Foreign investment is trickling back to Egypt - but will it continue? (Photo: Reuters)
Foreign direct investment in Egypt has made a partial recovery following last year's uprising, with inflows hitting $2.5 billion in the first half of 2012, a United Nations report said on Tuesday.
The return of relative political stability and a series of high-profile acquisitions by mainly Arab investors helped Egypt bounce back from the $100 million net outflow it recorded in the first six months of 2011.
FDI, however, remains far below the $4.1 billion seen in the opening half of 2010.
"Progress towards political stability has allowed the country to attract foreign direct investment," Astrit Sulstarova from the UN's Conference on Trade and Development, the body behind the report, told Ahram Online.
The year-on-year climb for the Arab world's largest nation came amid an 8 per cent drop in global FDI inflows due to heightened global economic uncertainty, the report showed.
FDI to the African continent as a whole rose by 5 per cent.
Sulstarova credits France Telecom's recent buy-out of Egypt's Orascom Telecom Media and Technology, along with other financial sector acquisitions by Arab investors as being behind the surge.
Political turbulence had resulted in "low valuations" for Egyptian firms which had made them attractive to investors, she said.
Recent announcements pointed "to the possibility of a continued recovery of FDI flows" for Egypt, Sulstarova added, citing potential investment plans by energy giant Shell, an Iranian garment-maker and French and South Korean petrochemicals firms.
But she warned that a full revival could still be hampered by a downturn in the global economy and political instability across the Arab world.
In October, a report from a UK-based business intelligence agency said Egypt was seeing the most mergers and acquisitions of any Middle East or North African country in 2012.
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