• Nadim Samna

30 reasons to invest in Egypt

Updated: Dec 4, 2020

Egypt, one of the oldest civilizations, is today becoming one of the hottest investment destinations. Seven years ago, the Egyptian government adopted a long-term strategy to boost the performance and economic attractiveness of the country. Starting with monetary reforms with the assistance of the IMF, Egypt has implemented one of the most successful programs of economic turnaround. The Egyptian experience was praised by all international institutions and is presented as the example for developing countries to follow.


In parallel with monetary reforms, the authorities have been conducting many infrastructure megaprojects (transportation, energy, digital transformation, legislative) to prepare Egypt for a long period of sustainable growth.


The fruits of these reforms and huge investments are already having an impact on the Egyptian economy. Based on IMF predictions, Egypt will be one of only 18 countries to enjoy economic growth in 2020 (revised upwards to + 3.5% in September after a June forecast of 2%). Long-term growth should be close to 8%.


Growth is accelerating, and business opportunities are emerging like nowhere else in the world. Egypt is clearly open for business. Having worked during 20 years in 15 countries located in 3 continents, I can confirm that the magnitude of change achieved by Egypt, greatly surpasses anything I have seen before.


Below, you will find 30 strong reasons why you should consider Egypt as your next investment destination.



Investors will find many market opportunities in Egypt, as well as untapped growth potential


1. Vast market, thanks to a large (100 million) and young (average age 25) population, which is expected to reach 160 million by 2050.


2. One of the most diversified emerging economies, making Egypt resilient to crisis and economic cycles.

3. No. 1 investment destination in Africa and the Middle East.

4. The eighth-highest contributor to global growth in 2019 (PPP-based), according to Bloomberg, thanks to multiple growth engines.




Infrastructure is ready to support business growth


5. Ranked 28th worldwide for road quality, thanks to the huge investments undertaken by the government (Egypt was ranked 115th as recently as five years ago).

6. Cheap, abundant, and diversified energy sources (gas, solar, hydro-, wind, and nuclear).

a. Excess capacity of 15 gigawatts after a deficit in 2013.

b. Regional center for gas transformation and export to Europe, thanks to large reserves and established processing facilities.

c. One of the largest solar parks in the world, Benban, covers 37.2 km2 and is visible from space. The facility produces 4 TWh of electricity per year.



7. Determination to boost green energy production and use.

a. Renewable energy target at 60% by 2035

b. First country in the MENA region to issue green bonds, 5X oversubscribed

c. National program to replace gasoline by LNG and to rely in the near future on locally produced electric vehicles.

8. Tripling of Internet speed in just 12 months and still accelerating.

9. 887 new laws passed, and 294 international treaties ratified in the last five years to attract foreign investors and increase the efficiency of government services.

a. new investment law

b. digitization of customs

c. digitization of tax collection

d. many more initiatives expected particularly in the new administrative capital

10. Already signed trade treaties giving free access to 2.6 billion people including 47 European countries, and 19 Eastern and southern African countries (Comesa).

The location of Egypt has always been an unmatched advantage throughout human history


11. Proximity to many European markets, gateway to Africa, regional hub for the Middle East (confirmed by Amazon’s recent decision to set-up in Egypt its regional manufacturing hub).

12. What can we say about the Suez Canal, through which 10% of the world’s traffic moves?

13. Spared from most natural catastrophes such as hurricanes, volcanos, cyclones, and tsunamis.


The 100 million population offers an immense pool of talent



14. 569,000 fresh graduates in 2018, including 30,000 engineers and 8,000 doctors (compared with 6,000 annual medical graduates in Germany).

15. 125 general universities by 2030 teaching disciplines most in demand, such as robotics, artificial intelligence, health-tech, IoT, an increase from the current 72 universities.

16. Ranked 56th out of 172 countries in Government AI Readiness Index, jumping 63 places in a single year.

17. Wide use of European languages, particularly English, making Egypt a hub for international call centers (e.g. Vodafone).

18. Cheap labor, thanks to the low cost of living: average monthly salaries are $150 for workers and $400 for engineers.

19. Strong healthcare system, thanks to 1848 hospitals in 2018 (France has 1400) powered by a brand-new healthcare law based on best practices from the UK, US, and French systems.


Egypt offers a rich and mature business environment

20. 38 commercial banks, 39 insurance companies, many investment banks, numerous law firms, specialized local and international management consulting companies, multiple chambers of commerce for specific sectors or bilateral cooperation with foreign countries, several governmental bodies providing reliable data about the Egyptian market (CAPMAS, ECES), rich choice of office space, free zones benefitting from exemptions from customs taxes, sales tax, and many other fees.

21. A sound banking system considered the most efficient worldwide (cost-to-income ratio less than 30%).

22. Egypt hosts 138 foreign embassies, higher than the 121 embassies in the UAE and the 112 embassies in the Kingdom of Saudi Arabia.

23. Price purchasing parity (PPP) of 4.33 according to the world bank , making Egypt four times cheaper than the US (and even cheaper compared to many European countries).

24. Ranked the eighth-safest country in the world, according to a Gallup Global Law and Order report, ahead of all European countries except Norway and Switzerland.

Egypt is beating all macroeconomic targets 25. Strong long-term growth prospects averaging between 6% and 8%; one of only 18 countries (and the only country in the MENA region) expected to have positive economic growth in 2020 (+ 3.5%), according to the IMF; same positive outlook for the European bank for reconstruction and development, making Egypt the only economy across all of the EBRD regions likely to escape recession in 2020.

26. Seventh-largest economy by PPP in 2030, according to Standard chartered predictions.

27. Stable currency: one of the few emerging currencies to appreciate against the dollar in 2020 (+ 2.1% YTD on October 31st).

28. Political stability proven by the smooth democratic process to elect the representatives of both parliament chambers in 2020.

29. Shrinking trade deficit, increasing remittances (+ 7.8% year on year after seven months of 2020), rebound of Egypt’s reserve of foreign currencies to reach USD 38 billion, covering eight months of imports.

30. Second-highest real interest rate in the world, despite recent rate cuts, making Egypt the new darling of emerging markets, foreign investors’ holdings of government T-bills reached $21 billion in mid-October, up from $10.4 billion by the end of May 2020, only country in the Middle East and Africa to maintain its credit rating with a stable outlook at the big three rating agencies, despite Covid-19 challenges.

On top of all these rational reasons, Egypt offers a magnificent climate, splendid sandy beaches, rich coral seas, mind-blowing historical monuments, and a most vibrant social life. All these additional aspects offer a superb quality of life for foreign expats.



Last but not least, Egyptians are genuinely one of the warmest and most friendly people on earth, bonding easily and appreciating long-lasting relationships.





So, what are you waiting for? Come to Egypt and we will help you explore investment opportunities!


Author



Nadim Samna

Managing Partner



Recent Posts

See All