In an interview with Daily News Egypt, British Ambassador John Casson discussed the Egyptian economy’s current situation, its growth opportunities, and the obstacles facing British investors in Egypt.
How do you describe Egypt’s economy, and what does it need to grow?
The Egyptian economy is like a car with a flat battery, so it needs a push. Mega projects and foreign investments are only the push for the car, but it won’t run and move forward without growing small and medium enterprises (SME). FDIs and mega projects are significant for the economy, but they won’t provide the amount of jobs that Egypt needs. Egypt has to create 700,000 new jobs every year to keep up with the birth rate, however, jobs will be created by growing and stimulating Egyptian companies, where 80% of the population work for SMEs.
What are the main difficulties and obstacles facing British investors in Egypt and what do they need from the government?
Investors mainly point to three things that they need to see to make sure they can fulfil the potential opportunities. Firstly, they need to be confident that the government’s good economic reform plans will be implemented.
Secondly, they want fair treatment from the government, they need to be sure that they will be paid back in return for their investments, as they do for their shareholders, not for charity, as well as providing a climate for fair competition.
The third thing they need from the government is to open up the private sector’s base, remove bureaucracy, red tape, and over regulation. By simplifying regulation, opening access to foreign currency and to contracts, the government will help Egyptian SMEs as well as encouraging foreign investors.
The government knows all these demands, and we know that they are working on it, that’s why we are optimistic about the flowing of more investments in the recent future. It’s not only about the government, it’s also about partnership between Egyptian and British private sectors. Unless the government is the contractor of some projects, especially in infrastructure sector, the most important thing needed from the government is to open the competition and get out of the way.
What is the volume of British investments in Egypt?
Britain is the biggest foreign investor in Egypt, where investments have reached $24.1bn in the last five years, marking 49.5% of total FDI in Egypt. In January, Britain brought the biggest trade mission to any country last year, which was also the biggest brought to Egypt for 15 years, which means that British companies are paying attention to Egypt again. Britain will stay the number one foreign investor in Egypt, as British companies are back and seeking opportunities in Egypt, especially after the Economic Summit of Sharm Al-Sheikh.
Are there any negotiations currently taking place between the government and British Companies regarding new investments?
Yes, there are many negotiations taking place, but I can’t speak on behalf of those companies. However British companies are back and interested in Egypt, as we witnessed the first wave of British investments in the Economic Summit in Sharm Al-Sheikh. British investments were the biggest with $12bn investments from BP, $1.4bn from BG as well as serious discussions with a lot of other companies. The good thing about the Sharm Al-Sheikh Summit was that it focused everybody’s mind, including companies and government about the available investment opportunities in Egypt. However, the Economic Summit attracted the companies to Egypt, now the government has to make sure the opportunities will come through, implement reform plans and remove any obstacle facing investors to create a good investment climate.
Which sectors attract British companies’ investments?
British investments go to many sectors, such as the power sector where Britain is very actively strong, energy sector, infrastructure construction, retail, finance and IT as well. I am confident that we will see more deals and investments soon.
What do you think about the former justice minister’s recent statement that the garbage collector’s son cannot be a judge?
As I stated earlier, I further stress that the garbage collector’s son “or anyone whatever is his background” is most welcome to join the embassy’s staff if qualified.
Regarding the Nomou Initiative, what is its target?
The fund targets creating a bridge from foreign investments and mega projects to Egyptian companies. 99% of Egyptian companies are SMEs with 50 employees or less, employing about 83% of the population, forming the dynamic heart of the Egyptian economy. At the moment, it’s difficult for SMEs to get financed, which is where Nomou is going to bring financing by contributions from GroFin, the British government and from the Shell foundation, making $50m available for Egyptian entrepreneurs in the next three years as well as the advice and the expertise to help people grow their business.
What is Britain’s point of view in participating in the Fund?
It’s about sharing responsibility, we all want to see Egypt succeed, we all want to see stability. If Egyptians have jobs, it’s good for stability and democracy, we have a responsibility to provide financing, and the Egyptian government has a responsibility to open up regulation to make it simpler and easier for the companies to grow.
Will the fund be targeting certain areas in Egypt?
The fund will have offices across the country, in Cairo, Alexandria, and Upper Egypt, in order to cover SMEs which are distributed all across the country.