—
Osama Salehi, Chairman, General Authority for Investment, Egypt
The General Authority for Investment is Egypt's principal government authority
for regulating and facilitating investment in and out of the country. GAFI is also
Egypt's sole 'One Stop Shop' for investment, which aims to ease the way for investors
to take advantage of the opportunities in the northeastern African nation's emerging
market.
Osama Salehi talks to
Lalitha Rao about GAFI and its role in attracting
investment from world over and growing ties between India and Egypt.
Tell us about GAFI's recent initiatives
in promoting foreign
investment in Egypt?
GAFI plays an active role in promoting
and facilitating FDI in
Egypt. With initiatives like the
OSS (One Stop Shop), GAFI has
revolutionised the investment
process in Egypt. The One Stop
Shop has (also) revolutionised the
process of establishing a company
in Egypt and created a condensed
option that allows foreign companies
to register in a record 72
hours. Minimum capital investment
has been removed to facilitate
registrations. Incentives such
as the abolishment of the minimum
capital and simplifying the
process for prospective investors
are drivers in making Egypt an
appealing FDI market.
Which are the key areas in the
industrial and services sector
where Egypt is seeking foreign
investment?
Infrastructure, agri-business
and renewable energy are true
key areas for investment with a
wealth of investment opportunity
for countries like India.
Infrastructure: There are 47
projects in the public utilities
and infrastructure sectors in
Egypt worth $25 billion, which
provide ample scope for foreign
investors to come and share
their expertise and knowledge
on sustainable long-term projects.
The range of current infrastructure
projects in Egypt
reach every sector of the economy
and offer unique investment
opportunities based on attractive
public-private partnerships.
The local economy has
rapidly opened up, with GDP in
its fifth successive year of uninterrupted
and steadily accelerating
growth.
Agri-business: The agricultural
sector in Egypt supports
an estimated 55 per cent of
Egypt's population and reclamation
plans are expected to
generate another 440,000 jobs,
directly and indirectly, by 2011.
The agricultural sector has a
major impact on the Egyptian
economy. It represents approximately
20 per cent of both GDP
and exports, while it employs
almost 30 per cent of the working
population.
Energy: Egypt is a true leader
in the renewable energy sector
in the region through the creation
of a regional Renewable
Energy and Energy Efficiency
Center, supported by EC, GTZ
and Danida, and is co-President
of the Mediterranean
Solar PlanPF. The New and
Renewable Energy Authority
has done extensive work over
the past 13 years, building a
very comprehensive state-ofthe-
art wind atlas for Egypt in
cooperation with Risoe National
Laboratory. By 2022, at least
7,200 mw could be implemented
within the Gulf of Suez and a
further 1,000 mw on the west
and east banks of the Nile.
What advantages does Egypt
offer vis-à-vis other African
nations?
Egypt serves as a hub in the
region with its proximity to
Europe and Asia, possessing
two of the three major high-traffic
routes that are instrumental
to the region. Today, Egypt has
become one of the most desirable
foreign investment locations
and boasts innumerable
investment success stories
across diverse sectors. Government
incentives, stability and a
cost-efficient and educated
workforce make Egypt a prime
location for investment.
Egypt is enjoying growth in
numbers and opening new
regions for investment. Investment
is coming from new areas
like China, India, Malaysia, Singapore
and Hong Kong and this
part of the world. Egypt is a
country that has seen possibility
of growth, prospects of investments,
where people are aspiring
for a better future.
Which countries lead in terms
of investment in Egypt and
where does India rank?
Egyptian-Indian ties have
been growing at the political,
economic, cultural and scientific
levels in recent years. Visits
have been exchanged by top
officials in both countries with
the purpose of boosting bilateral
relations, especially given
Egypt's drive to strengthen and
promote cooperation with the
regional powers in Asia, particularly
China and India.
In 2009, bilateral trade
amounted to $2.7 billion,
increasing by over 300 per cent
since 2004, in which the trade
volume recorded $563.8 million.
India has now become Egypt's
4th largest trading partner, after
the US, Italy and Spain. In 2003,
Indian giant Reliance signed a
contract with the Egyptian General
Petroleum Corporation to
import eight shipments of raw
oil in 2003. In August 2004, the
Indian company GAIL procured
15 per cent of the Egyptian company,
NatGas, which deals with
marketing and distributing natural
gas in Egypt.
The top Indian companies withoutward investments in the
country are Wipro for outsourcing;
Mahindra & Mahindra for
automotive and IT services;
Infosys for IT consulting; Jindal
for steel; ONGC for petrochemicals;
and Tata Group for
consumer products, IT services
and energy. The companies
which are in the pipeline for
setting up a base in Egypt are
Essar for a refinery project;
Reliance for a petrochemical
complex; Tufropes for propylene
ropes; Kitply for wood
from rice husk; and Marg for
scientific park.
What trends do you foresee in
the medium term with respect
to India's investment in Egypt?
The total Indian participation in
issued capital is $133.3 million
(1970-2009), reflecting the
activities of 291 companies
operating in Egypt. India is
ranked 36th among the countries
investing in Egypt. The
total net Indian investment in
Egypt reached about $68.8 million
between 2003-2004 and
2008-2009. The jump in 2008
investment flow was due to the
establishment of the Egyptian-
Indian polyester company
EIPET.
The prime areas for Indian
investment are petrochemicals
and energy, infrastructure, manufacturing
and agriculture, and
there are existing success stories
and increasing potential for
Indian companies.
Discuss key reforms and policy
changes that Egypt has adopted
to make it a "friendly" place for
doing business.
Egypt's policies and reforms
ensure stability and incentives
for investment in Egypt. Tax
reforms and considerable
improvements from government
bodies make it a safe and
attractive location for investment.
Egypt currently ranks 24
on the World Bank's 'Doing
Business Guide'.
GAFI undertook a comprehensive
survey in 2001 to identify
both the concerns and needs of
foreign investors potentially
interested in setting up a company
in Egypt. This resulted in setting
up the OSS as a pilot programme
in Alexandria and
today it has a hub in Cairo and
existing offices in Alexandria,
Ismailia and Assuit.
The eventual aim is to have
OSS branches in all the 28 governorates
of Egypt. GAFI plans
to expand its network and
establish 28 OSS offices to meet
the growing demand of
investors as well as implement
an online component. GAFI
offers 32 investment services to
generate FDI in Egypt and
close to 30,000 companies were
registered in Cairo alone,
excluding Alexandria, Ismailia
and Assuit, at the OSS.
Egypt was traditionally known
as an exporter of (manual)
labour. Where does Egypt stand
today in terms of skilled manpower?
Egypt has a large pool of
trained talent pool that is highly
educated and the government
has instated many service and
training programmes to equip
them with the skills needed to
succeed in areas such as ICT
and development. This high
educated and low-cost workforce
is the key in creating a
prime investment climate and
encouraging FDI in Egypt.