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Economy, politics and regulation
Global Finance: Is there a strong interest from the Egyptian private sector to participate in the Saudi transformation?
Hossam Heiba: Yes. According to Saudi authorities, Egyptian investors are now the largest investors in Saudi Arabia with around US$20 billion. We are pushing for Egyptian businesses to grow regionally and internationally. At the same time, we encourage FDI in Egypt.
Girlfriend: How is the business environment evolving in Egypt? And what would you say to investors who might have been a little scared before?
Heiba: In 2016, the Egyptian government embarked on a major economic reform program, not only changing economic policies, but also changing the investment philosophy. From a monetary perspective, Egypt traditionally focused on fixing the foreign currency and protecting the Egyptian pound. Since March 2024 we have been focusing on the inflationary effect, the price of currencies is set based on market dynamics and so far this has proven to be very effective. Foreign currencies are available in the banking sector, there is a unified price for the Egyptian pound and investments and business activities are going very well.
Our second challenge was tax policy – tax system and personalized matrix. The objective is to have a clear, transparent and simple tax system, while guaranteeing the circulation of goods and services to import and export. We streamline, digitize and reduce all unnecessary documentation. To improve the business environment, at GAFI we are working to digitize all our processes and we aim to reduce permit and license approval processes. Permissions granted to foreigners should not exceed 10 working days, incorporation of businesses 48 hours, licenses and allocation of land should not exceed 20 working days.
Girlfriend : There is a lot of talk about privatization in Egypt and IPOs. What can we expect?
Heiba: The main objective, or philosophy, is to involve the private sector in activities such as logistics, tourism, petrochemical and telecommunications companies. For example, we increased Egypt Telecom’s free float stake by another 10%. We have also partnered with the private sector to upgrade six of our historic hotels and there are a number of projects underway with different companies. There will be more PPPs around projects such as water treatment, water desalination, waste management and renewable energy. Once the company is ready to be sold partially or totally to the investor, we don’t hesitate, we really get started. Currently, we are working on several companies, notably banking, which will be sold to strategic partners or listed on the stock exchange through IPOs. The aim is to improve and develop our stock market as well as enable the private sector to participate in the Egyptian banking sector.
Girlfriend : What types of partnerships are you looking for in the banking sector?
Heiba: We are currently selling a minority stake in Alex Bank to an Italian bank and preparing the platform for the sale of United Bank in an IPO. For Banque du Caire, we have several strategic partnership offers.
Girlfriend : Are you trying to bring a specific type of expertise through foreign investment?
Heiba: I think foreign expertise is certainly welcome to modernize and strengthen our banking system, but it also works the other way. I mean, international banks are eager to enter the Egyptian market, to use our existing expertise in the Middle East, the Gulf and Africa.