Egypt finds red tape puts off investors

Since June 2017, authorities have cut the maximum time it takes to approve a permit

Egypt’s efforts to attract new businesses, following sweeping reforms, appear to be paying off, with a 20-fold surge in the number of new industrial licences issued since laws were changed a year ago, according to a top official.

Since June 2017, authorities have cut the maximum time it takes to approve a permit to 30 days compared to an earlier average of nearly two years, said Ahmad Abdul-Razek, chairman of the Industrial Development Authority. The authority has issued 8,400 licences versus 340 the year before. To attract more interest, the authority also plans to offer about 30 million square metres of land for industrial purposes through 2020, compared to 9.5 million square metres from 2007 to 2016.

“A lot of existing investors are expanding, and many foreign investors started to enter the Egyptian market after they found a good investing environment,” Abdel-Razek said in an interview at his office in Cairo. “Half of the requests for land on my waiting lists are by foreign investors.”

The surge in new licences being issued comes as Egypt pushes ahead with a sweeping programme to overhaul

International Monetary Fund loan to Egypt

the economy. A 2016 decision to lift currency restrictions and cut fuel subsidies was heralded by the International Monetary Fund, which finalised a $12 billion (Dh44 billion) loan that paved the way for an influx of foreign money.

In tandem with that move, the government worked to cut bureaucratic red tape that had left investors grumbling.

While the reforms have begun to boost growth, and a spike in inflation that followed the currency float has since eased sharply, officials are seeking to bring in more foreign investments, with much of the money so far being funnelled into the local debt and stocks markets. Net foreign direct investment dropped to $3.8 billion from July to December 2017, from $4.3 billion a year earlier.