CAIRO: Egypt expects foreign direct investment (FDI) to climb to between $7.5 billion and $8 billion in the year ending June 2007, up from $6.1 billion a year earlier, Investment Minister Mahmoud Mohieddin said on Monday.
The 2006-2007 year will be unprecedented in terms of FDI in Egypt despite all the major obstacles still standing in the way of investment, he told a news conference.
He said that among the biggest deals to boost foreign investment in the current fiscal year was the sale of Egypt s third mobile network in July to Etisalat of the United Arab Emirates for LE 16.7 billion ($2.91 billion).
The government will also finalize the privatization of up to 80 percent of Bank of Alexandria on Tuesday. Mohieddin said the non-energy sector made up 70 percent of FDI in the year ending June 2006, compared with 33 percent in the previous year. The contribution of the non-energy sector was set to rise again in 2006-2007, Mohieddin said, without giving a specific projection.
The figures for 2005-2006 and the FDI projection for 2006-2007 did not include all foreign investment in the real estate sector because of the government s modest ability to gather accurate statistics, he said.
The acquisition by the United Arab Emirates Emaar Properties of a strip of prime luxury tourism real estate on Egypt s Mediterranean coast for $175 million represented one major foreign real estate project. Mohieddin, one of a core group of economic reformist ministers who took office in mid-2004, said it was an uphill struggle to draw investment to Egypt.
We can lose all this if we rest and do not take decisive decisions … Attracting investments to our country is like fighting a daily battle. He also mentioned that local and foreign investors still struggle to obtain financing, as well as land and operational licenses for their companies. The justice ministry is working on legislation to establish courts specialized in financial disputes, he said.
Until the current cabinet took office, Egypt s privatization program had slowed to almost a halt. But the government launched a reform program that has been applauded by analysts for keeping FDI rising despite a number of militant attacks on tourist resorts.
Mohieddin said the steady rise in investments helped the central bank boost its foreign reserves, which in turn has kept the Egyptian pound stable on the foreign exchange market. Egypt s reserves stood at $24.07 billion at the end of September.
We will not remember this unless it [FDI] goes down and we go back to the dark days. Then we will have problems, he said.
The government said that growth in the gross domestic product had increased to 6.9 percent in the 2005-2006 financial year, up from 4.6 percent in the previous year.