Sponsored by   Mudabala
 
 
Advanced Search
BETA
Loading Loading ...
Tue, 09 Feb 2010 | 20:49 GMT
Tue, Feb 09, 2010, 20:49 GMT
 

Egypt: Investment Declaration

 Oxford Business Group
 
Email
Print
Comment
PDF
Text Size  
 
19 July 2007
On July 11 Egypt became the first Arab as well as the first African country to sign the Organisation for Economic Cooperation and Development (OECD) Declaration on International Investment and Multinational Enterprises. The declaration, which was signed by the original OECD member states in 1976, has since been joined by outside nations, predominantly from South America and Eastern Europe. Signing it signals a policy commitment to improving the investment climate in the country and encouraging further participation from multinationals in the growth of the economy.

Prior to a signing ceremony in Paris with OECD Secretary-General Angel Gurria, Egyptian Minister for Investment Mahmoud Mohieldin said the invitation to join the declaration represented recognition of recent improvements in the country's investment climate. "This declaration is a way for governments to commit to improving their investment climates, ensuring equal treatment for foreign and domestic investors and encouraging the positive contribution that multinational companies can bring to economic and social progress," said Mohieldin.

A new OECD report on Egypt entitled 'Investment Policy Review of Egypt 2007' due for full release in September highlighted the rapid growth in foreign direct investment (FDI) in the country. According to the report, FDI increased twelve-fold between 2001 and 2006 from $500m to $6.1bn and diversified away from its traditional destination, the oil and gas sector.

Mohieldin told OBG he expected to see "no less than $10 billion" in FDI in 2007. "In 2003, the composition of FDI was mainly dominated by the oil sector with 80%. Last year, [the breakdown of FDI] was 55% in expansion in greenfield projects, 30% in oil and 15% in acquisitions," he said.

The OECD report cited improved business registration procedures, a streamlined Customs policy and tax reform as drivers behind the growth in FDI. The waiting period for property registration has dropped from 193 days to under a week and the ministry of trade and industry is reducing import tariffs across the board. Of particular note was the decision to cap corporate tax at 20% and make the tax system more streamlined by eliminating around 3000 exemptions.

The report was not without its reservations. Existing restrictions on foreign ownership in the fields of construction, electricity and transport run contrary to the principles outlined in the declaration. In particular, it states that adhering countries must treat foreign-controlled businesses no less favourably than local enterprises. However, in the construction industry for example, foreign equity is limited to 49%. The OECD report said, "Removing these restrictions would increase competition and benefit consumers and business." Restrictions that prevent non-Egyptians from representing clients in a court of law were also suggested for review.

Simon Kitchen, an economist with Cairo-based CI Capital HoldingCI Capital HoldingLoading..., told OBG he was unsure "whether some of the OECD's recommended reforms - particularly those concerned with legal representation and arbitration - can be addressed by the government in the next few years. Legal changes fall outside the remit of the main reforming ministries, so change may be slow."

Despite the shortcomings highlighted by the OECD report, the signing of the declaration is a significant marker for Egypt's progress for attracting FDI. Kitchen said, "The declaration will help to cement some of the improvements made in the investment environment over the past five years. On a political level, it also represents something of a coup for Egypt as the first Arab and African country to sign the declaration."

Looking to the future, Mohieldin said that FDI would continue to diversify, both in its sources and its targeted sectors. He told OBG, "We are still getting FDI from OECD countries, including the US and EU, and more from the Gulf and some countries that were not investing heavily in Egypt in the past such as China, India and Turkey. We also have investments from neighbouring countries in Africa. In terms of sectors it's no longer just oil, but manufacturing, tourism, real estate development and the agricultural sector. One of the things this ministry will always be associated with is the silent revolution which has led to the attraction of FDI."

© Oxford Business Group 2007

 
x DISCLAIMER

Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.

Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
 
 
Access to this article is subject to specific terms and conditions. Read Disclaimer.
 
 
 
Community Comments (0) - Comment on this article
The opinions of the authors expressed herein do not necessarily state or reflect Zawya. Read our Comment Policy.
 
 
 
Loading ...
 
close x
Report Abuse
Loading ...
 
 
Loading ...
close x
Zawya Comment Policy:
 
  1. Zawya encourages you to add a comment to this discussion. You agree that when you add content to this discussion your comments will not:
    1.1   Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
    1.2   Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
    1.3   Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
    1.4   Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
    1.5   Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
    1.6   Give the impression that they represent Zawya.
    1.7   Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.
  2. The content posted on www.zawya.com is created by members of the public. The views expressed are theirs and unless specifically stated are not those of Zawya. Zawya reserves the right to review all comments prior to posting and edit or delete any contribution, but Zawya is not responsible for and can not be held liable for any content posted by members of the public on www.zawya.com.
  3. Zawya is not responsible for the availability or content of any third party sites that are accessible through www.zawya.com. Any links to third party websites from www.zawya.com do not amount to any endorsement of that site by Zawya and any use of that site by you is at your own risk.
  4. By submitting your comment, you hereby give Zawya the right, but not the obligation, to post, air, edit, exhibit, telecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comments worldwide, in perpetuity.
 
 
 
 
 
Community Buzz

Stories

 

Companies

Most viewed companies by Community in the last 24 hrs
Company Name Country Industry
Consolidated Contractors Company Overseas Construction and Design
Zuhair Fayez Partnership Consultants Saudi Arabia Construction and Design
Saudi Binladin Group Saudi Arabia Construction and Design
Saudi Electricity Company Saudi Arabia Electric Utilities
Barwa Real Estate Company Qatar Landlords and Developers
Roads and Transport Authority - Dubai UAE Regulatory and Administrative Bodies
Mubadala Development Company UAE Investment Firms and Funds
Ministry of Health - Saudi Arabia Saudi Arabia Ministries and Municipalities
Abu Dhabi Oil Refining Company UAE Oil
Qatar General Electricity and Water Corporation Qatar Electric Utilities
 

Projects

 

Blogs

 
 
 

 
 
 
 
 

Site is optimised for viewing at 1024 x 768 with Internet Explorer v6 and Firefox v3.0 and above.
Copyright © 2010 ABQ Zawya Ltd. All rights reserved. Please read our Membership Agreement