Cairo – September 17, 2024: Saudi Arabia’s Public Investment Fund (PIF) has committed to a new $5 billion investment in Egypt as part of an initial phase in a larger investment program, according to a cabinet statement.
The announcement was made during a meeting between Saudi Crown Prince Mohammed bin Salman and Egyptian Prime Minister Mostafa Madbouly.
Although specific details about the investment areas and deployment timeline remain undisclosed, this move represents a significant advancement in bolstering economic cooperation between the two countries.
This new initiative follows a prior declaration by Saudi Investment Minister Khalid Al Falih in August, who revealed plans to convert a $10 billion deposit with the Central Bank of Egypt (CBE) into investment opportunities.
As of March 2024, Saudi Arabia's long-term deposits with the CBE stand at $5.3 billion out of a total of $15 billion.
The PIF has a major investment portfolio in Egypt, including its subsidiary, the Saudi Egyptian Investment Company (SEIC), investing $1.3 billion to acquire minority stakes in several Egyptian state-owned companies last year, including E-Finance. Recent activities also include negotiations to acquire stakes in local agriculture firms.
During the meeting, Madbouly praised the deepening relationship between Cairo and Riyadh, stating, “We are currently working on finalizing the agreement on the protection of joint investments, which will contribute to increasing investments between the two countries.”
He also highlighted Egypt's readiness for new business, noting that “the majority of the approximately 90 problems identified by Saudi investors have already been sorted out”. Madbouly added that the remaining 14 issues are expected to be resolved by the end of the year.
Prime Minister Madbouly also spoke about potential cooperation in the automotive sector and leveraging the African Continental Free Trade Area to enhance market access for both Egyptian and Saudi products.
He remarked, “Egyptian products have already established a successful presence in African markets. We believe that through collaboration and understanding between Egypt and Saudi Arabia, and with the support of the Egyptian-Saudi Business Council, a strategic objective can be achieved: establishing a significant presence in the African market within the next three years.”
The Egyptian government is actively pursuing increased foreign direct investment (FDI) to support its economic reforms.
Egypt aims to triple its FDI inflows from a record $10 billion in the FY2022/2023 period to $30 billion in the current financial year.
The country’s ambitious goal comes amid fiscal challenges, including a budget deficit of EGP 505 billion ($10.5 billion) for FY2023/2024, despite a primary surplus of EGP 857 billion.
Finance Minister Ahmed Kouchouk previously emphasized the need to maintain this surplus to reduce the debt-to-GDP ratio from over 90 percent to below 80 percent by 2027.
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