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Why Egypt 1. Central Location with strategic Trade
Agreements:
Egypt has an exceptionally strategic geographic location bordered by the Mediterranean Sea to the North, Red Sea to the East and traversed by the longest river in the world the Nile.
Egypt, as an active participant to WTO, has access to 1.5 Billion Consumer Market through various multilateral and bilateral Trade agreements (The EU-Egypt Association Agreement, EFTA, QIZ, TFTA , COMESA, AGADIR, Egypt- Turkey free trade agreement, PAFTA, MERCOSUR); which secures benefits to Egyptian-based producers supplying these markets.
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Why Egypt
2. Access To A Large Consumer Base In Egypt And Beyond
Egypt is the most populous country in the Middle East and the third-most populous in Africa. Egypt is a strategic consumer market with population of 88 million in 2014; whereby 69%of Egypt’s population is below 35 years as witnessed by the sharp expansion of retail sales over the last decade.
3. Diversified Growing Economy:
Diversity is a key strength of the Egyptian economy as reflected in the notable contribution to growth made by 6 to 8 leading sectors in the past few years. The economy’s diversity enhances its ability to absorb internal as well as external shocks. It also presents multiple opportunities for investors across many sectors.
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Why Egypt
4. Qualified And Competitive Labor Force :
Egypt has a large labor pool of over 26 million skilled and well-trained
multilingual individuals, with more than 60% of the population is under the
age of 30, with cost $360 per month .
5. Reformist Investment Climate:
The Government has embraced an intensive 3 dimensional promotion strategy
based on business reform, FDI attraction, and investor care
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Why Egypt 6. Improving Infrastructure:
• 6.2 million telephone landlines, 95.2 million cellular phone, 47.2 million
internet users
• international airports 20 airports including 10 conforming to
international standards
• 15 main seaports
• Railway Network 9,570 km (191 operational train stations)
• Road network 99,829 km.
• 108 industrial zones, 13 investment zones, 231 free zones, 1 special
economic zone.
• The Suez Canal
• National Road Network of 108,784 Kilometres with a plan to add 3,200
km over the medium term.
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Why Egypt 7. An Economy That Is Resilient To External And Internal Shocks
The Egyptian economy’s ability to post positive real economic growth rates
amid the global economic downturn as well as during the political unrest that
prevailed in 2011-2013 indicates how resilient economic activity in Egypt.
8. Dynamic Business Environment More Reliant On Private Investments
• Total implemented investments increased almost three folds between FY
2002/2003 and such growth was motivated by GoE’s subsequent
investment climate reforms, paving the way for higher contribution of the
private sectorin economic activities.
9. Abundance In Natural Resources
Mineral Resources and Renewable Resources.
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10. Unprecedented Returns AND SOLID FINANCIAL SECTOR:
Egypt’s Stock Exchange (EGX) was named Africa’s most innovative stock exchange
in 2014 by Africa Investor (Ai): Egypt’s main stock market index, the EGX30,
recorded significant gains of 51%, 24% and 32% in 2012, 2013 and 2014
respectively despite two major revolutions in 2011 and 2013. Such remarkable
performance was supported by the raft of capital market reforms implemented
by the Egyptian Financial Supervisory Authority (EFSA) and the Egyptian
Exchange (EGX). This includes the simplification of listing requirements and
documentation, issuing of regulations governing block trading, and, most
importantly, finalizing the regulatory framework regarding the listing and trading
of Exchange Traded Funds (ETFs) on EGX, including its market making
requirements. Trading on the first ETF on EGX30 commenced in January 2015.
Why Egypt
A business environment favourable to investment
•52 Double Tax Avoidance Agreements •111 Investment Protection Agreements •Member of OECD Investment Committee •5 main investor protection schemes endorsed by GAFI •Member of MIGA (Multilateral Investment Guarantee Agency)
•A stimulus package introduced by The Ministry of Industry to facilitate investments in the industrial sector
•Lifting the security approval requirement for media companies.
•Processing reforms related to the technical operations at GAFI`s one stop shop
Investor
Protection
Legal Reforms
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A business environment favourable to investment
•Issuance of law 32/2014:
That reinforces the legal standing of past contracts with the state, a law that limits appeals/challenges to contracts between the government and investors to the parties involved only. The law should limit the impact of the recent issues of some earlier privatized companies.
Legal Reforms
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A business environment favourable to investment
The amended unified investment law will be submitted to parliament within next month; to facilitate investment procedures, land provision and secure investors . The Supreme Investment Council, chaired by President Abdel Fattah Al-Sisi, during its 1st meeting, has approved 17 pivotal resolutions; including a number of tax exemptions and incentives and offering free or discounted land in a bid to attract investors amid economic and political instability.
Investment
Law
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A business environment favourable to investment
Tax Policy Reforms The Government of Egypt (GoE) has introduced real estate taxes, dividends taxes, and approved a new VAT to replace the general sales taxes, all to widen the tax base Energy Reforms The GoE embarked on a comprehensive reform plan including energy products’ price (subsidy) reforms, an increase in electricity tariff in accordance to a plan for 5 years that is communicated to the public, and developing the regulatory infrastructure to increase the share of renewable in the energy mix.
Legal Reforms
&
Economic
Reforms
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Flexible Monetary Policy The CBE has floated the Egyptian pound Nov. 2016, to better reflect market fundamentals and boost the competitiveness of the economy. Food Subsidies and Social Safety Nets The GoE pursued an ambitious food subsidies rationalization program , by : • Subsidizing the final product . • Incentivizing household to reduce their excessive
consumption through rolling out a smart reward system allowing discretionary savings to be used to purchase other subsidized items.
Economic
Reforms
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A business environment favourable to investment
legislative and
regulatory
measures
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A business environment favourable to investment
• Reinforcing the legal standing of past contracts with the state limiting appeals to contracts between the government and investors to the parties involved only
• Amending investment law to boost investor confidence and end longstanding investor disputes
• Reviewing of the procurement law to present and faster and easier legal framework for public funds protection and corruption prevention
• Introducing Microfinance law to corporations increase income and access to finance to most needy individuals
legislative and
regulatory
measures
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A business environment favourable to investment
• Building Infrastructure of electronic registration to reduce time and cost required for company’s incorporation
• Building a regulatory management system that reviews and rationalizes business regulations while promoting justice and transparency
• Establishing an inventory of more than 30 business regulations on e-registry to support the decision making process and assess socio economic impact of new regulations
• Mapping countless investment opportunities with priority given to labor intensive, export oriented sectors with high competitive advantage
Registering Property The Egyptian government to expedite and simplify registering property In Egypt : • Issuance of Law. 83/ 2006 which introduced a flat
fee of to register a property or building. • Egypt speeded up property registration by
simplifying administrative procedures, reorganizing the business workflow between the real estate registry and the Egyptian Surveying Authority and introducing time limits for several procedures.
Procedures
Reforms
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A business environment favourable to investment
Registering Property The Egyptian government is working on some reform measures : • Complete automation of the real estate system
and electronic registration of real estate. • Activation of the electronic payment system. • The application of one-stop system to shorten
the procedures to a single procedure
Procedures
Reforms
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A business environment favourable to investment
Enforcing Contracts The Egyptian government made enforcing contracts easier by creating commercial courts which was established by Law No. 120 of 2008. The Egyptian government is working on some reform measures in this indicator for example:
• Identifying specific deadlines for the judicial procedures.
• Drafting a law for mediation. • Full Automation for the courts and linking them
to a single network.
Procedures
Reforms
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A business environment favourable to investment
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Egypt’s Medium-Term Strategy and Outlook
The medium-term macroeconomic framework and strategic plan encompasses concrete policies, programs and projects to realize the government’s vision: a productive and efficient economy that generates high, sustainable and inclusive growth.
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Egypt’s Macroeconomic Targets FY18/19
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General Indicators
Population
92.7 Mn. In April 2017
Annual General Inflation Rate
33.1% in Feb. 2017
Net International Reserves
28.5USD billion by the end of Mar. 2017
Net Foreign Direct Investments
1st half FY2016/17 : 4.3 billion USD FY2015/16 :6.8 billion USD FY2014/15: 6.4 billion USD FY 2013/14 : 4.1 billion USD
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General Indicators EXPORTS
(FY2012/13) 26.9 USD billion
(FY2013/14): 26.1 USD billion
(FY2014/15) : 22.1 USD billion
(FY2015/16) : 18.7 USD billion
(1st Quarter 2016/17) : 5.3 USD billion
IMPORTS
(FY 2012/2013) 57.5 USD billion
(FY2013/14) 59.8 USD billion
(FY2014/15) 60.8 USD billion
(FY2015/16) : 56.3 USD billion
(1st Quarter 2016/17) : 13.9 USD billion
Average Exchange Rate during
1st half FY 2016/17
Euro € 1.09 $
Dollar $ 11.59 EGP
British pound £ 1.27 $
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FDI in Egypt
11.10
13.20
8.10
6.80
2.20
4.00 3.80 4.10
6.4 6.8
4.3
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 First half
2016/17
8.10
9.10
2.70 3.20
2.38
3.90
2.80 2.50
3.8
4.5
2.4
2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 First Half
2016/17
Total FDI
Billion UD $
Source: CBE
Billion UD $
FDI (Greenfield & Expansion)
Foreign Direct Investment
Inward & Outward FDI flows
Source: Central Bank of Egypt
2007/08 2008/09 2010/09 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16
17.8
12.8 11
9.6 11.8
10.3 10.9 12.9 12.4
-4.6 -4.7 -4.3 -7.4 -7.8 -6.5
-6.8 -6.5 -5.6
Inflow Outflow
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Bn
. $
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1.8% 2.2% 2.1%
2.2%
4.4% 4.3%
3.4%
2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 First Quarter 2016/17
GDP growth rate
Source: CBE
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Trade
26.9 25.1 26.9 26 22.2
18.7
5.3
54.1 59.2 57.7 60.2 61.3
56.3
13.9
0
10
20
30
40
50
60
70
80
2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 First Quarter 2016/17
Exports Imports
Billion UD $
Source: CBE
Thank you for your attention
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