1 / 36

Egypt at a Glance

0. Egypt at a Glance. GDP growth rates were at 1.8% during FY 2010/2011 and it reached 2.2 % in FY 2011/2012. Net international reserves reached to USD 15.0 bn. by the end of Nov. 2012.

yates
Download Presentation

Egypt at a Glance

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 0

  2. Egypt at a Glance • GDP growth rates were at 1.8% during FY 2010/2011 and it reached 2.2 % in FY 2011/2012. • Net international reserves reached to USD 15.0 bn. by the end of Nov. 2012. • FDI in Egypt recorded a net inflow of around US$ 2.1 billion in FY 2011/2012 (against US$ 2.2billion in FY 2010/2011). It reflected the decrease of 4.5 % due to 25th Jan revolution • Annual Inflation rate has reached 4.25% in Nov. 2012, after it had been 6.7% in Oct. 2012 , after declined to 6.2% in Sep. 2012 ,compared to 6.4 % in Aug & July . • Unemployment rates: 12.6 % during the 3rd quarter of 2011/2012 . • Egyptian exports were worth $ 7.0 billion during 1st of FY 2012/2013 while imports were worth $ 16.0 billion during the same period. • Exchange rate for the USD 1st of FY 2012/2013 : ( 6.08 ) EGP. Source: CBE

  3. Macro Overview | 2012-Economic Impact • The release 2011/12 data shows a rise in real GDP growth reached 2.2% Sectoral Breakdown of Total Investments in FY 2011/2012 GDP Quarterly Growth Rates Source: Ministry of Planning

  4. Growth & Investment • Since 2004, Egypt has implemented 22 reforms to improve the investment climate. • The establishment of the Investors Dispute Settlement Center within GAFI. • The establishment of special economic courts to expedite dispute settlement resolutions. Private & Public Investments EGP Billion Private Investments / GDP Private Investments / Total Investments 3 Source: Ministry of Planning

  5. Risks: Rising Budget Pressures Gross Domestic Debt / GDP • Fiscal deficit to GDP recorded 9.5% in FY2010/2011 and 11% for 9m 11/12 • In spite of improving tax revenues, GOE expenditures, namely subsidies, interest payments , and wages maintained a double digit growth in Q311/12 • Current negotiations with the IMF/ WB and other financing packages should impact positively on the borrowing costs and in turn the fiscal deficit Fiscal Deficit / GDP Source: Central Bank of Egypt

  6. Macro Overview | Longer-Term Outlook Solid Fundamentals “New Egypt” Investor Confidence Location Democracy Investment Growth Demographics Commitment to Economic Reform &Social equality CostEdge ClearGovernance Improved Macro Fundamentals & Growth Potential Economic Reform Reduced Corruption

  7. Why Invest in Egypt • A sustained growth rate of 7% over the period between 2005 and 2008. • Despite being affected by the current political unrest during the FY 2010/2011 growth rate which was 1.8% , and it reached 2.2 % in FY 2011/2012. • Egypt has a diverse economy. • A large population and hence a large consumer market where per capita income was at EGP 17.052 in 2010/2011. • At around 26.9 million in Q2 2012, Egypt has the largest labor pool in the region with a competitive labor cost.

  8. Egypt’s New Objectives • Real growth rates are reached 2.2 % in 2011/12.and is expected to reach 3.1 % in FY 2012/13 • Reducing inflation; with the aim of bringing inflation levels closer to those of neighboring countries. • Maintaining a flexible exchange rate set by free market forces, while avoiding short term volatility. • Upgrading the quality of government services. • Social policy reform through expanding social security nets and promoting pro-poor programs while reforming the subsidy structure.

  9. The Ease of Doing Business • Time to establish a company: 72 hours • One Stop Shops gather all sectors and entities dealing with investors. • Removing restrictions on minimum capital of limited liability companies and reducing incorporation fees. • Launching the first phase of electronic establishment of companies through the internet (in Arabic) • Property registration fees reduces where cap is at EGP 2000 • Establishing the Egyptian Credit Bureaus (i-score) • 20% flat tax rate, according to the Tax Law No. 91 of 2005. • Reducing the time necessary to register property from 72 to 38 days. • Introduction of Nilex; The region’s first small cap stock exchange • Reducing the average custom tariff to 6.9% while tariff items have been reduced to six items only (previously 27). Source: CBE

  10. Low Cost of Doing Business • Competitive tax rates - corporate and personal tax rates top out at only 20% • Developed infrastructure with 15 commercial ports in addition to 44 specialized ports to serve importers and exporters, an expanding airport network catering to both passengers and cargo. • An abundance of natural resourcesand competitively priced water, power and gas. Source: CBE, Ministry of Investment

  11. Preferential Access to Key Global Markets The EU – Egypt Association Agreement grants Egypt preferential access to the EU market of 500 million The EFTA-Egypt Free Trade agreements grants access to the markets of Iceland, Liechtenstein, Norway and Switzerland in industrial and agricultural products. Free duty access to the US market of 300 million customers through the QIZ protocol. The COMESA, a common market for Eastern and Southern Africa creates a free trade area among the 19 member states. AGADIR Declaration creates grants Egypt a free trade zone between Egypt, Morocco, Jordan, and Tunisia in addition to a rules of origin advantage. Egypt – Turkey free trade agreement GAFTA: ratified by 22 Arab nations, involving the phasing out of customs and duties while eliminating non-tariff barriers Source: CBE

  12. The process of registering foreign company subsidiaries to only three days of processing time. The time to open foreign representation offices; 3 days while simplifying administrative steps related to establishing a business. Enhancing import and export flexibility through import and export certificates that are available for 3-5 year periods. New facilities for investors include: Paying subscription fees to chamber of industry and the federation of Egyptian industries at the one stop shop Increasing GAFI’s processing centers. Lifting the security approval requirement for media companies. As well as lifting licensing requirements for print publications. An initiative to provide resources for a credit risk guarantee program to help develop SMEs and help them gain access to bank financing. Support and Incentives for Investments

  13. A stimulus package has been introduced by The Ministry of Industry to facilitate investments in the industrial sector through: Reducing the value of Letters of Guarantee required to acquire land from industrial zones. Inspections by the Industrial Development Agency(IDA) are to be done upon request by the IDA chairman. Enforcing the role of IDA representative offices in governorates to issue all required approvals, except for land allocation. In case of fulfilling required terms of issuing an industrial registry, a permanent industrial license is issued and renewed every 5 years. Support and Incentives for Investments

  14. The issuance of Law no. (11) for year 2012 which provides incentives for taxpayerson the full or partial payment of their deferred income/sales taxes, the law is effectedon three stages: Stage one: 25% discount on the investors’ taxable revenue in case of payment beforethe 31st of march 2012. Stage two: 15% discount on the investors’ taxable revenue in case of payment beforethe 30th of June 2012. Stage three: 10% discount on the investors’ taxable revenue in case of payment before the 31st of December 2012. The new incentive scheme has actually resulted in an increase of 10% to the collected taxes by applying only the first stage of the law. Support and Incentives for Investments

  15. There are five investor protection schemes which GAFI is currently endorsing: Investor protection

  16. Investment Policy Framework

  17. FDI After the January Uprising • 15743 new companies/expansions have taken placeover the period between January 2011 and Nov. 2012 witha total capital of USD 16.7 billion, providing more than 356579 jobs. • Egypt’s ongoing drive to promote investment combined with greater transparency and a broader ownership of the national economic reform agenda will leverage Egypt’s inherent strengths. • BP is expected to invest USD 11 billion, GE to invest EUR303 million, Italy’s ENI to invest USD 18 billion, while Qatar is to launch two mega-projects worth more than USD 9 billion of investments and providing 1.2 million job opportunities.

  18. FDI in Egypt Today • Pegas Nonwovens SA (PEGAS), a Czech maker of special textiles used in hygiene products and health care • GlaxoSmithKline plc announced that it will invest US$ 84.7 million in Egypt’s healthcare sector over five years to expand its product portfolio • Al-FuttaimGroup will invest about US$ 300 million in 2012 to continue construction of Cairo Festival City project. • In April 2011, the Kuwait Investment Authority (KIA), set up a company worth $1 billion in capital to invest in Egypt's stock market • Electrolux, the Swedish appliance company, acquired a 52 percent stake in Egypt’s Olympic Group at a cost of US$ 350 million. • The Turkish company KCG announcement to raise its investments in Egypt by establishing 3 new projects valued at USD400 million in the textiles, electricity generation, and mining in Sinai. • The Indonesian company “Multistrada” announced establishing a tire factory in partnership with an Egyptian manufacturer, the project value is USD320 million.

  19. FDI in Egypt Today • In April, 2011, China Development Bank signed a memorandum of understanding and cooperation with Commercial International Bank and Commercial International Investment Company in Egypt to cooperate in infrastructure and loans for SMEs • In July, 2011, the Egyptian Hydrocarbon Company (EHC) was established with paid-up capital of USD150 million; the first private sector industrial project to be implemented in Egypt at international prices with no subsidies. Total investments of the project are USD454 million., And there are also expectations for the company to further expansions in the coming years • In June 2011, Cisco announced it will invest USD10 million. The venture capital investment will be targeted at high-potential small businesses that provide innovative products and services. • The Turkish group “Limak” to carry out enhancement capacity project of Terminal 3 in Cairo International Airport with investments worthUSD387 million.

  20. FDI in Egypt Today • The Indian company Dhunseri petrochemicals Ltd. established a 160 million dollars company in Sharkyia governorate in the field of plastic production providing 500 job opportunities • The Malaysian Islamic Finance company, AMANI , announced the establishment of a USD 500M fund. • Coca-Cola , announced that will invest about one billion $ in the African Markets including Egypt, over next years to expand their Investment • Jushi Group Chinese Co. will establish the largest Chinese project in Egypt with investments of $ 300 million, operates in the field of Fiber Optics, a manufacturer of electronic related industries, in other hand will create 450 job opportunities • The Indian Company , Sinmar for Chemicals, announced that will invest about $200 million in Port Said , which will produce PVC to meet the growing needs of the Egyptian market . • Samsung company will establish an electric appliances project in Egypt with total investment of $ 270 million, which suppose to create 1200 job opportunities • LG Company announced that will invest about $ 265 million to establisha home appliance complex , which will create 1000 job opportunities

  21. Bedaya Center for Small and Medium Investments (SMIs) • Establishment • Bedaya Center for Small and Medium Investments was established in January 2010 and aims to implement GAFI’s strategy of developing small and medium investments. • Mission • To support the growth and development of the small and medium investments in Egypt; in line with the national strategy towards create new sustainable jobs while raising economic development indicators.

  22. Bedaya Center for Small and Medium Investments (SMIs) • The Pillars of SMI Strategy • Facilitating SMEs access to finance: Through establishing a EGP 1 billion private equity/venture capital fund while assisting and supporting SMEs in accessing required credit guarantees to enhance their chances in accessing credit. • Providing business development services:Non financial technical support that includes easing technology transfer, introducing investment opportunities and providing technical training for entrepreneurs to acquire the necessary skills. Creating clinics for fostering SME growth during the first five years of their lifetime. • Promoting entrepreneurship activities:Through a process of selection of projects based on creativity, value added and initial viability and providing the necessary support. • Integrating SMEs in the supply chain of large companies:Enabling SMEs to play a more active role in the supply chains of big corporations and gaining access to bigger, more sustainable markets and hence changing the Corporate-SME relationship to a win-win relationship.

  23. 6.8 Priority Sectors and Clusters • The energy sector is enormous, the government sector is encouraging foreign investment in the sector where natural gas is the evermore important revenue generator. • 63 new explorations were made in the FY 2009/10 while 11 new ones were made inQ1 2010/11. • Natural gas production recorded a decrease of 3.4% in Q1 2010/11 while that of crude oil recorded a an increase of 2.3% during the same quarter compared to Q1 of 2009/10. • Domestic consumption of petroleum products increased by 7% during Q1 2010/11 compared to the same period of the previous year. Source: ECHEM

  24. 6.8 Priority Sectors and Clusters • One of the most vibrant sectors in Egypt. • Egypt is home to many regional offices of large multinational companies such as Microsoft, Oracle, France telecom and Intel. • The total number of direct employees in the CIT sector reached 214.65 thousand employees in April 2012, this figure includes IT, Telecom, Post and Smart village employees • Total investments in ICT amounted to 1.8% and 1.0% of total implemented investments in FY 2010/2011 and FY 2011/2012 respectively. Source: ITIDA; BMI; MCIT

  25. 6.8 Priority Sectors and Clusters • There was a 14.85% increase in the number of companies operating in the CIT sector in Egypt between April 2011 and April 2012, recording 4655 company. • Egypt has three advanced mobile phone networks. All three either have, or soon will have 3.75 G infrastructure, they serve over 91 million subscribers as In April 2012. growing by 23.41% since April 2011 – and hitting a penetration rate of 112.64% • In 2010/2011, the CIT sector has sustained an annual growth rate of 11.53%, and received about EGP 45.35 billion in 2011, Annual growth rate of this issued capital (2010-2011) has recorded 1.21%. Moreover, the sector generates revenues of EGP 47.12 billion and CIT sector contributes 4.28% to real GDP. Source: ITIDA; BMI; MCIT

  26. 6.8 Priority Sectors and Clusters • The healthcare sector is an important growth sector, the core areas of investment include private hospitals, health tourism, pharmaceuticals, rural healthcare and continuing education programs. • Egypt is home to the largest trained workforce in the region such that 10,000 medical school graduates graduate annually, more doctors and pharmacists than any other country in the Middle East. • High doctor to patient ratio such that in 2010, Egypt recorded 7058 physicians, 13.95 nursing staff ,in addition to 1.32 dentists and 1.96pharmacists per 10 thousand citizen • Increase in Investment Appeal. Private investments in health care amounted of EGP 2.35 Billion in 2010/2011. • Upgrade of the National Healthcare System. The government’s plan to overhaul the national universal healthcare system will drive new traffic to more than 1607 hospitals  and will create additional opportunities for investment, particularly through the PPP program • In April 2012, the country’s first PPP project was announced for a healthcare project in Alexandria. It’s an integrated medical city established over an area of 200 Feddan in Western Alexandria, containing hospitals and clinics, recovery centers, five star hotels, R&D centers and laboratories, and a center for medical education Source: Ministry of Economic Development, CAPMAS

  27. 6.8 Priority Sectors and Clusters • With the expected depletion of natural gas reserves within the next 57 years, Egypt is an investor’s dream when it comes to sustainable energy resources. Egypt possesses an abundance of land, sunny weather and high wind speeds, making it a prime resource for three renewable energy sources: wind, solar and biomass • Recent political changes have not affected Egypt’s long term commitment to renewable energies. The promotion of renewable energies became a political aim that is shared across the political spectrum. Although renewable energy is relatively a new market in Egypt, the country’s strategic location and the government’s commitment to increasing its renewable energy output make it an attractive investment opportunity. A new policy framework had been approved in February 2008 that fosters an investor friendly system and encourages foreign as well as private sector involvement. • The government expects the renewable energy sector to produce 20% of total power generation by 2020, 12% of which will be generated by wind energy. Priority sectors are wind farms (the most cost-effective renewable energy source), followed by biodiesel production, both of which are supported by the country’s abundance of land, stable climate conditions and competitive labor force • With solar energy costs expected to decline sharply over the next 5 to 7 years, Egypt aims to develop a competitive market in solar energy, but sees more immediate opportunities in wind and biomass. Renewable Energy Source: GAFI

  28. Priority Sectors and Clusters • Egypt is open to foreign participation in higher education and training in order to meet the demands of the global market place. • There are currently 2.5 million university students . Servedby 39 universities (20 public and 19 private). • As per the government investment for university and higher education estimates about EGP 4.1 billion in 2012/2013. • As per the total number of students enrolled in private institutes 313931 till June 2012. • The number of public schools increased from about 36 thousand schools in the year 2006/2007 to more than 40 thousand schools in the year 2010/2011. • As per the number of private schools is 5662 school year 2010/2011. • Total government investment for pre-university education plan in 2012/2013, about EGP 4.5 billion, • Of the multilingual workforce of more than 332,000 university graduates in 2009/10 41,000 were specialized in education.

  29. Priority Sectors and Clusters • The Industrial Sector • The sector represents an important and advanced rank in the national economy and is strongly interrelated with several production and service sectors along with boosting foreign trade and improving the balance of payments. • The sector amounts to 6.3% of growth rates during Q1 of FY 2010/11 compared to 4.9% during the same period of the previous year. • Total investments are worth EGP 25.5 billion and EGP 8.8 billion were poured into the industrial sector during FY 2009/10 and Q1 of FY 2010/11 respectively.

  30. Investment opportunities Mega Projects 1. East Port Said • GAFI is adopting this project through the Mega Projects Unit in order to achieve the vision to support investment projects in various fields. • The integrated development of East Port Said opens prospects for new development outside the Nile Valley and Delta, and contributes to the re-distribution of Egypt's population over the next 30 years. • The development is in alignment with the implementation of the Sinai strategy. • East Port Said Port - one of the most important ports to the major hub in the Mediterranean region is expected to be largest during the years. • New urban city (millions) in Port Said - The total area has about 36 thousand acres. • The industrial area east of Port Said - largest industrial area in Egypt 87 km 2 (20,700 acres). • Agriculture area- reclamation of 60 acres in sahl El-tena region. • Other projects ( sues canal tunnel in port said - electric train crossing the Suez Canal). وحدة المشروعات القومية ومشروعات الـPPP – الهيئة العامة للاستثمار

  31. Mega Projects 2. Upper Egypt- Red Sea Road (Sohag / Safaga) • Upper Egypt-Red Sea Company was established in November 2008 under the law of the Investment Guarantees and Incentives No. 8 for the year 1997. 200,000 acres of land were allocated to the company, under the Decree No. 356 of 2008 • Key projects include an integrated residential city on an area of ​4,300 acres to provide 24,000 housing units. • Other projects include:a) Three dry ports in the governorates Assiut, Sohag ,Red Sea east ,Qanab) A sea water desalination plant powered by solar or normal power, and serves the coast line from a source of sea water wells . Urban Communities

  32. 3. Special Economic Zones North West Suez Canal Mega Projects • Project Description: Area of 16.4 Km2 North East Suez Canal – Special Economic Zone (Sokhna). Attract the private sector to develop the first phase of the project with an area of 6.8 Km2 to manage, operate and maintain the infrastructure and utilities, and promote the Zone • Sponsor: The General Authority for Investment • Investment Cost: • 800 Million pounds • Status: The Chinese Company “TIDA” has been contracted for developing phase one of the project

  33. PPP Projects

  34. PPP Projects • Planned projects: • These projects are being studied at the PPP central unit and are expected to be tendered within the first quarter of the FY 2012/2013:

  35. The General Authority for Investment and Free Zones Who We Are: GAFI is the principal governmental authority concerned with regulating and facilitating investment and stands ready to assist investors worldwide. Vision: Position Egypt as the location of choice for business and innovation Mission: Enabling and sustaining Egypt’s economic growth through investment promotion, facilitation, efficient business services and advocacy of investor friendly policies. Mandates: Promoting Egypt’s potential sectors while attracting new investments and promoting reinvestments and expansions. Facilitating and providing services to investors through the “One Stop Shop” in addition to supporting and accelerating the development of competitive and strategic clusters. Contact GAFI: www.gafinet.org

  36. Thank you

More Related