Egyptian Investment Minister Ashraf Salman joins the 11th Annual EFG Hermes One on One in Dubai to send the message that Egypt's pro-business reform agenda is bearing fruit

Dubai, 3rd March 2015: It's all about the message of reform, Egyptian Investment Minister Ashraf Salman said yesterday to an audience of over 400 top global investors and senior leaders from more than 105 listed companies in the MENA region today in Dubai. Having attracted USD 1.8 billion in foreign direct investment in the first quarter of the government's 2014-15 fiscal year, the Arab world's most diverse economy is on track to close out the year with USD 8 billion in total FDI inflows -- double the figure for the previous year.

Salman's comments came during a keynote interview with EFG Hermes Head of MENA Strategies Simon Kitchen at the opening of the eleventh annual EGH Hermes One on One. The gathering is the premier investor conference in the MENA region and attracted this year listed companies with an aggregate market cap of nearly half a trillion dollars for meetings with global investors controlling AUM in excess of USD 10 trillion.

With less than two weeks to go before the start of the much-anticipated Egypt Economic Development Conference (EEDC) in Sharm El Sheikh, Egypt, there is a lot at stake and Salman is at the center of it all. Widely viewed as a make or break conference on Egypt's journey back to rapid economic growth, the EEDC is a chance to prove to the region and the world that Egypt is on the right path.

Salman explained that the EEDC should be viewed as a building block. "We as a nation and as a government have seen the problems, we know the obstacles and the impediments to growth, and we want to reassure investors that we are working to address them. We are well aware that it is not just about attracting higher levels of FDI, which will take time -- it's about creating the right investment environment," said Salman.

One of the most daunting problems the government has had to tackle is the dismantling of an archaic subsidy system that has been in place for more than 60 years.

"What makes the reforms different this time around is the fact that the Egyptian people are firmly behind the process in a way that has never happened before. They are willing to face up to the challenges, as we have seen with their support of the removal of petroleum subsidies and their backing of the New Suez Canal by fully subscribing to certificates worth more than EGP 60 billion in just eight days," said Salman.

The minister emphasized that while specific megaprojects will be presented at the Sharm El Sheikh conference, the focus of the gathering will be on the overall reform story, including the liberalization that has taken place in high-profile industries including infrastructure, tourism, energy, real estate, petrochemicals, retail and SMEs.

Asked about Egypt's new investment law, Salman noted that the government is working on multiple fronts to create a more favorable investment climate. It would be a mistake, he suggested, to focus only on the investment law rather than the full basket of pro-growth legislation on which his government is working, including laws on labor, energy, mining and microfinance.

"We are finalizing a 10-year plan that will allow Egypt to generate an additional 70 GW of electricity, including 8 GW of renewables and 8 GW of coal. The liberalization of the energy sector now sees the private sector able to generate and distribute electricity," he said.

Addressing outstanding investor disputes, streamlining procedures to enter and exit investments and providing all types of investors with guarantees they can repatriate their funds are all issues that the government is currently addressing.

Meanwhile, the minister said, "I won't personally defend the capital gains tax, because I don't like it. We are working with the Ministry of Finance to come up with a workable solution that doesn't require a 6% deduction up front," said Salman, who said he hopes to have an announcement on that front within the coming two weeks.

He also announced that there has been significant progress to resolve outstanding issues with investors. A dispute resolution committee led by the prime minister's office has resolved 11 of 25 major disputes; GAFI has set the record straight in 259 out of 359 disputes on their agenda during the past six months.

"We are really working fast on this front and we have added a full mechanism for dispute resolution in the new investment law," said Salman.

On the tax front, Salman said that the government is working on putting together a clear tax strategy with fixed taxation for a 10-year period rather than providing a system of tax incentives to lure new investors.

"Inflation is also a concern," said Salman. "We are watching and managing inflation and the best way to do that is to attract more FDI. We are optimistic about the Sharm El Sheikh conference in that respect. In addition to the projects to be presented, we will also be signing done-deals such as a USD 2.5 billion investment in retail malls. Also, our first USD 1.5 billion sovereign bond which will be launched in June to be followed by a second offering in September. So we will have dollars coming in from FDI, sovereign debt as well as deposits from supportive Gulf countries. I don't want to sound over-confident, but I think it is clear this will help us to manage inflation in the coming year."

Going forward, Salman concluded, Egypt will look not just to be a constructive actor for a stable region, but will also remember the assistance it has received in the last year and a half from the United Arab Emirates, Saudi Arabia and Kuwait, saying, "Egypt owes a deep debt of gratitude to countries with whom we share common interests and aspirations."

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For more information, please contact:
Carmen Audino
Sahara Communications
Mob: 00971554563251                           
carmena@saharagcc.com 

© Press Release 2015