Despite an array of economic reforms that Egypt embarked on last year, its rank retreated to 128th on the ease of doing business. The ranking comes in a report by the International Finance Corporation that measures the readiness of a business climate to incubate small and medium sized enterprises (SMEs). In 2016, Egypt was in 122nd place. The report covers reforms introduced until May 2017 only. Since then various other reforms related to faciliating investment have been introduced. The report focuses on regulations that affect enterprises across 11 areas. These include starting a business, dealing with construction permits, getting electricity, registering property, acquiring credit, protecting rights of minority investors, paying taxes, trading across borders and enforcing contracts. A total of 190 economies are ranked according to their ease in doing business using those criteria. Egyptian reforms in 2017 focused on improving the business climate for domestic small and medium enterprises and protecting minority investors. “Egypt has strengthened minority shareholder rights and their role in major corporate decisions, a continuation of efforts over the past four years,” said the IFC press release. The current government, led by Prime Minister Sherif Ismail, is trying to revive the economy through a package of business incentives represented in a new investment law and launching initiatives to finance SMEs which was passed by parliament this year. Several improvements have also been made in getting credit, including the establishment of a well-functioning private credit bureau. But the report shows that Egypt is lagging in the areas of paying taxes, where it ranked 167th, and trading across borders, where it ranks 170th globally. “It takes 265 hours to obtain the right paperwork to import, for example, four times longer than the global average of 66 hours,” the IFC said. The IFC also warns that the rise in the cost of verifying and ratifying a sales contract makes the registering of property more difficult. The Egyptian government is projecting growth rates of between five and 5.25 per cent in 2017-2018. This is compared to a much less ambitious target of 4.5 per cent by the IMF. As 2017 marks the report's 15th year, the report this time also includes a comparison between Egypt's rank and performance on the different measures now and where it stood 15 years ago. Egypt has carried out 29 reforms related to making its work environment conducive to investments since the IFC first issued its annual “doing business” report 15 years ago. The total reforms in the last 15 years led Egypt to be in a competitive position in the Middle East and North Africa region. IFC said Egypt's reforms had passed Jordan with 19 reforms, Tunisia 19 and Algeria 16. In the early years of the report, in 2004, Egypt embarked on a set of reforms under former prime minister Ahmed Nazif that pushed growth rates to seven per cent and succeeded in balancing the forex market and attracting $13 billion in foreign direct investments. But after Hosni Mubarak was toppled in 2011 the unstable political situation greatly affected the business environment. The Gulf region was more active during the same period with 30 reforms in Saudi Arabia and 33 in the United Arab Emirates, in addition to Morocco which also passed Egypt by adopting 31 reforms.
