Attracting FDI EGYPT has attracted the lion's share of foreign direct investment (FDI) directed to the Arab world over the past five years, according to a recent report. With $124.5 billion worth of project commitments made between January 2015 and December 2019, the country accounted for 35.2 per cent of the $340 billion invested in the region in the period. A report by the Arab Investment and Export Credit Guarantee Corporation (Dhaman), a Kuwait-based multilateral investment guarantee provider, noted that a total of 476 new projects, or 10.9 per cent of total foreign projects in the Arab world, were launched in Egypt during the five-year period. The report highlighted the fact that the total value of investments directed to the region in the first quarter of 2020 had dropped by 27.2 per cent year-on-year in value terms. Japan, the US, France, the Philippines, Belgium, Saudi Arabia, Germany, Bahrain, China, and India were the top 10 countries committing FDI to the Arab region. Based on the capital expenditures and profits figures of more than 5,000 multinational companies, the report expected a decline of FDI of anywhere between 21 and 51 per cent in 2020 due to the impacts of the Covid-19 pandemic. Iraq followed by Egypt, Saudi Arabia, and Tunisia will shoulder most of the drop in FDI until the end of the year, the report said.
Oil arrears down THE ARREARS due to international oil companies exploring Egyptian oil fields fell to $850 million at the end of June compared to $900 million a year earlier as a result of financial pressures caused by the Covid-19 pandemic, Petroleum Minister Tarek Al-Molla has told Reuters. The companies have been reluctant to make further investments in oil-exploration and production out of fears that they will not be paid, and this has led to a decline in production and led to Egypt becoming a net gas importer. Production has declined since 2014 even as Egypt sought to become a regional energy hub. The arrears due to the companies were supposed to have been cleared by June this year, according to a letter sent to the International Monetary Fund in January.
*A version of this article appears in print in the 6 August, 2020 edition of Al-Ahram Weekly
