Foreign direct Investment inflows from Arab countries into Egypt remain below potential, Beltone Financial said in a press release Wednesday. "FDI inflows from Arab countries into Egypt remain limited and are, in our view, below potential; averaging 14 per cent of total inflows over the past two fiscal years, 10 per cent of which come from Kuwait," the report reads. The comment follows the recent finalizing of two investment bids in Egypt. Kuwait's Kharafi Group yesterday announced plans to increase its investments in Egypt in 2011 through expanding existing businesses as well as making new investments in the tourism and manufacturing sectors. The expansion plan includes investing LE200 m in the Group's Arab Aluminum plant, which would increase its production capacity to 600 thousand tonnes/month, 20 per cent of which will be directed at the export market. Another LE150 m will be injected into Arab Company for Electronics (manufacturer of computers and Samsung televisions), and will aim at increasing the plant's production capacity by 50 per cent. Earlier this week, Switzerland's Nestle also announced its plans to almost double investments in Egypt. "The recent bid by Sweden's Electrolux to acquire Olympic Group is evidence that the Egyptian economy is now attracting large multinational companies looking to invest long-term in Egypt to benefit from its large and dynamic consumer market," the report said. "This news further re-iterates our view that Egypt continues to emerge as an attractive FDI destination." However sources of FDI continue to be dominated by inflows from Europe, "thus lagging the recovery in FDI" the report states. "We do believe, however, that this will change, going forward, as the government moves toward broadening its investment cooperation with the GCC region and starts diversifying its sources of FDI," the report continues. "We believe that the ongoing implementation of domestic reforms, be it regulatory or institutional, will help lure investments back into Egypt, and will support increasing FDI inflows to our forecast level of $8 billion in the current FY10/11, accelerating in subsequent years."
