CAIRO: Egypt still hopes to attract $10 billion in foreign direct investment (FDI) in this fiscal year despite a weak first half, Investment Minister Mahmoud Mohieldin said on Tuesday.
Egypt’s FDI fell to $2.63 billion in the first half of fiscal 2009/10, which began on July 1, from $4.03 billion a year earlier, according to central bank figures.
Investment along with other key sources of foreign exchange such as tourism and Suez Canal revenue were hurt in the wake of the 2008 global financial crisis.
“It’s still achievable if a number of projects in the works are finalized in time, Mohieldin said in an interview. These include construction and energy projects. If they’re not, it isn’t terribly important because they will be soon after, he added.
He projected that FDI would also be around $10 billion in fiscal 2010/11 fiscal year.
The government is counting on public private partnership (PPP) projects to help attract investment in infrastructure and social services, but a new law governing the process is unlikely to be enacted in time to affect investment this fiscal year.
“We hope to have the PPP law passed in this parliamentary session, which finishes around the end of June, Mohieldin said.
“There are now many projects with the Ministry of Electricity that could be classified as PPP, without guarantees from the government. In the future, there’s going to be more of that, and more of other projects with guarantees from the government, Mohieldin said.
The government has also been taking steps to spur the market for government and corporate bonds, including reactivating its repurchase agreement.
“The infrastructure projects are going to be the major beneficiary of that. They are going to be having receivables, Mohieldin said.
“They may need to offload their liabilities to the market under the rules of engagement. There are going to be many projects that are after 20 and 30 years of funding, especially in low-income mortgage finance and mortgage finance at large, he added.
An asset management law the government is drafting will pave the way to attract investment by allowing it to sell stakes of up to 49 percent in about 150 companies it still owns.
“We are almost done technically as far as the preparation of the draft is concerned, and it should be sent to cabinet committees within the coming weeks, Mohieldin said.
“We’ll see if we’re going to be lucky to get it in this current parliamentary session, he added.
In the meantime, the Investment Ministry has been clearing debts from the companies’ books and investing in them.
“What we are seeing is the net worth that is becoming positive of the companies. And through that I’ll be flexible with a variety of auctions, of offerings in the future, Mohieldin said.