Arab businessmen have called on the Egyptian government to quickly repair legislation and organise economic activity to inject more capital, describing Egypt as suffering from legislative chaos that repels investors.
Prominent Saudi businessman Sheikh Saleh Kamel said during an Arab investors’ conference on Sunday that Egypt needed a revolution in economic legislation in order to incentivise investment.
He said there was very little incentive for investment, “as Egypt suffers from legislative chaos and there is no hope for attracting investment without reforming the legal environment”.
Head of the Al-Kharj Chamber of Commerce and Industry Showemy bin Ajyan Al-Kitab said that the Egyptian tax system requires major adjustments. He added that the ‘one-stop shop’ investment window must be implemented to mimic investment conditions in the UAE, Saudi Arabia, and Europe.
“The recent political situation, which lasted four years and negatively impacted the investment climate in Egypt, is beginning to show signs of stability in Egypt, which means that the country will attract more Arab investments,” he said.
Saudi Arabia is one of the foremost investors in Egypt, with investments exceeding $26bn.
Despite the fact that Arab investors are demanding that the government amend investment laws, they believe that Egypt is still attractive for investment due to low labour costs.
“Operation costs in Egypt are 35% lower than that of the surrounding countries,” Al-Kitab said.
“The political situation negatively affected investments from Arab countries,” said Mohsen Al-Qahtani, member of the Saudi-Egyptian Business Association. Al-Qahtani added that his tourism company in Egypt has stopped activities over the past three years.
He said that Saudi tourists chose other destinations in East Europe in recent years, but added that he hoped they would return to Egypt “in the near future”.
Arab tourism to Egypt represents 20% of total tourism traffic according to the Ministry of Tourism.
“Arab companies operating in Egypt, despite the circumstances witnessed by Egypt, did not stop their work,” said Chairman of the Federation of Chambers of Commerce Ahmed Al-Wakil.
Al-Wakil said the most important demand of investors, whether local or foreign, was the application of the ‘one-stop show’ investment window system, allowing all procedures to be completed in one place.
The Ministry of Investment is working to implement a system to limit dealings to one government agency instead of 78 separate ones, according to Minister of Investment Ashraf Salman.
“During our meeting with investors, we asked [President Abdel Fattah] Al-Sisi to resolve the outstanding problems with the Egyptian government, which the president promised to do,” said head of Saudi Arabia’s Al-Ameriah, Bandar bin Mohammed Al-Amri.
According to Salman, relationship issues between the government and Saudi companies will be solved through activating a mechanism for dispute settlement through the cabinet and the ministry’s dispute resolution committee.
An official close to Salman recently said: “Stages for a settlement may be issued within days for the dispute with Saudi businessman Abdullah Alkakay.”
The source said the government aimed to end the dispute before the start of the economic summit which will be held in March 2015, in the hopes of sending a strong message to foreign investors.
Hassan Ibrahim, member of the Jeddah Chamber of Commerce, said that exchanging experiences among the Arab countries has not taken place as desired due to government procedures and restrictions.
“Investment in Egypt is promising, but despite these great possibilities, investors are worried about investment restrictions laid out by the Egyptian government,” Ibrahim said.