Egypt
Egypt is implementing ambitious reforms to stabilise its economy, attract investors, and spur durable economic growth. These efforts are having a positive effect. Since 2013, GDP growth has doubled, reaching 5.5% in 2019, the highest level in almost a decade. Foreign investment inflows have been steadily increasing since 2011, and despite more modest inflows over the past two years, in 2018 Egypt was the largest recipient of FDI in Africa and the second highest in the MENA region. Both the budget and current account deficit have narrowed in the past couple of years, and unemployment is decreasing. These positive gains will be tested in the near- to medium-term. Initial projections on the economic effects of the coronavirus pandemic portend declines in FDI in all economies for the coming year at least, along with disruptions to global value chains. A global recession appears likely. The steps the Egyptian government has taken to address its economic challenges, in recent years and in response to the pandemic, may help it weather some of the negative impacts of the current crisis. The new outlook makes continuing to advance Egypt’s reform agenda all the more imperative.
This chapter examines zone-based policies in Egypt. It provides an analysis of zones’ competitiveness and sustainability as well as of their strategic objectives, their distinct regulatory frameworks, and current policies to attract investment, boost export and foster linkages with the local economy. The chapter also presents evidence on zones’ contribution to foreign investment, export, and job creation. It offers some policy options to better align the development objectives of zones in Egypt with the government sustainable development priorities.
This chapter provides an overview of Egypt’s tax system, including recent reforms, and an assessment of the country’s investment incentives regime. It provides an overview of existing incentives, their implications for the tax administration and proposes options to ensure that tax incentives achieve the government’s policy goals in a cost-effective manner. The chapter also looks at tax governance and transparency issues.
This chapter analyses the investment promotion and facilitation policies in place in Egypt, examines the institutional framework for investment promotion and facilitation, with a particular focus on the role and activities of GAFI, highlights key reforms and measures implemented by the government to attract foreign investment and improve the business environment and also identifies remaining challenges and proposes recommendations to address them.
Egypt is implementing ambitious reforms to stabilise its economy, attract investors, and spur durable economic growth. These efforts are having a positive effect. Since 2013, GDP growth has doubled, reaching 5.5% in 2019, its highest level in almost a decade, according to the Central bank of Egypt (CBE). Foreign investment inflows have been steadily increasing since 2011, and despite more modest inflows over the past two years, in 2018 Egypt was the largest recipient of FDI in Africa and the second highest in the MENA region. Both the budget and current account deficit have narrowed, and unemployment is decreasing, from 13% to 7.5% by the second quarter of 2019. These positive gains will be tested in the near- to medium-term. Initial projections on the economic effects of the coronavirus pandemic portend declines in FDI in all economies for the coming year at least, along with disruptions to global value chains. A global recession appears likely. The steps the Egyptian government has taken to address its economic challenges, in recent years and in response to the pandemic, may help it weather some of the negative impacts of the current crisis. The new outlook makes continuing to advance Egypt’s reform agenda all the more imperative.
This chapter examines the current context of infrastructure development in Egypt. It reviews connectivity challenges and recent reforms to boost infrastructure investment, including private participation in infrastructure through public-private partnerships. It also proposes recommendations to overcome the remaining obstacles to improving the enabling environment for private investment in infrastructure.
This chapter reviews trends in foreign investment in Egypt and their development benefits using various national and international data sources. It looks at the performance of foreign investment relative to neighbouring and emerging economies as well as foreign investment distribution across economic activities and Egyptian governorates. The chapter also examines foreign investment development outcomes, including on productivity, labour market outcomes, export, and supply chain linkages with the local economy.
This chapter provides an overview of the responsible business conduct (RBC) landscape in Egypt, outlining steps taken by the government to promote and enable responsible business practices. It provides concrete examples of actions the government could take to facilitate implementation of RBC standards and foster trade and investment in key economic sectors. It proposes policy recommendations to further enhance the climate for RBC, with a view to improving economic and sustainability outcomes and supporting Egypt’s development objectives.
This chapter provides an overview of the regulations on investors’ entry and operation in Egypt. It argues that, despite remarkable liberalisation reforms, structural transformation in Egypt has occurred at a slow pace. The creation of a more competition-friendly environment would allow for a better allocation of resources towards higher-productivity firms and would enable new entrants and incumbents to bring in new ideas and innovate. The chapter then examines the restrictions on cross-border investment and finds that restrictions on the entry and operation of foreign-controlled firms, while not particularly extensive in Egypt, place an additional toll on the development of a thriving business sector. Not only might they discourage foreign investment inflows in the first place, they may also hold back potential economy-wide productivity gains associated with FDI.
This second OECD Investment Policy Review of Egypt uses the OECD Policy Framework for Investment to present an assessment of the investment climate in Egypt and to discuss the challenges and opportunities the Egyptian government faces in its reform efforts. It examines a broader range of policy areas in more depth than the first review. Chapters cover foreign investment trends and development benefits, the entry and operations of foreign investors, the legal framework for investment, investment promotion and facilitation, zone-based policies, tax policy and incentives, policies to promote and enable responsible business conduct, and infrastructure connectivity.
This chapter provides an overview of Egypt’s legal framework for the protection of investment. It takes stock of the investment policies in force and examines the level of regulatory protection granted to both domestic and foreign investors since the enactment of the 2017 Investment Law, which constitutes a milestone in Egypt’s recent efforts to reposition itself as an attractive and safe investment destination. The chapter looks into the rules for property protection, access to land and investor-state dispute settlement, and reviews its international investment treaty practice. It also explores Egypt’s efforts to establish a corporate governance framework for state-owned enterprises, which play a major role in the country’s economic landscape.
In 2018, total revenue from tourism reached EGP 174.1 billion, a 124% increase on the previous year, representing 15% of the country’s GDP. The tourism sector is one of the largest employers in Egypt, providing 3.1 million jobs or 9.5% of the total workforce.
This peer review covers Egypt’s implementation of the BEPS Action 5 transparency framework for the year 2018. The report has four parts, each relating to a key part of the ToR. Each part is discussed in turn. A summary of recommendations is included at the end of this report.
Egypt was first reviewed during the 2017/2018 peer review. This report is supplementary to Egypt’s 2017/2018 peer review report (OECD, 2018[1]). The first filing obligation for a CbC report in Egypt applies to reporting fiscal years ending on or after the 31 December 2018.
Laws and regulations have an impact on all aspects of everyday life. While good regulation contributes to well-functioning markets and societies, poor regulation may undermine them by imposing undue costs on businesses and citizens.
This chapter outlines how to best implement the Egyptian Manual for Legislative Drafting in an effective and efficient manner, based on the experiences of OECD countries. The chapter underlines that it is essential for Egypt to build their ongoing legislative reform efforts on a comprehensive and whole of a government regulatory policy strategy in order to complement the significant progress achieved with the preparation of the Legislative Drafting Manual. The chapter concludes with specific recommendations to help maximise the potential of the Egyptian Manual for Legislative Drafting as a tool for obtaining better outcomes from legislation.
This report is written for decision makers, policy makers, public officials and the international community working on better regulation and legislation. The report sheds light on the role of legislative drafting manuals in enhancing legislative and regulatory quality and promoting good governance; and provides evidence and good practices from the OECD countries in the preparation and implementation of the legislative drafting manuals. In particular, the report focuses on the first Egyptian legislative drafting manual The Egyptian Legislative Drafting Manual is accessible online on the website of the Ministry of Justice: http://www.jp.gov.eg/ar/Ministry_of_Justice_Design_of_Legislative_Guide.pdf (accessed 22 July 2019)., which is prepared by the Ministry of Justice of Egypt with the support of the OECD. This report aims to assess the legislative drafting manual of Egypt, which was launched in July 2018 by the Ministry of Justice of Egypt, in light of good practice as outlined in the 2016 Charter and 2012 Recommendation; and provide recommendations for making these legislative drafting instructions more operational and effective. The report is prepared as part of the MENA Transition Fund Project “The Rule of Law in Egypt” of the G7 Deauville Partnership, implemented in partnership with the Ministry of Justice and the African Development Bank. The report is based on the findings of peer-to-peer exchanges, capacity-building activities, technical workshops and a series of study visits to OECD countries, including Canada, France, Italy, the Netherlands and Spain which have been conducted since 2014. The OECD would like to thank the officials from the Government of Egypt and the OECD peers for their support and commitment as well as the MENA Transition Fund of the G7 Deauville Partnership for the financial support.
The 2012 OECD Recommendation of the Council on Regulatory Policy and Governance demonstrates that good regulatory management helps stimulate economic activity at both domestic and international levels. A well-functioning regulatory framework enables efficient markets and helps protect citizens against financial, economic and societal uncertainties. Law drafting techniques and procedures have a direct impact on the effectiveness of legislation and regulatory quality. Transparent and coherent legislative drafting procedures help promote public participation in the rule-making process, foster trust in the justice system, reinforce the rule of law and create an enabling business environment where citizens and businesses can identify their rights and obligations.