Following the ratification of the New Investment Law, Minister of Industry and Foreign Trade, Mounir Fakhry Abdel Nour, discussed with Daily News Egypt the items of the new law. Abdel Nour mentioned that it offers several incentives regarding energy and lands allocation. The minister stressed that the law did not differentiate between investors’ nationalities. As for the energy crises, Abdel Nour said President Abdel Fattah Al-Sisi will soon sign the Electricity Law, allowing the private sector to produce, transfer, distribute and sell electricity.
What are the challenges you faced while preparing for the Economic Summit?
The idea of this conference came to the government in July 2013, following the ouster of former President Mohamed Morsi, when several voices had requested organising a conference to economically supPort Egypt. On the challenges that faced the ministry, let me note that the conference was organised by Minister of International Cooperation Naglaa Al-Ahwany and Minister of Investment Ashraf Salman, so all the burdens were borne by them. I have contributed to this conference by making visits to promote it; for example, I have gone to France, Spain, Lebanon and many other countries. Also, I have made a contribution to the issued legislations that aim to improve the investment climate, such as the New Investment Law.
What are the most significant points in the New Investment Law that will benefit the industrial sector?
The new law has extensively focused on the procedures of lands allocation to investors from item no 71 to item no 83, which aim to coordinate and facilitate between relevant parties that have authority on lands. The law has also offered unprecedented incentives for lands in remote areas by:
- Allocating lands through purchasing, leasing or on a usufruct basis at low prices
- Participation of the government in paying workers insurance
- Training of workers in remote areas to raise their capabilities
The law has also obliged the government to offer incentives for labour-intensive, remote areas, energy, logistics and production projects. The incentives will allow investors to establish custom Ports, in coordination with Minister of Finance, and obtain energy at low prices. It also obliges the government to fully or partially repay costs of providing lands with facilities to the investor after the project’s allocation in addition to bearing the cost of training workers. All these points will significantly change the industrial sector. Generally speaking, there are also amendments in the Penal Code related to the criminal responsibility of the investor in the times of violations, in a way that strips the company’s chairman, who is the legal representative of his company, from responsibility and punishing the concerned employee.
After ratifying the law, who will be directly responsible for allocating lands?
Under the new law, there will be a “one-stop shop” the investor will deal with to finish all the needed procedures to implement his project. The Industrial Development Authority (IDA), which is currently in charge of allocating lands, will be represented in this shop. There will also be a data base for all available lands in Egypt and their facility status so that it will be easier for investors to know which lands are available in which areas. All the relevant parties will be represented in the one stop shop.
When will the law be efficiently effective?
The law will reach its optimum shape within 18 months from the date of issuance.
Will the nationality of the investor affect the method of land allocation?
The law didn’t address this point, and it can’t because we need foreign investments. There will be general standards applied on all investors.
What are the projects that Ministry of Industry will propose in the Economic Summit?
The only project that the Industry Ministry will propose is the Safaga Industrial Port; this will be the first industrial Port in Egypt. The Safaga Port has been established to exPort phosphate extracted from Abu Tartur mine. Under the country’s policy to limit mineral resources exPorts with added value, phosphate and many raw materials will be converted to phosphate fertilisers. The project also includes establishing an industrial area, including food manufacturers as well as storage areas. The project has also been studied by several international institutions and it is ready for proposal. The cost of the project is $170m (EGP 1.2bn). The number of projects that were studied by the government was 80 projects, but they were shortlisted to more than 20 projects.
How will the energy crisis affect the implementation of proposed projects?
This issue will end before the end of March as some LNG shipments will arrive this month in Ain Sokhna Port. So this will solve the energy issue. Also among the proposed projects are energy-generating ones. We should also focus on the project that the president will sign soon, which is the Electricity Law that will allow the private sector to produce, transfer, distribute and sell electricity. As for labour-intensive projects, the investor will have to provide energy sources himself. I also want to say that the aim of the Economic Summit is not only to sign contracts, but to regain the investors’ confidence, prove that the government is serious in implementing the economic reform measures and prove that the government can propose well-studied projects.
How will the government deal with the foreign currency issue?
I myself feel that there is an improvement in the availability of foreign currency; I can sense that because I’m not receiving complaints anymore.