CAIRO: Egyptian Prime Minister Ahmed Nazif and investors of the Dubai-based Al Futtaim Group agreed to a deal last Sunday that will pour LE 12.5 billion of investments in Egypt over the next five years. The company plans to invest the money in a series of large-scale retail trade initiatives around the country. It plans to do this both by building new retail facilities and developing existing ones. Of the LE 12.5 billion, LE 4 billion will be spent on the construction of 12 new outlets with the rest going to running established businesses. Al Futtaim Group is one of the largest companies in the United Arab Emirates and has projects operating in over 40 different countries, including Egypt. The company does business in eight sectors - automotive, electronics, retail, services, overseas, insurance, industries, and real estate - and is estimated to make up almost 15 percent of Dubai's Gross Domestic Product. Magdy Rady, Egyptian cabinet spokesman, said that the investors approached the Prime Minister's office following an announcement last year that Egypt was looking to develop its retail sector. "The retail sector [in Egypt] is very primitive and the government wants to see it developed, Rady told Daily News Egypt. He said that improving the retail sector would help curb inflation by making the retail process more efficient, thus lowering overall prices. It would also formalize some of the informal economy, which is mostly comprised of small retail businesses with no mechanisms for quality control. "The deal is part of a growing trend of investment from abroad in Egypt, he said. "In addition, the Gulf is quickly becoming the number one investor, which is a good thing. We've always had a special relationship with other Arab countries but this has not always manifested itself in the form of investment. Foreign investments have indeed skyrocketed in Egypt over the past five years, partially due to government efforts to liberalize the investment climate. In 2002 and 2003, for example, foreign companies invested only $0.7 billion, whereas in 2007, this number is expected to exceed $10 billion. The UAE has recently become one of the top three countries investing in Egypt, along with Russia and the United Kingdom. Rady said that the government is looking forward to the employment opportunities Al Futtaim's investments would create - 70,000 during the time of construction and 25,000 in the long term. "The Egyptian government's motto has always been to provide jobs to the Egyptian people. But local investment is not enough. At this point, we must also seek out foreign investment if we want to maintain economic growth and keep Egyptians employed, he said.
