Several banking experts and leaders confirmed that President Abdel Fattah Al-Sisi’s decision to end the state of emergency in Egypt will contribute to attracting more foreign investment and improve Egypt’s credit rating.
On Monday evening, Al-Sisi announced ending the extension of the state of emergency nationwide for the first time in many years.
Hussein Refaie, Chairperson and Managing Director of Suez Canal Bank, stressed that this decision is a very important step for the investment climate and investors.
He added that the state of emergency was not understood by foreign investors, despite its importance to Egypt for security and the prevention of terrorism.
Similarly, Yehia Abou El-Fotouh, Deputy Chairperson of the National Bank of Egypt, indicated that the decision will have a positive impact on the economy, tourism and the evaluation of Egypt by international rating institutions.
Mohamed Abdel Aal, a prominent banking expert, said that cancelling the extension of the state of emergency is a strong message that Egypt is interested pragmatically and realistically, not only in economic development but also in human development, human rights and social protection.
He stressed that this smart, wise decision will be supported by many gains related to the economy and investment.
“It will give a strong boost to the degree of security and stability, which will increase the positive points when evaluating Egypt’s credit rating by international institutions. Accordingly, we expect that Egypt’s credit rating will be raised shortly following the decision.”
He added that the decision paves the way for Egypt to market its international bonds abroad at lower interest rates, and thus helps reduce the cost of external debt. This decision will also increase the attractiveness of foreign direct investment, which is an investment in long-term assets, which requires a high degree of political stability and security.
According to Abdel Aal, the decision is also expected to increase foreign indirect investment in Egyptian public debt securities, even if the interest returns are equal with other competing countries.
He pointed out that this decision will, directly and indirectly, help increase Egypt’s share of global and regional tourism, and will increase the country’s attractiveness to tourist groups that were reluctant to visit due to the state of emergency. Furthermore, he believes that it will also help support the business environment, enhance the role of the private sector and raise the confidence of foreign and Egyptian dealers and investors in the Egyptian economy and its national currency.
He added that this decision will be reflected positively on the Egyptian Exchange (EGX), as it will boost its dealings, will lead to an improvement in trading volume and its indicators.
“It is truly a historic decision, and as President Abdel Fattah Al-Sisi said, Egypt has become, with this decision, an oasis of security and stability in the region,” Abdel Aal concluded.