Egyptians were surprised when the UAE-based Etisalat paid LE16.7 billion for the license to operate the third mobile network. Since this investment was followed by many other deals worth multi-millions, 2006 can be considered the watershed year for FDIs in Egypt. The fierce bidding that took place over the mobile network was repeated in the sale of Bank of Alexandria (BoA) to the Italian SanPaolo IMI for LE9 billion, and the Sidi Abdel-Rahman land sale to UAE-based Emaar for more than LE1 billion. Altogether, FDIs reached $6.1 billion during the year, compared to $5 billion in 2005 and only $3 billion in 2004. In fact, the World Investment Report of the United Nation Conference on Trade and Development ranked Egypt as the second largest country in attracting foreign investment in Africa in 2006. The streamlining of investment procedures could be one of the key reasons for this boom, since the number of days needed to establish a new company were diminished from 14-140 days to only three days. There was also a strong drive by Arab investors to make their mark on the Egyptian market as a result of a sharp increase in oil prices. Most Arab investments targeted the financial and real estate sectors, while industrial activities seemed less appealing. Another important attribute of increased FDIs, is less interest in the oil sector which reached only 30 per cent in 2005/2006, compared to almost 80 per cent two years ago. Two out of the five consortiums bidding for BoA had heavyweight Gulf financial institutions, including the Saudi-based Arab National Bank, the Dubai-based Mashreq Bank and the Dubai Investment Group. The United Bank of Bahrain acquired Delta International Bank; Naeem Holding, an Egyptian free zone firm with a majority Saudi shareholding, started a wide investment banking service in Egypt; Saudi Arabia's Anwal bought up mega department store Omar Effendi; and UAE-based Damac is developing Gamsha Bay on the Red Sea. Meanwhile, many Arab banks continue to pursue small financial entities in Egypt. Some of the most persistent problems hindering FDIs continue, with the World Bank Doing Business 2007 report ranking Egypt 165th among 175 countries surveyed on the ease of doing business. According to the report, entrepreneurs in Egypt can expect to go through 10 steps before they can launch a business, at a cost equal to 68.8 per cent of Gross National Income (GNI) per capita. They must deposit at least 694.7 per cent of GNI per capita in a bank in order to obtain a business registration number. In comparison, investors tapping the South East Asian country of Singapore -- which ranks first on the World Bank list -- have to go through six steps to launch a business, at a mere cost of 0.8 per cent of GNI per capita, and no deposit is needed for a commercial registry number.
