Since the beginning of the year, several announcements of investors tapping the Egyptian market or increasing their investments have been music to the ears of economic policymakers. Mercedes-Benz, a division of the German automaker Daimler AG, said it has plans to start a new assembly plant in Egypt. The move was highly welcome on more than one front. As President Abdel-Fattah Al-Sisi has put it, it is “a step that reflects the improvement of the investment environment” following the implementation of Egypt's reform programme. It is hoped that the move by a brand name like Mercedes would encourage other investors to enter the Egyptian market. The testimony by Markus Schäfer, member of the divisional board of Mercedes' production and supply chain, that “Egypt is an attractive and competitive location for production and supporting logistics” should assure other global manufacturers follow suit. Egypt also plans to cooperate with Mercedes to develop its automotive industry, said Al-Sisi. Moreover, a press release by Daimler said it has offered Egypt its expertise in modern mobility concepts, electro-mobility and electric cars as well as autonomous driving. More positive news came from Don Kwak, executive director of LG Electronics, who told Minister of Investment and International Cooperation Sahar Nasr that his company plans to pump $15 million worth of new investments in Egypt, expanding existing production lines. The company has some $240 million of investment in Egypt and it exported $200 million worth of goods last year, representing 75 per cent of its production. On a similar note, according to presidential spokesperson Bassam Radi, Italian oil company ENI said late last week that it plans to increase investment in Egypt in the coming period. ENI CEO Claudio Descalzi told President Al-Sisi that his company had pumped in some $13 billion in investment in Egypt since 2015. These announcements come as Egypt strives hard to create a business-friendly environment by introducing new laws, pushing for institutional reforms, rolling out state of the art infrastructure and taking measures to incentivise and make life easier for investors. The reforms have so far borne fruit. Foreign direct investment is expected to reach $8.5 billion in the current fiscal year and rise to $9 billion next year. The reforms in place hope to provide a stable environment that enhances confidence in the performance and ability of the Egyptian economy to attract investment, Minister Nasr recently said, asserting that legislative reforms to improve the investment climate are continuing. Egypt's reform programme, in implementation since late 2016, is often hailed during international meetings. Angel Gurria, the head of the Organisation of Economic Cooperation and Development (OECD), recently said the legislative reforms that have been carried out by Egypt created a suitable business climate that is capable of luring more investment to the country. Gurria made the remarks during the “Private Investment for Sustainable Development” conference which held this week in Paris as part of a focus on the role of the private sector in achieving Sustainable Development Goals (SDGs). It is important that the government's effort to eliminate bureaucracy and speed up procedures for investors continue. While investments have been increasing, they have largely been focused on the oil and gas sector. While the latter sector is important to realising Egypt's target of becoming a regional and international energy hub, more needs to be done to attract investment in job creating manufacturing sectors.
