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Thursday, 26 November 2020

Opportunities in Egypt: Securing US investments

Egypt has plenty to offer investors, especially as it moves forward with more economic reforms, the president of AmCham Egypt recently told the press

Niveen Wahish , Thursday 19 Nov 2020
Securing  US investments
AmCham’s next Doorknock mission will take place virtually
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Regardless of who is in the White House in Washington, the American Chamber of Commerce (AmCham) Egypt continuously communicates with both Democrats and Republicans in the US to promote Egypt-US trade and investment relations, Sherif Kamel, president of AmCham Egypt, recently told a virtual press roundtable.

According to Kamel, Egypt is an attractive environment for investors of all nationalities, including US investors. “Egypt is a huge and growing market,” he said, adding that more than 1,300 US companies of all sizes were currently operating in Egypt in various sectors. The size of the trade exchange between the two countries last year was $8.6 billion, the largest in Africa, he added.

Such opportunities can be further enhanced as the country continues its economic-reform programme, Kamel said. “Through Egypt’s reform programme, we have a higher chance of increasing trade exchange with the US, and I hope there will be greater direct investments, especially in non-oil sectors,” he added.

Praising Egypt’s economic reform efforts, Kamel said the effects of the Covid-19 pandemic on the Egyptian economy would have been harsher had the economy’s indicators been those of 2013-15. Less than a year ago, Egypt’s GDP growth rate was 5.8 per cent, and this, together with lower inflation and unemployment rates, had helped to ease the effect of the coronavirus.

Inflation came in at 4.5 per cent in October, and unemployment rates were just over seven per cent in the third quarter of 2020.

While initial forecasts had expected Egypt’s GDP growth rate to drop to two per cent, it had come in at around 3.6 per cent, Kamel said, adding that “our economy was the only one in the region which saw positive growth.”

Building on these numbers, Kamel stressed the need to proceed with what he called “reform 2.0” — the second phase of the government’s economic reform programme that would create more jobs, encourage the private sector, and promote digitisation, with the latter in particular making a huge difference to economic prospects, Kamel said.

While for decades there have been fears that the new technologies could affect job opportunities, the Covid-19 pandemic had demonstrated that this was not true and that technology needed people to work it, he said.

The nature of many jobs had changed, and accordingly the types of qualifications needed were different, he explained. “We need reskilling. We will not replace people with machines or technology, but we need our youth to be prepared and trained to deal with the new technology,” he added.

Kamel said that when the coronavirus crisis was over, everything “will not be back to normal” in terms of a new reliance on technology for work, education, entertainment and shopping.

“We will neither go back, nor continue like this, but we will go on to something intermediary because technology has become essential to all our lives,” he said, adding that it was essential to achieve financial inclusion and it could help to integrate the informal economy, which is huge in Egypt.

Another lesson to be learned from the Covid-19 pandemic was that the concept of globalisation would need to be revisited, Kamel said, explaining that instead of China being the workshop of the world, with many countries relying on it for sourcing products and materials, there would also be other sources.

“That will give opportunities to many other countries, including Egypt,” he said. However, he also stressed that investors would not come to the country unless it distinguished itself by facilitating investment and the ease of doing business.

The coming into effect of the African Continental Free Trade Area (AfCTA) would also mean opportunities for Egypt, Kamel said, with the African market representing more than one billion people.

Kamel also pointed to the US interest in the continent through the Prosper Africa initiative. Launched in December 2018, this US government initiative targets to increase two-way trade and investment between the US and Africa. Egypt could help in that regard through its multiple agreements within the African continent, he said.

Throughout the Covid-19 pandemic, AmCham Egypt had been continuing to play its role of promoting trade and investment between Egypt and the US, Kamel said. Although this year it had not been possible to carry out the annual “doorknock” mission to Washington, this would nevertheless be happening virtually, he added.

 “They need to know our success stories,” Kamel stressed, adding that a US delegation that had been scheduled to come to Egypt later this month would now be meeting online in mid-December.

One of the topics central to such a meeting is the launch of a free-trade area (FTA) between the two countries. This request had not been turned down, Kamel said, but there were certain steps that both sides needed to take to make into a reality.

Egyptian businessmen had been surprised when the US launched free-trade talks with Kenya in July 2020, Kamel said, adding that he could not explain why negotiations with Kenya had taken off at a time when Egypt had been asking for years for a FTA.

“There must be other calculations in the formula, possibly related to the Prosper Africa project,” he said, adding that the US was focusing on Africa because of the increasing presence of China on the continent.

There would come a time when Egypt would have a FTA with the US too, he concluded.

*A version of this article appears in print in the 19 November, 2020 edition of Al-Ahram Weekly

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