CAIRO: Boasting resilient economic growth in the global downturn, Egypt has been an attractive investment destination, but opening up more opportunities for the private sector needs to speed up, a minister said on Tuesday.
Egypt, which plans increasingly to rely on private companies to provide social services and infrastructure through public-private partnerships, has already simplified the procedures for investment and pushed through new legislation.
But the speed at which the government has opened up specific projects ready to be applied has not been fast enough, hemmed in by opaque land allocation laws and ineffective decentralization, Trade and Industry Minister Rachid Mohamed Rachid said.
"I think Egypt has proven in the last six years it is a good destination for investment. All the macro-indicators are positive," he told a media round-table. "The biggest challenge is however … how fast and how effectively we can open up more investment opportunities."
Cabinet forecasts expect Egypt’s economy, which grew by 5.2 percent in 2009/10, to grow at least 6 percent this year as the budget deficit dips below 8 percent of output.
But spending on its roads, rail network and ports has failed to keep pace with fast population growth, now nearing 78 million, dampening its economic prospects.
Rachid, who said Egypt was "aggressively seeking" private partners to help fill a human resource gap and revamp infrastructure, had previously announced the government was eyeing up to LE 50 billion ($8.8 billion) in infrastructure projects in the next 18 months.
But the country was "not moving fast enough, we need to move faster," he said.
"We still have certain areas that need to be resolved significantly. One of them is the way to deal with land in Egypt," said Rachid.
Concern about how land is allocated has been fuelled by a wrangle involving Talaat Moustafa (TMG), the country’s biggest listed developer, after a court ruled the contract for the sale of state land for its flagship Madinaty project was illegal.
The cabinet upheld the court ruling to scrap TMG’s contract, but said it would reallocate the land to the firm under the same terms based on its right to act in the national interest.
While the solution quelled some investor concerns, others have asked for more assurances. The cabinet has said it was eyeing a new law to manage land sales.