The government is expected to attract direct foreign investments worth $7bn by the end of fiscal year (FY) 2015/2016, compared to $6.4bn in FY 2014/2015, according to the assistant to the minister of investment, Sherif Atifa.
The Ministry of Investment’s expectations are lower than its target volume of investments that were announced at the beginning of 2016, which ranged between $8bn and $10bn.
Atifa told Daily News Egypt that the Ministry of Investment is committed to reaching its target volume of direct foreign investments; however, the conditions of the Egyptian economy over the past few months have made it difficult for the ministry to reach that target.
The government managed to attract direct foreign investments worth $3.1bn during the first half of FY 2015/2016, where $1.4bn were obtained during the first quarter, and $1.7bn were obtained during the second, according to data from the Central Bank of Egypt (CBE).
“The government is reliant on Arab and foreign trade visits in order to increase the rates of direct foreign investment during the upcoming period,” Atifa said, referring to Saudi King Salman’s recent visit, as well as French President François Holland’s visit and German vice chancellor Sigmar Gabriel’s visit with large accompanying investment delegations.
He noted that the government is negotiating with French and German investors in order to establish industrial zones similar to the Chinese industrial zone. He expects these zones to increase direct foreign investments.
Atifa explained that the issue is still under negotiation with investors from both countries in terms of the zones’ locations, space, and activities. It is probable that these zones will be specialised and located in the vicinity of the Suez Canal.
Atifa also expects that the volume of direct foreign investment in FY 2016/2017 will grow, owing to the 39 foreign and Arab companies beginning the implementation of energy projects, including power plants with a total capacity of 4,000 megawatts, with investments worth $3bn in October of this year.
These investments are awaiting the approval of the Ministry of Electricity on their financial offers in order to begin implementation, said Atifa.
The average volume of direct foreign investment in Egypt reached $6.5bn during the period from 2004 until 2011; however, in 2007 and 2008, it reached $13bn.
There was a decline in direct foreign investment following the 25 January Revolution to $3bn, with an increase to $4.1bn in 2014 and 2015. This was followed by another increase in FY 2014/2015 to $6.4bn.