CAIRO - 7 August 2022: Net foreign direct investment (FDI) in Egypt increased during the first nine months of the last fiscal year 2021/2022 by 53 percent, on an annual basis.
The Central Bank of Egypt (CBE) said in a report on the performance of the Egyptian balance of payments, that the net foreign direct investment in Egypt recorded about $7.3 billion during the period from July 2021 until the end of March 2022, compared to $4.78 billion in the same period of the previous fiscal year.
According to the data, net foreign direct investment in the non-oil sectors increased by about $3.9 billion, to record an inflow of about $9 billion, including $4.6 billion during the period from January to the end of March 2022.
This came as a result of the increase in net inflows from abroad for the purpose of establishing new companies or increasing capital by about $1.5 billion, to record about $2.6 billion, of which $208.2 million were incoming amounts to establish new companies.
Moreover, the proceeds of selling companies and production assets to non-residents increased by about $2.2 billion, to record about $2.3 billion, in addition to the net transfers received to purchase real estate in Egypt with non-resident knowledge which increased by $189.8 million to record $643.5 million.
In addition, the stability of the net retained earnings and surplus credit balances at about $3.5 billion.
On the other hand, direct foreign investments in the Egyptian petroleum sector recorded a net outflow of $1.7 billion during the nine months, compared to about $322.5 million net outflow during the same period of the previous fiscal year.
This came as a result of the increase of the remittances of Egyptian expatriates, which represent the recovery of costs borne by foreign partners during previous periods in research, development and operation, to $5.4 billion during the period from July 2021 until the end of March 2022, compared to $4.6 billion during the same period of the previous fiscal year.
Another reason is the decrease in the total inflow, which represents new investments by foreign oil companies, to be limited to $3.8 billion, compared to $4.3 billion during the same period of the previous fiscal year.
The Central Bank of Egypt (CBE) announced earlier that net foreign direct investment (FDI) in Egypt grew by 183 percent in the first quarter (Q1) of 2022, to reach $4.1 billion, compared to $1.4 billion in the same period of 2021.
Thus, net foreign direct investment in Egypt recorded the highest value since the first quarter of 2018, which amounted to $6.9 billion at the time.
In the first nine months of the last fiscal year 2021/2022, net foreign direct investment to Egypt increased by 53 percent, to record $7.3 billion, compared to $4.8 billion in the same period of the previous fiscal year 2021/2020.
According to the data of the CBE, the total cumulative investments amounted to $141.61 billion until the end of last March, compared to $134.3 billion in June 2021.
Egypt is seeking to attract more local and foreign investments, and to support the role of the private sector as a partner in various development processes.
In June, Minister of Finance Mohamed Maait stated that the Egyptian government aims to attract $10 billion in foreign direct investment (FDI) annually.
Maait elaborated that this comes in a manner that ensures raising economic growth rates, creating more job opportunities, and enhancing aspects of spending on improving the standard of living of citizens and upgrading the services provided to them.
Moreover, the UN Conference on Trade and Development (UNCTAD) stated in a report that Egypt ranks second in Africa in inflows of foreign direct investment in 2021/2022.
Gulf investment inflows are expected to reach $22 billion. The move will help recover FDI rates in Egypt, according to the report.
Last April, Prime Minister Mostafa Madbouli confirmed that the government plans to expand the establishment of free zones, which contributes to serious investors pumping more of their investments, whether by establishing new factories, or expanding existing ones, whether these investments are local or foreign.
During the last period, Egypt attracted Gulf investments that contributed to enhancing dollar liquidity in the largest Arab country in terms of population, amid the repercussions of the Russian-Ukrainian crisis, and raising the US interest rate.
Recent Gulf support included a $5 billion Saudi deposit with the Central Bank and Emirati and Qatari investments in local companies, totaling $20 billion.
Egypt has remained as a top recipient of FDI in Africa for the fifth year in a row in 2020/2021, reaching $5.9 billion, which represents 53 percent of foreign direct investment directed to North Africa.
Earlier, the Cabinet's Information and Decision Support Center (IDSC) released an infographic showcasing that Egypt ranked third among Arab countries in foreign direct investment inflows in 2021 with $5.4 billion.
As such, Egypt acquired 16.4 percent of new FDI in the region embodied in 58 projects carried out by a total of 50 companies and that created 9,000 jobs. Those were mostly in the sectors of business services, programming, information technology, and financial services.
IDSC announced last week that Egypt ranked second in Africa in terms of attracting FDI in FY 2021/2022, as it surged by 183 percent in the first quarter of 2022, to record $4.1 billion, compared to $1.4 billion in the same period of 2021.