CAIRO: Egypt’s Industrial Development Authority (IDA) will provide 50 million square meters of land for industrial development projects, with the aim of attracting LE 72.7 billion in investments.
The offering will begin in January, a move that fits within IDA’s “industrial developer” scheme involving both the public and private sectors. The scheme entails developing land as well as providing the necessary infrastructure to be used thereafter for the realization of industrial projects.
In related news, Minister of Trade and Industry Rachid Mohamed Rachid said that Egypt is looking to attract $20 billion in foreign direct investments (FDI) in the coming next three years, with $10 billion in 2011 alone, reported the state-run Al-Ahram.
Samir Radwan, senior economic advisor at the Egyptian Financial Supervisory Authority (EFSA), said that the decision is “welcome,” noting that opening up land to private sector investments is one of the main obstacles highlighted in the World Bank’s “Doing Business 2011” report.
He explained that paving the way for land acquisition would reduce transaction costs for investors, thus driving FDI into Egypt.
The report notes that Egypt ranks relatively low with regards to significant regulatory areas, coming in 154th out of 183 economies in “Dealing with Construction Permits,” 136th in the ease of “Paying Taxes,” 143rd in “Enforcing Contracts” and 131st in “Closing a Business.”
Radwan added that in comparison to pervious measures taken by the government to free up land for acquisition, 50 million sqm is a “huge…impressive addition” to the government’s litany of efforts to further stimulate the economy.
The land will be handed out in a disparate range of areas, which Radwan stressed as being a smart, strategic decision, as diversity is key to a robust economy.
In a note, Cairo-based investment bank Beltone Financial broke down the land offerings: 15 million sqm have been earmarked for development in East Port Said, with investments worth LE 22.5 billion; and 1 million sqm in South Raswa in Port Said (LE 1.8 billion). In Burg Al-Arab, 5 million sqm will be offered with investments worth LE 8 billion; 10 million sqm in North Fayoum industrial zone (LE 12 billion); 2 million sqm in Abu Khalifa industrial zone in Ismailia (LE 3.4 billion); 3 million sqm in Badr City, Sharqiya (LE 4.6 billion); 10 million sqm in Tenth of Ramadan (LE 14 billion); and 4 million sqm in Sadat City (LE 6.4 billion).
Radwan is confident that the land will attract the targeted LE 72.2 billion. “Many people, especially from the Gulf region, have been hit very hard by the global economic crisis, and now they are in search of safe investment venues,” such as Egypt, he stated.
He added that the same is true of American and European investors, adding that they believe Egypt to be an interesting investment proposition due to the country’s strategic geographical location, making it a unique transit point between Africa, Europe and the Middle East.
Asked how Radwan would characterize the Ministry of Trade and Industry’s as well as the Ministry of Investment — both of which currently fall under Rachid’s supervision — efforts to bolster the country’s economy, especially in light of this latest news, he indicated that they are by far the most “active and progressive” of the various Egyptian ministries.
He also stated that with the Ministry of Finance added to the list, they make a formidable trio for national economic growth; who have not “succumbed” to criticism.
“They are firm believers in reform,” he concluded.