Minister of Investment Ashraf Salman expects the volume of foreign direct investment (FDI) will reach $6bn to $8bn for the fiscal year (FY) 2014/2015, compared to the government’s speculations of $10bn.
“The tough times Egypt is going through are behind our low expectations of the volume of FDIs,” Salman said. He added that the FDIs in the first half of FY 2014/2015 amounted to $2.7bn.
During January’s Euromoney Conference, Salman said Egypt targets FDIs worth $10bn in FY 2014/2015, a figure that will rise to $18bn until FY 2018/2019.
During FY 2013/2014, the total FDI to Egypt amounted to $6bn, according to the General Authority for Investments and Free Zones (GAFI).
In a statement to Daily News Egypt, Salman said Egypt still suffers from bureaucracy, which the government is fighting hard to eliminate.
“We find it hard to provide hard currency, but with the economic recovery and the increase in imports, tourism, and foreign investment flow, the issue will be solved,” he added.
Salman refused to answer a question on whether the Central Bank of Egypt’s (CBE) procedures are enough to resolve the lack of manpower issue. He added that this question should be directed to the monetary policy makers.
“We provide the convenient environment for business and investments through pumping more foreign investments,” he said.
With regards to removing the capital revenues tax, Salman stated that the decision is necessary to deepen the market, which is still recovering. “We have not yet considered the consequences of the presidential decree of ceasing the tax for two years,” added Salman.
The decision imposed a tax on the revenue distribution as a whole, without imposing a different tax on the net profit, which is important for businessmen to avoid double taxation.
The government aims to lower the budget deficit and attract FDI to boost growth. The economy’s growth had been affected by the political turmoil since 2011, which shook the investors’ trust.
Salman added that the executive regulation of the investment law will be ready within three weeks, and it is expected to be imposed within a month. The Ministry of Investment is currently holding intensive meetings with all the authorities that own tourist, industrial, and agricultural lands. The meetings are taking place to agree on a fair mechanism for land allocation, according to Salman.
The investment law is now being presented to the Ministry of Transitional Justice, and is expected to be ready within the next few days, added Salman.
Regarding the results of the latest promotional trips and flow of new investments to Egypt, Salman said that locally they have to provide a convenient atmosphere for business. The single-window system also has to be applied. The investor is the one who can market for Egypt, not the government.
According to Salman, there has been a public agreement between all the entities that own lands to authorise GAFI to apply the single-window system.