Egypt ranks 112th in World Bank's annual Doing Business report

Deya Abaza, Wednesday 29 Oct 2014

Egypt climbs one spot in World Bank Doing Business rankings for 2015 after financial regulatory reform boosts protection of minority investors

Egyptian shoppers roam a commercial mall in Cairo, Egypt (Photo: AP)

Egypt climbed one spot to rank 112th out of 189 countries in the World Bank's Doing Business 2015 report, after passing new regulations seen as providing better protection for minority investors.

Egypt jumped 18 places in the category for "protecting minority investors" to now sit at 135th, the World Bank said on Wednesday.

Egypt's financial regulator issued new listing rules passed in February requiring companies to disclose more information to minority shareholders and giving them more weight in approving transactions with related companies, Sherif Samy, head of the Egyptian Financial Supervisory Agency (EFSA), told Ahram Online.

According to Samy, any transaction between a corporation and another firm with which it has a special relationship (e.g. same majority shareholders) must be put to a general assembly vote which excludes majority shareholders of the related party from the vote.

The country also gained two spots for ease of trading across borders, to rank 99th in this year's report.

However, the country dropped six spots in the ranking for "starting a business" to rank 73rd, and eight spots in "paying taxes" to rank 149th.

Egypt's government introduced a spate of income and sales tax hikes earlier this year, prompting criticism from business owners, in an effort to reign in the country's budget deficit to 10 percent after President Abdel-Fattah El-Sisi vetoed a budget allowing for a higher deficit.

Egypt's place in the ease of getting electricity for a business ranking dropped four notches to 106th worldwide, as the report estimates that it takes 54 days to complete required procedure, at a cost approaching LE64,000.

Egypt has been suffering from increasing energy shortages since its January 2011 uprising as production of natural gas, mostly used for power generation, has failed to keep up with rising domestic consumption, forcing the government to cut down fuel subsidies and raise electricity prices in recent months.

Egypt saw its lowest ranking in "enforcing contracts," remaining in 152nd place, reflecting a lack of improvement in the efficiency of its judicial system.

Getting credit is also an issue, with Egypt dropping four spots to rank 71st, said the report, which estimates that only 5.8 percent of Egypt's adult population are covered by a public credit registry and 21.8 percent are covered by a private credit bureau.

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