Towards Sustainability & Inclusion; To Leave No One Behind

Transcription

1 Improving the Concurrent Status & Building-up/ Securing the Future Towards Sustainability & Inclusion; To Leave No One Behind 1

2 Why Egypt 1. Central Location with strategic Trade Agreements: Egypt has an exceptionally strategic geographic location bordered by the Mediterranean Sea to the North, Red Sea to the East and traversed by the longest river in the world the Nile. Egypt, as an active participant to WTO, has access to 1.5 Billion Consumer Market through various multilateral and bilateral Trade agreements (The EU-Egypt Association Agreement, EFTA, QIZ, TFTA, COMESA, AGADIR, Egypt- Turkey free trade agreement, PAFTA, MERCOSUR); which secures benefits to Egyptian-based producers supplying these markets. 2

3 Why Egypt 2. Access To A Large Consumer Base In Egypt And Beyond Egypt is the most populous country in the Middle East and the third-most populous in Africa. Egypt is a strategic consumer market with population of 88 million in 2014; whereby 69%of Egypt s population is below 35 years as witnessed by the sharp expansion of retail sales over the last decade. 3. Diversified Growing Economy: Diversity is a key strength of the Egyptian economy as reflected in the notable contribution to growth made by 6 to 8 leading sectors in the past few years. The economy s diversity enhances its ability to absorb internal as well as external shocks. It also presents multiple opportunities for investors across many sectors. 3

4 Why Egypt 4. Qualified And Competitive Labor Force : Egypt has a large labor pool of over 26 million skilled and well-trained multilingual individuals, with more than 60% of the population is under the age of 30, with cost $360 per month. 5. Reformist Investment Climate: The Government has embraced an intensive 3 dimensional promotion strategy based on business reform, FDI attraction, and investor care 4

5 Why Egypt 6. Improving Infrastructure: 6.2 million telephone landlines, 95.2 million cellular phone, 47.2 million internet users international airports 20 airports including 10 conforming to international standards 15 main seaports Railway Network 9,570 km (191 operational train stations) Road network 99,829 km. 108 industrial zones, 13 investment zones, 231 free zones, 1 special economic zone. The Suez Canal National Road Network of 108,784 Kilometres with a plan to add 3,200 km over the medium term. 5

6 Why Egypt 7. An Economy That Is Resilient To External And Internal Shocks The Egyptian economy s ability to post positive real economic growth rates amid the global economic downturn as well as during the political unrest that prevailed in indicates how resilient economic activity in Egypt. 8. Dynamic Business Environment More Reliant On Private Investments Total implemented investments increased almost three folds between FY 2002/2003 and such growth was motivated by GoE s subsequent investment climate reforms, paving the way for higher contribution of the private sectorin economic activities. 9. Abundance In Natural Resources Mineral Resources and Renewable Resources. 6

7 10. Unprecedented Returns AND SOLID FINANCIAL SECTOR: Egypt s Stock Exchange (EGX) was named Africa s most innovative stock exchange in 2014 by Africa Investor (Ai): Egypt s main stock market index, the EGX30, recorded significant gains of 51%, 24% and 32% in 2012, 2013 and 2014 respectively despite two major revolutions in 2011 and Such remarkable performance was supported by the raft of capital market reforms implemented by the Egyptian Financial Supervisory Authority (EFSA) and the Egyptian Exchange (EGX). This includes the simplification of listing requirements and documentation, issuing of regulations governing block trading, and, most importantly, finalizing the regulatory framework regarding the listing and trading of Exchange Traded Funds (ETFs) on EGX, including its market making requirements. Trading on the first ETF on EGX30 commenced in January Why Egypt

8 A business environment favourable to investment Investor Protection 52 Double Tax Avoidance Agreements 111 Investment Protection Agreements Member of OECD Investment Committee 5 main investor protection schemes endorsed by GAFI Member of MIGA (Multilateral Investment Guarantee Agency) Legal Reforms A stimulus package introduced by The Ministry of Industry to facilitate investments in the industrial sector Lifting the security approval requirement for media companies. Processing reforms related to the technical operations at GAFI`s one stop shop 8

9 A business environment favourable to investment Issuance of law 32/2014: Legal Reforms That reinforces the legal standing of past contracts with the state, a law that limits appeals/challenges to contracts between the government and investors to the parties involved only. The law should limit the impact of the recent issues of some earlier privatized companies. 9

10 A business environment favourable to investment The amended unified investment law will be submitted to parliament within next month; to facilitate investment procedures, land provision and secure investors. Investment Law The Supreme Investment Council, chaired by President Abdel Fattah Al-Sisi, during its 1st meeting, has approved 17 pivotal resolutions; including a number of tax exemptions and incentives and offering free or discounted land in a bid to attract investors amid economic and political instability. 10

11 A business environment favourable to investment Legal Reforms & Economic Reforms Tax Policy Reforms The Government of Egypt (GoE) has introduced real estate taxes, dividends taxes, and approved a new VAT to replace the general sales taxes, all to widen the tax base Energy Reforms The GoE embarked on a comprehensive reform plan including energy products price (subsidy) reforms, an increase in electricity tariff in accordance to a plan for 5 years that is communicated to the public, and developing the regulatory infrastructure to increase the share of renewable in the energy mix. 11

12 A business environment favourable to investment Flexible Monetary Policy The CBE has floated the Egyptian pound Nov. 2016, to better reflect market fundamentals and boost the competitiveness of the economy. Economic Reforms Food Subsidies and Social Safety Nets The GoE pursued an ambitious food subsidies rationalization program, by : Subsidizing the final product. Incentivizing household to reduce their excessive consumption through rolling out a smart reward system allowing discretionary savings to be used to purchase other subsidized items. 12

13 A business environment favourable to investment legislative and regulatory measures Reinforcing the legal standing of past contracts with the state limiting appeals to contracts between the government and investors to the parties involved only Amending investment law to boost investor confidence and end longstanding investor disputes Reviewing of the procurement law to present and faster and easier legal framework for public funds protection and corruption prevention Introducing Microfinance law to corporations increase income and access to finance to most needy individuals 13

14 A business environment favourable to investment legislative and regulatory measures Building Infrastructure of electronic registration to reduce time and cost required for company s incorporation Building a regulatory management system that reviews and rationalizes business regulations while promoting justice and transparency Establishing an inventory of more than 30 business regulations on e-registry to support the decision making process and assess socio economic impact of new regulations Mapping countless investment opportunities with priority given to labor intensive, export oriented sectors with high competitive advantage 14

15 A business environment favourable to investment Registering Property Procedures Reforms The Egyptian government to expedite and simplify registering property In Egypt : Issuance of Law. 83/ 2006 which introduced a flat fee of to register a property or building. Egypt speeded up property registration by simplifying administrative procedures, reorganizing the business workflow between the real estate registry and the Egyptian Surveying Authority and introducing time limits for several procedures. 15

16 A business environment favourable to investment Registering Property Procedures Reforms The Egyptian government is working on some reform measures : Complete automation of the real estate system and electronic registration of real estate. Activation of the electronic payment system. The application of one-stop system to shorten the procedures to a single procedure 16

17 A business environment favourable to investment Enforcing Contracts The Egyptian government made enforcing contracts easier by creating commercial courts which was established by Law No. 120 of Procedures Reforms The Egyptian government is working on some reform measures in this indicator for example: Identifying specific deadlines for the judicial procedures. Drafting a law for mediation. Full Automation for the courts and linking them to a single network. 17

18 Egypt s Medium-Term Strategy and Outlook The medium-term macroeconomic framework and strategic plan encompasses concrete policies, programs and projects to realize the government s vision: a productive and efficient economy that generates high, sustainable and inclusive growth. The government continues to work steadily on achieving sound public finances and macroeconomic stability in order to provide the foundation on which sustainable growth will be built. Prudent fiscal and monetary policies constitute the core of the medium-term reform program and are geared toward correcting the country s large fiscal and current account deficits, dampening inflationary pressures and reassuring stakeholders that financing gaps are manageable. This policy framework will preserve confidence and encourage economic actors to expand investment activities and consequently consumption, thereby propelling growth. To ensure that growth is sustainable, inclusive and high quality (i.e., investmentled), the macroeconomic policies are being complemented by measures to modernize the business environment, a large hike in public spending on human capital formation, a focus on revamping and expanding physical infrastructure both in Cairo as well as throughout the country, and a big-picture push to develop and launch several megaprojects over time. 18

19 Egypt s Macroeconomic Targets FY18/19 Sustainable real GDP growth reaching at least 6% by the end of the period. A faster pace of job creation in order to bring the unemployment rate below 10% and in particular to address the high rate of youth unemployment. Greater efficiency in government spending in parallel with a planned reduction of the fiscal deficit to 8-8.5% of GDP, and the government debt to within a range of 80-85% of GDP. Headline Inflation within a 6-8% range Higher rates of domestic investment Improved export performance The development of the country s human resources supported by increased spending on health, education and Research and Development (up to at least 10% of GDP) as mandated by the Constitution 19 Enhanced productivity on the national level and continued

20 General Indicators Population Annual General Inflation Rate 91.8 Mn. In Oct % in Sep Net International Reserves Net Foreign Direct Investments 19.6 USD billion by the end of Sep FY2015/16 :6.8 billion USD FY2014/15: 6.4 billion USD FY 2013/14 : 4.1 billion USD FY 2012/13: 3.8 billion USD 20

21 General Indicators EXPORTS (FY2012/13) 26.9 USD billion (FY2013/14): 26.1 USD billion (FY2014/15) : 22.1 USD billion (Jul.- Mar. FY2015/16) : 13.4 USD billion IMPORTS (FY 2012/2013) 57.5 USD billion (FY2013/14) 59.8 USD billion Average Exchange Rate during FY 2015/16 Euro 1.10 $ Dollar $ 8.10 EGP British pound 1.50 $ (FY2014/15) 60.8 USD billion (Jul.-Mar. FY2015/16) : 42.7 USD billion 21

22 FDI in Egypt 13,20 Total FDI 11,10 Billion UD $ 8,10 6,80 6,4 6,8 2,20 4,00 3,80 4, / / / / / / / / / /16 8,10 9,10 FDI (Greenfield & Expansion) Billion UD $ 2,70 3,20 2,38 3,90 2,80 2,50 3,8 4, / / / / / / / / / /16 Source: CBE

23 Bn. $ Inward & Outward FDI flows Foreign Direct Investment 17,8 12,8 11 9,6 11,8 10,3 10,9 12,9 12,4-4,6-4,7-4,3-7,4-7,8-6,5-6,8-6,5-5,6 2007/ / / / / / / / /16 Inflow Outflow Source: Central Bank of Egypt 23

24 GDP growth rate 4,20% 4,30% 1,80% 2,20% 2.1% 2.2% 2010/ / / / /15 Jul.-Mar. 2015/16 Increased confidence in Egypt s economy shown by the gradual pick up in real economic growth rates in recent quarters 4,90% 4,80% 4,70% 4,60% 4,50% 4,40% 4,30% 4,20% 4,10% 4,00% 4,80% Jul.-Mar. FY 2014/15 4,30% Jul.-Mar. FY 2015/16 24 Source: CBE

25 Trade Billion UD $ ,2 57,7 60,2 61,3 54,1 26,9 25,1 26, ,2 13,4 42, / / / / /15 1st half 2015/16 Exports Imports 25 Source: CBE

26 Ambitious Landmark Projects

27 Suez Canal Corridor The new Suez canal project is a waterway project in Egypt, to develop 72km long parallel artificial waterway alongside the existing Suez Canal between the Mediterranean sea and the Red sea. The project is designed to enlarge transit capacity and increase industrial activity in the area. This will allow ships to sail in both directions at the time over much of the canal s length, and double the capacity of the Suez Canal; from 49 to 97 ships a day.

28 The Development of 1.5 million acres The New Valley reclamation project and the development of one and a half million acres the city of Farafra, which is part of reclamation project 4 million acres nationwide, establishing reef Company for this purpose with a capital equivalent to $ 1 bn. The company aims to : Develop new integrated societies based on agriculture and agroprocessing Create value added projects; Maximizing the economic return of the water used.

29 The Northwest Coast Development. The Northwest coast development project is the third initiative drawn by the National Strategic Plan for Urban Development. The project will generate an annual economic growth of at least 12% and provide about 1.5 million job opportunities.

30 Three main Mining Anchors generating multiple Industrial Zones Aprox. 340 thousand hectare The main sectors under investigation are: mining, industry, energy, transport, ports, and logistics, utilities, urban, agriculture and tourism

31 31 Thank you for your attention