Since the three-year USD 12 bn loan program agreed between the Egyptian government and the IMF in late 2016, Egypt embarked on a difficult, yet, essential reform program. This has been an important advance in the light of the country’s bid to make itself more attractive to foreign investors. In this regard, Invest-Gate meets Peter Hofmann, Counselor Head of Economic Department at Embassy of the Federal Republic of Germany in Cairo to share his opinion on the current business climate.
How do you evaluate the current business environment in Egypt?
The investment climate is getting better and reforms are taking effect. We have all seen what happened at The Big 5 Construct Egypt 2018 event; for the first time Germany participated in this international building and construction to showcase their products.
Can you give me figures on the value of recent Germany investments in Egypt?
It is very difficult to tell, yet many German companies come to us and ask for information about how to invest in Egypt and procedures should be taken, and I can see that their numbers are increasing day after day.
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What is the most effective reform Egypt has taken and directly affected the business environment?
Floating the Egyptian currency was one of the most effective reforms, sparking a series of good results as the International Monetary Fund (IMF) shortly called for an early meeting to review the package being considered and approved its biggest ever Middle East loan amounting to a total of USD12 bn for Egypt.
Generally, all reforms being taken are important, interrelated and come in one package; one reform can’t be effective without the other reform.
How do you see the Egyptian real estate market?
I don’t have much insight on the real estate sector since it’s mainly an Egyptian business, but I see that some experts are warning of a bubble so the country should take necessary measures against that.
What can attract foreign companies to invest more in Egypt?
Promoting for ease of doing business is the key; Egypt and its business environment need a little more of propaganda. But before that, the government should guarantee that foreign investors get back to their homes with successful stories and experiences. Businessmen in Germany don’t have much information on what is going on in Egypt so most of them take their decisions based on the experiences of others; investors are usually careful so they will not pump money until they see successful models operating in the country.
To read the full interview, check out our pdf publication pages no. 22, 23