World Economy

Egypt's Foreign Investment Doubles

Egypt's Foreign Investment Doubles Egypt's Foreign Investment Doubles

Foreign direct investment into Egypt doubled to over $6 billion in the financial year that ended on June 30, Hassan Fahmy, head of Egypt's investment authority, told Reuters.

Egypt's economy has been battered by more than three years of political turmoil since the 2011 uprising that toppled Hosni Mubarak. The government is walking a tightrope in trying to increase revenues and cut its deficit while luring investors and tourists spooked by the uncertainty buffeting the whole region.

After nine months of the 2013/14 fiscal year, FDI had stood at $4.4 billion. In the year ended June 2013, it totaled $3 billion – almost $1 billion less than in the previous year.

Egypt is aiming for foreign direct investment of $10 billion in 2014/15, as it seeks to attract investors by cutting bureaucracy and facilitating business.

Another report says, there are two main ways a foreigner can invest in Egypt: portfolio investment (including stocks and bonds) and foreign direct investment (or FDI, which is bricks-and-mortar stuff like factories and buildings).  

Whereas portfolio investments can be quickly sold and the money repatriated, FDI is immobile.  No surprise, then, that the government loves FDI but is generally ambivalent about portfolio investment, welcoming it when it flows in and cursing it when it flows out. 

In fact, both types of investment are highly beneficial for the economy.