as well as real estate, where joint ventures are required.

News Briefing for May 2024

May 29      The Central Agency for Public Mobilization and Statistics (CAPMAS) has revealed that the trade exchange between Egypt and China amounted to $13.9bn in 2023, compared to $16.6bn in 2022. Egyptian imports from China totalled $12.9bn, compared to $14.8bn in 2022. The key commodities imported by Egypt from China in 2023 were machinery and electrical appliances worth $4.3bn; iron and steel worth $1.2bn; synthetic textile fibres worth $1.1bn; organic chemical products worth $790m; and plastics and their products worth $773m.


May 28      The total number of foreign nationals who received work permits in Egypt’s private and investment sectors reached 17,357 in 2023, compared to 13,331 in 2022. CAPMAS revealed that 7,973 foreigners were issued work permits for the first time in 2023, accounting for 45.9% of the total. Additionally, 9,384 foreigners had their contracts renewed, making up 54.1% of the workforce.


May 26     Egypt is expected to experience a significant increase in its foreign currency reserves during the fiscal year 2024/2025, with a surge of $16.20 billion. A report by U.S. multinational finance firm JPMorgan predicts further rise of $2.60 billion in the following fiscal year, 2025/2026. 


May 22     Egypt has trimmed its economic growth expectations to between 2.8% and 2.9% for the current fiscal year ending in June, from previous expectations of 3%, Planning and economic Development Minister told. 


May 13     The government is eyeing expansion initiatives for 13 key tourist airports across the country to accommodate the anticipated surge in hotel rooms. In 2023, Egypt received a record-breaking number of tourists, reaching 14.906 million people in 2023, which surpassed a previous record of 14.731 million tourists in 2010.

News Briefing for April 2024

April 24      Egypt approved establishing a special free zone and international touristic port in the Ras al-Hikma peninsula, west of Alexandria. Egypt in February signed a $35 billion investment partnership agreement with the United Arab Emirates to develop the peninsula, in one of the biggest deals of its kind.


April 21      Saudi Arabia's Waja Company has sealed a framework cooperation agreement with the Arab Organization for Industrialization (AOI) to establish a joint venture (JV) for manufacturing electric vehicles (EVs) in Egypt, as per a disclosure to the Saudi Exchange (Tadawul).


April 22      Egypt is targeting a 4.20% economic growth rate in the fiscal year (FY) 2024/2025, said the Minister of Planning and Economic Development. The Egyptian government revised down growth prediction for FY 2023/2024 from 4% to between 2.90% and 3%. 


April 9       Egypt registered a 6.10% increase in tourism revenues to $7.80 billion in the first six months (6M) of the fiscal year (FY) 2023/2024. The recorded amount is compared to$7.30 billion a year earlier, according to official data.


April 8       Egypt’s annual urban consumer price inflation rate slowed to a lower-than-expected 33.3% in March from 35.7% in February. Month-on-month, prices rose by 1.0% in March, down from 11.4% in February. 


April 8       Starting from May 2024, the minimum wage will be set at EGP6,000 ($126). This decision demonstrates Egypt’s dedication to safeguarding workers’ interests, particularly in light of recent economic developments both domestically and internationally. 

News Briefing for March 2024

March 25     The Suez Canal Economic Zone (SCZONE) has recently announced securing contracts for 127 projects within just nine months, totaling an impressive investment of approximately $2.8 billion. This surge in investments underscores the region’s growing appeal as a prime destination for industrial development and investment.


March 13    A recent report by the Central Agency for Public Mobilization and Statistics revealed that the trade deficit in Egypt reached $3.03 billion in December 2023, a notable increase from $2.57 billion in December 2022. This increase underscores the challenges Egypt’s trade sector is facing as it navigates through economic fluctuations and global market dynamics.


March 13    Egyptian and Chinese officials have engaged in further discussions about setting up a Chinese industrial zone along the Mediterranean Sea, according to a local news report. The plan involves an industrial zone to serve the local market and facilitate exports to Europe and America. 


March 7     Egypt floated its currency and announced a deal with the International Monetary Fund to increase its bailout loan from $3 billion to $8 billion, moving to shore up an economy hit by a staggering shortage of foreign currency and soaring inflation.  


News Briefing for February 2024

29 February   Even with the Ras El Hikma investment, Egypt still needs the support of the international Monetary Fund (IMF) or risk going back to square one on the path of economic reforms, Capital Economics said in an analysis report.

 

29 February   Prime Minister Mostafa Madbouly confirmed that Egypt received $5 billion from the first installment of the investment partnership deal with the United Arab Emirates to develop Ras El Hikma with another $5 billion expected to arrive on Friday.

 

29 February   Starting from the first of March 2024, Egyptian companies engaged in the production of key food commodities will implement a new measure by clearly indicating the final selling prices on their products, according to sources cited by Asharq Bloomberg.

 

28 February   China has expressed its interest in establishing a new industrial zone on the Mediterranean Sea in a bid to cater to the local market and tap into European and American markets. The proposal was discussed during a meeting between the Egyptian Minister of Trade and Industry, Ahmed Samir, and his Chinese counterpart, Wang Wentao.

 

Feb 28   Egypt has signed seven memoranda of understanding with international developers in the fields of green hydrogen and renewable energy in the Suez Canal Economic Zone that could lead to total investment worth around $40 billion over 10 years, a cabinet statement said.

 

Feb 27   The International Monetary Fund has resolved key issues with Egyptian authorities in a review of its $3 billion loan program and should finalize an augmented financing package within weeks, IMF Managing Director Kristalina Georgieva told Reuters on Tuesday.

 

27 February 2024   A report issued by the Ministry of Planning and Economic Development said that the economic growth rate targeted by the plan for the fiscal year 2023/2024 is about 4.1 percent, while the plan targets 11.84 trillion pounds of gross domestic product, achieving 15.2% as an investment rate, and 1.65 trillion pounds in total investment volume.

 

26 February 2024   In a significant move to enhance financial discipline and optimize the utilization of Egypt's resources, the Minister of Finance, Mohamed Maait, has issued the executive regulations of the Unified General Finance Law which strictly prohibit the establishment of any private funds or accounts unless authorized by a law issued by the House of Representatives, based on a request and presentation from the government.

 

Feb 24, 2024   The United Arab Emirates is to inject $35 billion in foreign direct investment into Egypt over the next two months, Egyptian Prime Minister Mostafa Madbouly told a news conference recently. 

 

Feb 23   Egypt said on Friday it had signed a deal with the United Arab Emirates to develop a prime stretch of its Mediterranean coast that would bring $35 billion of investments to the indebted country over the next two months.

 


News Briefing for January 2024

January 31    The Central Bank of Egypt (CBE) has instructed banks to set a maximum daily withdrawal limit for a single client's account or all their accounts at LE 150,000. Any requests from customers looking to withdraw amounts exceeding the LE 150,000 limit must be reported to the CBE twice a day (at 12 PM and 3 PM) for approval. 


January 30    The International Monetary Fund (IMF) lowered its expectations for the growth of the Egyptian economy during the current fiscal year 2023-2024 by 0.6 percent, to 3%.


January 11    Egypt's tourism sector in 2023 witnessed a series of achievements, with a total of 14.906 million tourists visiting the country, the Minister of Tourism and Antiquities, Ahmed Issa, announced.


January 10    Egypt’s annual core inflation rate recorded 34.2 percent in December 2023, compared to 35.9 percent in November 2023, according to the Central Bank of Egypt (CBE).


January 4    In December 2023, the CBE recorded its NIR at $35.219 billion, compared to $35.173 billion at the end of November.