Promoting the investments in Egypt: AmCham Egypt

Interview with Hisham Fahmy, CEO of American Chamber of Commerce in Egypt

Please give us your evaluation of the current business environment in Egypt and what role the American Chamber plays in this regard.

There is a sense of optimism in the business community. The macro economic decisions, which have been taken lately, might seem to indicate a higher inflation in the economy. However, those decisions have been far overdue; as the subsidy issue in particular has exasperated the country’s economy and affected the credit rating of Egypt in general and on the outlook to investors.

We work on promoting trade and investment between Egypt and the United States through serving our members and the entire business community and advocating on their behalf for a favourable business environment and fostering a socially responsible business environment.

We currently connect more than 1800 senior executives through a membership network that spans different industries, sizes and nationalities. AmCham’s advocacy work focuses on trade liberalization, creating a friendlier business environment and addressing common challenges.

The Egypt4 Business Campaign:

On behalf of Egypt’s private sector, AmCham Egypt has recently has launched a strategic communications campaign; aiming at:

• Highlighting the successes of the private sector
• Strengthening the “Egyptian Brand” and position it as a brand that supports FDI through engagements with stakeholders and forging strategic partnerships.
• Changing the current narrative on Egypt from one focused on uncertainty, unease, and potential conflict to one that emphasizes economic opportunities, prosperity, and a young and dynamic workforce that is moving the country forward.
• Bringing about much needed confidence to Egypt’s business community.

We are currently working on delivering credible and consistent messages targeted at strategic stakeholders with direct and indirect influence and insight into foreign direct investment and economic growth opportunities.
  
So far, we have been successful in our media outreach efforts as part of this campaign. To view the campaign outcomes, please check the special page on our website: http://www.amcham.org.eg/invest/egyptbusiness.asp  

How could be the Egypt’s industrial competitiveness achieved/maintained in the long-run?

As with many sectors in the Egyptian economy, industrial competitiveness is related to amongst other things several factors. Those factors include the following:

• Ease of doing business i.e. breaking down of bureaucratic hurdles
• Combating corruption
• Stable economic outlook

By a stable economic outlook we refer to stability in terms of energy, foreign exchange, tax regime and labor laws & regulations.

The qualified industrial zones agreement aims at increasing the exports. Which sectors in particular profit from the agreement and where do you see the future opportunities?

QIZ has been a very successful program and has created nearly 300,000 local jobs. Its main exports have been in the textile sector and I believe this should be expanded to incorporate other potentially successful sectors of the economy.  We currently see great potential in the agriculture and processed foods industry. The agriculture sector contributes 17% of GDP, employs 7 million Egyptians, has been the center stage for the stability of the Egyptian nucleus family, noting the fact that 50% of the Egyptian population depends directly or indirectly on the agricultural sector. This sector was and still is thriving noting the fact that Egypt has a population of 85 million & will be accommodating 30 million tourists by 2020. We also look forward to the expansion of the QIZ zones throughout Egypt!

Please identify the most attractive investment opportunities that Egypt has to offer to international investors.

The most attractive investment opportunities that lie within the Egyptian economy reside in three main sectors. The three key sectors that uphold great potential to investors are as follows:

• ICT
• Real Estate
• Agriculture

ICT

The global knowledge revolution is placing ever-increasing demands on developing societies. Egypt is building a strong and durable information society for the future. It is determined to decrease the digital divide and position itself firmly among its peers in the international arena. Governing Egypt’s initiatives is the Ministry of Communications and Information Technology – MCIT. It was formed specifically to facilitate Egypt’s transition into the global information society, through The Information Technology Industry Development Agency, ITIDA.

Egypt is an ideal location to base a business with regional – and even global – ambitions leading global players ranging Intel and Oracle to Orange and Vodafone have established product development divisions and call centers serving global operations. The ICT sector contributes by 4.4% of the GDP in 2013. There was a 14.85% increase in the number of companies operating in the ICT sector in Egypt between April 2012 and April 2013, recording 5243 company.

Real Estate

Egypt is Covering 1,001,449 km2, In fact, Egypt has a land area about the same as that of Texas and New Mexico combined, it’s four times bigger than that of the United Kingdom and twice as big as that of France. Egypt is mostly desert, with only 35,000 km2 – 3.5% of the total land area cultivated and settled. Most of the country lies within the desert which brings a great opportunity for the real estate industry. The purpose for most Egyptians is not only buying houses to live in; they in fact find it more valuable to invest in the real estate industry, which provides this industry with great opportunities. To sum up, there is a huge room for investments in the real estate market in Egypt. According to statistics – The Egyptian real estate market, whether public or private, provides no more than 350,000 units, whereas 600,000 units are required!

Agriculture

The agriculture sector contributes 17% of GDP, employs 7 million Egyptians, has been the center stage for the stability of the Egyptian nucleus family, noting the fact that 50% of the Egyptian population depends directly or indirectly on the agricultural sector. We foresee a serious drive toward a regulatory reform in this sector championed by the current minister & backed by a vibrant civil society that will ultimately ease the process of doing business. The 2014 constitution clearly addresses long awaited   binding articles that will result enhancing the agriculture business sector at large. Finally, as defined by a study conducted by Booz Allen, on behalf of the Agricultural modernization council, Egypt can accommodate investments of $ 55 billion by 2020 in the Agro / Industrial Sector that should contribute to an increase of 2 – 3% to the GDP!

What challenges/obstacles do businesses in the country face on a daily basis?

The main challenges that currently face the business community are as follows:

• Ease of doing business i.e. breaking down of bureaucratic hurdles
• Combating corruption
• Stable economic outlook
• Access to skilled/well trained labor force

What is your personal vision for the country?

I remain optimistic on the vision for this great country. Egypt has several very attractive factors; beginning with the genius of the location – Egypt offers easy access to markets in the Arabian Gulf, the Levant, North Africa and Sub-Saharan Africa, Asia as well as Europe. It’s a country that is blessed with great weather all year round, the Suez Canal and the Nile. Its trade agreements with the Arab World, Europe and Asian Pacific are a tool yet to be optimized by foreign investors whom will tap into the potential and wealth that this nation encompasses. Finally, I must remain optimistic as Egypt compels the business community to take notice of its human capital wealth. This country is known to have one of the youngest populations in the world. With 60 % of the population between the ages of 18-25. There must be room for creativity, hard work and endless potential!

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