In a critical time for Egypt’s economy, which has been squeezed by turbulence and uncertainty since 2011, coupled with numerous challenges, such as the prolonged political transition that led to the build-up of macroeconomic imbalances.
The authorities decided to adopt an ambitious economic reform programme in an effort to tackle such problems within the Egyptian economy, address macroeconomic vulnerabilities, and promote inclusive growth and job creation. The programme, which was supported and demanded by the International Monetary Fund (IMF), included the introduction of the value-added tax (VAT) law, the reduction of fuel subsidies, cutting the huge public wages bill, and the liberalisation of the foreign exchange market, which took place in November 2016.
In reply to a question by Daily News Egypt about Egypt’s economic reform programme, and the CBE’s decision to free float the currency, business tycoon and chairperson of Orascom Telecom Media and Technology Holding, Naguib Sawiris, expressed that he believes that it was the right decision, albeit belated. If it was taken earlier, the US dollar exchange rate against the Egyptian pound would have been much lower, yet it is a step in the right direction, according to him. He added that if it was coupled with the right regulations to promote investments and exports, the Egyptian economy will benefit from it.
Sawiris stated that in order to support the private sector, the government should establish a committee to abolish bureaucracy: “we need new legislations and laws to replace the outdated ones from the 1960s. The most important thing is that they need to make a law to protect the trustworthy public workers, so that they take the right decisions when needed, as well as speed the investment process.”
Resolving investors’ problems encourages them to invest more in the various sectors, and this will positively increase the economy’s growth rates and will help foster thousands of employment opportunities for young people, according to the chairperson.
Moreover, with regards to Orascom’s expansion plans, Sawiris told DNE that Orascom is currently more of an investment company than an operating company. “We currently invest in mining, financial services, real estate, and media. In order to have a diversified portfolio, we work globally, but we prefer Egypt and Africa. We have acquired a gold mine in Burkina Faso with $300m in investments, and it is expected to be operational in December. In addition to mining, we have acquired the majority stake in Riverbank, which specialises in financing small and medium enterprises (SMEs), predominantly in Benelux (Belgium, the Netherlands, and Luxembourg) and Germany.”