16 OCTOBER 2017

Egypt: The Revival of an Economy...Stability, Reform and Growth

The American Chamber of Commerce in Egypt (AmCham Egypt) in coordination with the U.S. Chamber of Commerce, U.S.-Egypt Business Council, the Egypt-U.S. Business Council and EFG Hermes, hosted a Special Lunch on Monday, October 16th in New York City, in honor of Egypt’s Ministers of Investment and International Cooperation, Sahar Nasr and Minister of Finance, Amr El Garhy. The event was organized in partnership with Citi Group and Bank of New York Mellon and was sponsored by Apache Corporation and PepsiCo.

The event, which was attended by more than 200 investors, financial sector leaders, senior representatives of U.S. companies, members of the Egypt mission to the U.S., among others, took place on the sidelines of the Annual Meetings of the International Monetary Fund (IMF) and the World Bank, and at a time in which Egypt’s economy has shown signs of progress and investor sentiment has improved on the back of strengthened reform momentum.

During their Keynote addresses, both ministers outlined some of the recent bold reform measures undertaken by the government during the last few months as well as the key features of Egypt’s economic reform program. Just less than one year ago, on November 3, 2016, Egypt allowed its currency to float freely for the first time in its history. The move essentially rebooted the economy, increased Egypt’s competitiveness as a manufacturing hub for U.S. and other companies. In doing so, it renewed investor confidence in the economy. Egypt also passed several laws to stimulate the economy, reduce red tape and promote investment, with additional legislation now in the pipeline. The enacting of a new investment law, facilitating entry to the market and protecting the rights of investors, is another positive milestone. The impact of these reforms was widely felt by all sectors of the economy; exports have grown by almost 20% in 2017 and additional private investment has been pledged in the oil and gas sectors amounting to more than $20 billion in the next five years. The government’s ambitious IMF-supported reform agenda is said to further improve the business environment and increase Egypt’s attractiveness to foreign investors.

During her keynote speech, Minister Nasr briefed the audience on the key features of the newly enacted investment law, incentives to new investors, the simplification of legal procedures for starting a business, as well as the opportunities available within the newly established economic zones around the Suez Canal area. Minister Nasr also outlined Egypt’s core competencies as an investment destination, namely its strategic location, its proximity to markets of Africa, Asia and Europe, its existing trade agreements as well as its young trainable population.

Minister El Garhy walked the audience through Egypt’s fiscal and monetary reforms, stressing that these reforms were starting to bear fruit. Following the cutting of subsidies, floating the pound and moving towards deregulating sectors of the economy, Egypt has managed to achieve solid economic growth of 4.1% for the 2016-2017 financial year and forecasts for an estimate rise to 4.6% in the coming year. Minister El Garhy stressed the need to continue to improve the business climate.

Each of the Keynotes was followed by a panel discussion. The first panel featured Minister Nasr, President, Middle East and Africa, PepsiCo, Omar Farid, and was moderated by Senior Region Vice President-Egypt, Mid-Continent, Gulf Coast, Gulf of Mexico, Apache Corporation, James House. Panelists shared their outlook on Egypt, highlighting the potential of its market and their plans of expansions. Apache, the biggest U.S. investor in the country and the largest producer of oil per day, reiterated its commitment to Egypt, which PepsiCo stated its support to 53,000 jobs both directly and indirectly.

On the other hand, the second panel featured Minister El Garhy, Vice Chairman, Corporate and Investment Banking, Citi, Jay Collins, and CEO EMEA Investment Services, BNY Mellon, Hani Kablawi. The session was chaired and moderated by Group CEO of EFG Hermes, Karim Awad. Panelists commended Egypt on its bold reforms that have positively increased investor confidence and triggered a favorable demand for its monetary tools over the past few months. Both Citi and BNY Mellon expressed their optimism with regards to Egypt’s future.

Each panel was followed by a ‘Question and Answer’ session during which the audience engaged with the panelists in an interactive discussion.