he Cabinet’s Media Center said that the state has developed a comprehensive strategy to improve the investment climate and encourage the business community to expand, in the framework of the economic and structural reform policies that helped increase foreign capital flows into the Egyptian market and mitigate the coronavirus pandemic’s repercussions.
In this regard, the Centre published, on Sunday, a report in which it sheds light on Egypt’s attractiveness to foreign investments, with the consensus of international institutions, and the optimistic expectations that it will continue to increase in the coming years, thanks to the economic reform that continues to reap its fruits despite the repercussions of the Coronavirus crisis.
The report showed that Egypt is among the world’s best destinations for attracting foreign investments, and it topped the list of African countries in 2020, accounting for about 15% of the total foreign investment flows to the African continent, at a value of $5.9bn, according to UNCTAD.
The report pointed to Egypt’s position in the Rand Merchant Bank Index, indicating that it is the first investment destination in the African continent, thus continuing to lead the list of African countries attracting investments in the index since 2017.
The report reviewed the top 10 attractive destinations for investments in Africa in 2020, according to this indicator. Egypt came first, followed by Morocco, then South Africa, Rwanda, Botswana, Ghana, Mauritius, Ivory Coast, Kenya and Tanzania.
The report mentioned the top 10 attractive destinations for investments in Africa in 2014, according to the same index, where Egypt ranked sixth, while South Africa ranked first, followed by Nigeria, Ghana, Morocco and Tunisia, Ethiopia ranked seventh, followed by Algeria, then Rwanda, and Tanzania.
Also, according to the Rand Merchant Bank, Egypt is one of the first countries to return to the growth path in the wake of the Coronavirus pandemic, ensuring its ability to deal with severe global shocks, adding that the expansion of production and discovery of natural gas was the main support for making Egypt an attractive investment destination, in addition to enabling the construction sector and establishing the new administrative capital.
The report indicated that during the year 2020/2021, net foreign direct investment in Egypt as a percentage of GDP recorded 1.3%, while net foreign direct investment recorded $5.2bn, according to data from the Central Bank of Egypt.
In the same context, the report monitored the expectations of international institutions of an improvement in the proportion of foreign direct investments in the coming years, as the International Monetary Fund’s expectations of net foreign direct investment as a percentage of GDP came to 2% in 2021/22, and 2.5% in 2022/23, and 2.9% in 2023/24, and 3% in 2024/25.
The fund also expected that net foreign direct investments would record $8.6bn in 2021/22, $11.7bn in 2022/23, $14.9bn in 2023/24, and $16.5bn in 2024/25.
In a related context, the World Bank expected that net foreign direct investment as a percentage of GDP would record 1.7% in 2021/2022, and 1.9% in 2022/23.
For its part, Fitch International confirmed that the stability of the Egyptian economy will contribute to attracting more foreign direct investments in the non-oil sectors.
The report dealt with the vision of international institutions to improve the investment climate in Egypt, where Oxford Economics confirmed that Egypt possesses a diversified industrial base that can be considered as a source of attraction for foreign investments, in addition to its large market and skilled labour.
In turn, the Oxford Business Group praised the series of economic reforms and financial and monetary measures that have been implemented in recent years, explaining that they contributed to making Egypt the first destination for foreign direct investment at the level of the African continent and the second at the level of the Middle East and North Africa in 2019.
On a related level, The Economist stated that foreign investment flows to Egypt, which amounted to $5.9bn in 2020, showed that they retained the confidence of investors in the long term, while expecting renewable energy sources to be an important attraction for foreign direct investment and support the growth of the Egyptian economy.
In addition, the European Bank for Reconstruction and Development announced the continuation of the rise in private investment flows and foreign direct investment in order to maintain the achievement of Egyptian economic growth.
While the Human Development Report 2021 indicated that the Egyptian state aimed to provide a stable environment that enhances confidence in the Egyptian economy and restores foreign direct investment flows, amid praises from various international institutions for the success of the economic reform experience in Egypt.