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Egypt: Calls Made to Review Investment Laws, Increase Incentives

A general view of banks, hotels, office and residential buildings in the center of Cairo, Egypt, September 13, 2018. REUTERS/Amr Abdallah Dalsh
A general view of banks, hotels, office and residential buildings in the center of Cairo, Egypt, September 13, 2018. REUTERS/Amr Abdallah Dalsh
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Egypt: Calls Made to Review Investment Laws, Increase Incentives

A general view of banks, hotels, office and residential buildings in the center of Cairo, Egypt, September 13, 2018. REUTERS/Amr Abdallah Dalsh
A general view of banks, hotels, office and residential buildings in the center of Cairo, Egypt, September 13, 2018. REUTERS/Amr Abdallah Dalsh

Investors, businessmen and economists have called for the need to review Egypt’s investment laws, increase investment incentives and rely on the free zones system to strengthen the Egyptian economy in light of the current global challenges.

Twenty-six representatives of major investment companies and executive agencies, as well as business experts, discussed the most important challenges and proposals that would support the Egyptian economy, during the 9th workshop organized by the Council of Ministers’ Information and Decision Support Center, within the framework of an integrated research project to prepare scenarios to deal with the global economic situation during 2023-2024.

Dr. Mahmoud Khattab, Chairman of the Board of Directors and Managing Director of B.TECH, stressed the need to ensure consistency in the administrative decisions regulating commercial and investment activities, limit the multiplicity of supervisory and oversight agencies, and increase the facilitation of tax procedures to push forward the business movement.

Bassem Fayek, office co-leader for Boston Consulting Group (BCG) in Cairo, pointed to the importance of maintaining efforts to overcome obstacles facing local investors.

For her part, Dr. Hala Aranda, head of the Public Policy and Government Relations Sector at Amazon Egypt, called for a communication mechanism between the investor, the government and Parliament, to ensure that the various laws are issued after listening to representatives of the business community.

She also shed light on the importance of the participation of investors in policy-making.

Meanwhile, Marwa Mahgoub, a private sector development expert at the International Finance Corporation at the World Bank Group, recommended setting up an implementation plan with a specific timeframe and assignments in the promising productive sectors in Egypt, such as the food and automotive industries, while defining the responsibilities of the government agencies and investors.

Dr. Reham El-Desouki, expert and economic consultant, put forward a set of proposals to increase heavy industry investments in Egypt.

Those included reliance on the free zones system to provide major tax exemptions for investors.

For his part, Moataz Mahmoud, Chairman of Parliament’s Industry Committee, stressed that maintaining the stability of monetary and financial policies would help the investors to maximize their returns.

He added that encouraging investments required a package of tax incentives, especially for industries based on local raw materials.

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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."