Egypt has approved investment incentives that will simplify procedures for new industrial projects and make it easier to set up franchises, the head of the General Authority for Investment (GAFI) was quoted as saying on Monday.
Continued political turmoil have dampened Egypt's economic prospects and the country's appeal as an investment destination, prompting the interim government to act to try and attract foreign investment.
Projects would no longer need the initial approval of the Industrial Development Authority and foreign firms establishing franchises can register in three days, instead of the previous four to six months, the al-Mal daily newspaper quoted Osama Saleh as saying.
Export and import licences would also be valid for three to five years, instead of the previous six months to a year, Saleh said.
"This affirms the GoE's support of a free-enterprise economy and private sector development," says Mona Mansour, an analyst at CI Capital Holdings. "Previously, the Minister of Industry and Foreign Trade, Samir El-Sayyad, announced the cancellation of licensing fees for industrial projects in an effort to support investment." She notes the number of newly established companies in Egypt started to pick up in March, reaching 462 up from 261 a month earlier.
Egypt's Finance Minister Samir Radwan forecasts foreign direct investment to Egypt will fall to US$4.1 billion in the 2010/11 financial year ending on 30 June, from $6.8 billion in the previous financial year, the paper said.
Radwan also said private investment would contribute 15 per cent of gross domestic product (GDP) in 2010/11, growing to 25 per cent in 2011/12.
Radwan has said Egyptian GDP would grow by only 2.5 to 3 per cent in the 2010/1. Before political unrest broke out in January, the government had been predicting growth of around 6 per cent.