Why Egypt - Krajowa Izba Gospodarcza · rationalization program , by : •Subsidizing the final product . •Incentivizing household to reduce their excessive consumption through

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Why Egypt 1. Central Location with strategic Trade

Agreements:

Egypt has an exceptionally strategic geographic location bordered by the Mediterranean Sea to the North, Red Sea to the East and traversed by the longest river in the world the Nile.

Egypt, as an active participant to WTO, has access to 1.5 Billion Consumer Market through various multilateral and bilateral Trade agreements (The EU-Egypt Association Agreement, EFTA, QIZ, TFTA , COMESA, AGADIR, Egypt- Turkey free trade agreement, PAFTA, MERCOSUR); which secures benefits to Egyptian-based producers supplying these markets.

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Why Egypt

2. Access To A Large Consumer Base In Egypt And Beyond

Egypt is the most populous country in the Middle East and the third-most populous in Africa. Egypt is a strategic consumer market with population of 88 million in 2014; whereby 69%of Egypt’s population is below 35 years as witnessed by the sharp expansion of retail sales over the last decade.

3. Diversified Growing Economy:

Diversity is a key strength of the Egyptian economy as reflected in the notable contribution to growth made by 6 to 8 leading sectors in the past few years. The economy’s diversity enhances its ability to absorb internal as well as external shocks. It also presents multiple opportunities for investors across many sectors.

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Why Egypt

4. Qualified And Competitive Labor Force :

Egypt has a large labor pool of over 26 million skilled and well-trained

multilingual individuals, with more than 60% of the population is under the

age of 30, with cost $360 per month .

5. Reformist Investment Climate:

The Government has embraced an intensive 3 dimensional promotion strategy

based on business reform, FDI attraction, and investor care

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Why Egypt 6. Improving Infrastructure:

• 6.2 million telephone landlines, 95.2 million cellular phone, 47.2 million

internet users

• international airports 20 airports including 10 conforming to

international standards

• 15 main seaports

• Railway Network 9,570 km (191 operational train stations)

• Road network 99,829 km.

• 108 industrial zones, 13 investment zones, 231 free zones, 1 special

economic zone.

• The Suez Canal

• National Road Network of 108,784 Kilometres with a plan to add 3,200

km over the medium term.

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Why Egypt 7. An Economy That Is Resilient To External And Internal Shocks

The Egyptian economy’s ability to post positive real economic growth rates

amid the global economic downturn as well as during the political unrest that

prevailed in 2011-2013 indicates how resilient economic activity in Egypt.

8. Dynamic Business Environment More Reliant On Private Investments

• Total implemented investments increased almost three folds between FY

2002/2003 and such growth was motivated by GoE’s subsequent

investment climate reforms, paving the way for higher contribution of the

private sectorin economic activities.

9. Abundance In Natural Resources

Mineral Resources and Renewable Resources.

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10. Unprecedented Returns AND SOLID FINANCIAL SECTOR:

Egypt’s Stock Exchange (EGX) was named Africa’s most innovative stock exchange

in 2014 by Africa Investor (Ai): Egypt’s main stock market index, the EGX30,

recorded significant gains of 51%, 24% and 32% in 2012, 2013 and 2014

respectively despite two major revolutions in 2011 and 2013. Such remarkable

performance was supported by the raft of capital market reforms implemented

by the Egyptian Financial Supervisory Authority (EFSA) and the Egyptian

Exchange (EGX). This includes the simplification of listing requirements and

documentation, issuing of regulations governing block trading, and, most

importantly, finalizing the regulatory framework regarding the listing and trading

of Exchange Traded Funds (ETFs) on EGX, including its market making

requirements. Trading on the first ETF on EGX30 commenced in January 2015.

Why Egypt

A business environment favourable to investment

•52 Double Tax Avoidance Agreements •111 Investment Protection Agreements •Member of OECD Investment Committee •5 main investor protection schemes endorsed by GAFI •Member of MIGA (Multilateral Investment Guarantee Agency)

•A stimulus package introduced by The Ministry of Industry to facilitate investments in the industrial sector

•Lifting the security approval requirement for media companies.

•Processing reforms related to the technical operations at GAFI`s one stop shop

Investor

Protection

Legal Reforms

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•Issuance of law 32/2014:

That reinforces the legal standing of past contracts with the state, a law that limits appeals/challenges to contracts between the government and investors to the parties involved only. The law should limit the impact of the recent issues of some earlier privatized companies.

Legal Reforms

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The amended unified investment law will be submitted to parliament within next month; to facilitate investment procedures, land provision and secure investors . The Supreme Investment Council, chaired by President Abdel Fattah Al-Sisi, during its 1st meeting, has approved 17 pivotal resolutions; including a number of tax exemptions and incentives and offering free or discounted land in a bid to attract investors amid economic and political instability.

Investment

Law

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Tax Policy Reforms The Government of Egypt (GoE) has introduced real estate taxes, dividends taxes, and approved a new VAT to replace the general sales taxes, all to widen the tax base Energy Reforms The GoE embarked on a comprehensive reform plan including energy products’ price (subsidy) reforms, an increase in electricity tariff in accordance to a plan for 5 years that is communicated to the public, and developing the regulatory infrastructure to increase the share of renewable in the energy mix.

Legal Reforms

&

Economic

Reforms

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Flexible Monetary Policy The CBE has floated the Egyptian pound Nov. 2016, to better reflect market fundamentals and boost the competitiveness of the economy. Food Subsidies and Social Safety Nets The GoE pursued an ambitious food subsidies rationalization program , by : • Subsidizing the final product . • Incentivizing household to reduce their excessive

consumption through rolling out a smart reward system allowing discretionary savings to be used to purchase other subsidized items.

Economic

Reforms

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legislative and

regulatory

measures

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• Reinforcing the legal standing of past contracts with the state limiting appeals to contracts between the government and investors to the parties involved only

• Amending investment law to boost investor confidence and end longstanding investor disputes

• Reviewing of the procurement law to present and faster and easier legal framework for public funds protection and corruption prevention

• Introducing Microfinance law to corporations increase income and access to finance to most needy individuals

legislative and

regulatory

measures

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• Building Infrastructure of electronic registration to reduce time and cost required for company’s incorporation

• Building a regulatory management system that reviews and rationalizes business regulations while promoting justice and transparency

• Establishing an inventory of more than 30 business regulations on e-registry to support the decision making process and assess socio economic impact of new regulations

• Mapping countless investment opportunities with priority given to labor intensive, export oriented sectors with high competitive advantage

Registering Property The Egyptian government to expedite and simplify registering property In Egypt : • Issuance of Law. 83/ 2006 which introduced a flat

fee of to register a property or building. • Egypt speeded up property registration by

simplifying administrative procedures, reorganizing the business workflow between the real estate registry and the Egyptian Surveying Authority and introducing time limits for several procedures.

Procedures

Reforms

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Registering Property The Egyptian government is working on some reform measures : • Complete automation of the real estate system

and electronic registration of real estate. • Activation of the electronic payment system. • The application of one-stop system to shorten

the procedures to a single procedure

Procedures

Reforms

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Enforcing Contracts The Egyptian government made enforcing contracts easier by creating commercial courts which was established by Law No. 120 of 2008. The Egyptian government is working on some reform measures in this indicator for example:

• Identifying specific deadlines for the judicial procedures.

• Drafting a law for mediation. • Full Automation for the courts and linking them

to a single network.

Procedures

Reforms

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Egypt’s Medium-Term Strategy and Outlook

The medium-term macroeconomic framework and strategic plan encompasses concrete policies, programs and projects to realize the government’s vision: a productive and efficient economy that generates high, sustainable and inclusive growth.

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Egypt’s Macroeconomic Targets FY18/19

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General Indicators

Population

92.7 Mn. In April 2017

Annual General Inflation Rate

33.1% in Feb. 2017

Net International Reserves

28.5USD billion by the end of Mar. 2017

Net Foreign Direct Investments

1st half FY2016/17 : 4.3 billion USD FY2015/16 :6.8 billion USD FY2014/15: 6.4 billion USD FY 2013/14 : 4.1 billion USD

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General Indicators EXPORTS

(FY2012/13) 26.9 USD billion

(FY2013/14): 26.1 USD billion

(FY2014/15) : 22.1 USD billion


(1st Quarter 2016/17) : 5.3 USD billion

IMPORTS

(FY 2012/2013) 57.5 USD billion




(1st Quarter 2016/17) : 13.9 USD billion

Average Exchange Rate during

1st half FY 2016/17

Euro € 1.09 $

Dollar $ 11.59 EGP

British pound £ 1.27 $

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FDI in Egypt

11.10

13.20

8.10

6.80

2.20

4.00 3.80 4.10

6.4 6.8

4.3

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 First half

2016/17

8.10

9.10

2.70 3.20

2.38

3.90

2.80 2.50

3.8

4.5

2.4

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 First Half

2016/17

Total FDI

Billion UD $

Source: CBE

Billion UD $

FDI (Greenfield & Expansion)

Foreign Direct Investment

Inward & Outward FDI flows

Source: Central Bank of Egypt

2007/08 2008/09 2010/09 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

17.8

12.8 11

9.6 11.8

10.3 10.9 12.9 12.4

-4.6 -4.7 -4.3 -7.4 -7.8 -6.5

-6.8 -6.5 -5.6

Inflow Outflow

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Bn

. $

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1.8% 2.2% 2.1%

2.2%

4.4% 4.3%

3.4%

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 First Quarter 2016/17

GDP growth rate

Source: CBE

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Trade

26.9 25.1 26.9 26 22.2

18.7

5.3

54.1 59.2 57.7 60.2 61.3

56.3

13.9

0

10

20

30

40

50

60

70

80

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 First Quarter 2016/17

Exports Imports

Billion UD $

Source: CBE

Thank you for your attention

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Documents

Why Egypt - Krajowa Izba Gospodarcza · rationalization program , by : •Subsidizing the final product . •Incentivizing household to reduce their excessive consumption through