The broad view on Egypt from the outside is one of cautious optimism. Structural reforms are in motion, FX restrictions are easing, and monetary tools have realigned to tackle inflation head-on, but international investors remain cautious about deploying capital here. What will it take to reignite investor confidence? As the government pushes forward with projects like Ras El Hekma and attempts to attract capital from key partners like Saudi Arabia and the UAE, the real question remains: Can Egypt execute where it counts and turn optimism into action?

We brought together a panel of international advisors and investors who are committing capital to Egypt or advising those who are looking to do business here during this year’s Enterprise Finance Forum. We spoke to Amr El Bahey, CEO of Mashreq Egypt, Essam Al Tamimi, founder and chairman of Al Tamimi & Company, Leila Serhan, senior vice president and group country manager for NALP at Visa, and Sherif El Kholy, partner and head of Middle East and Africa at Actis.

You can’t talk investments without bringing up Ras El Hekma: The landmark USD 35 bnagreement with ADQ that gave the Abu Dhabi wealth fund and longtime investor in Egypt the development rights to Ras El Hekma on the North Coast set the stage for the float of the EGP and opened the door for a whole lotta investments.

So where does the project to develop Ras El Hekma stand? “Ras El Hekma is a huge project for UAE. There are two ministers leading the project from the Emirati side and it’s progressing slowly, but it’s going to happen,” Al Tamimi said. We could be looking at six months to a year until we see significant progress on the project, but the project is moving forward despite facing challenges due to its complexity, Al Tamimi added. Al Tamimi explained that the key challenge lies in ensuring that the UAE has the freedom to fully operate and regulate the area.

Regulatory clarity is key: One area of concern raised by Al Tamimi is the lack of regulatory clarity. The current Investment Law leaves too much subject to the assessment of ministers and the cabinet, as opposed to clear and simple guidelines set in stone. “Investors want a clear, simple, and transparent process,” he said, adding that “there’s a few fixes you can do on isolated issues, but there aren’t regulations or laws that could basically clear things up and have investors enter the markets more smoothly and comfortably.” Al Tamimi explained that “there is serious intent to solve problems, but Egypt often gets tangled in the same issues over and over again.”

All about execution: “It’s all going to be about whether you can convert potential into tangible actionable opportunities that generate globally competitive, risk-adjusted returns,” El Kholy said, adding that “while there’s a macroeconomic stabilization afoot and a structural adjustment program is progressing,” much of Egypt’s investment potential will depend on execution. This is what will really inspire confidence, not just signing more MoUs, he said. “It’s all about execution, execution, execution,” El Bahey agreed.

The time is now: This combination of easing global macroeconomic pressures and domestic reforms creates a “runway for takeoff,” that could see Egypt lock in more investment, El Bahey said. “I think everyone realizes this is the perfect time for unleashing the potential of Egypt… People are cautiously optimistic and want to be even more optimistic.”

So, what are the signs of optimism? El Bahey pointed to growing production lines, increased capex investments, and increased interest from partners like the UAE and Saudi Arabia as indicators. “Another positive development is the focus on targeting inflation instead of just fixing the exchange rate,” he said, pointing to the easing of FX restrictions and the clearance of backlogs, which have all boosted confidence. Meanwhile, Serhan pointed to Egypt’s talent pool as a major reason for optimism.

Egypt is a long-term investment destination: While the general consensus of the panel leaned toward cautious optimism, Serhan said her view was “realistically optimistic.” “When you come to Egypt, you know you’re playing the long game — it’s not about the next quarter, it’s about the long term,” she said.

Why FDI flows have been slower than anticipated: Investors are adopting a “wait-and-see” approach, El Kholy said, adding that this explains why the expected surge in FDI after the float has yet to materialize. “Long-term investors with a five to ten-year horizon want to see policy clarity before making any decisions,” he explained. “We need to see real momentum on the privatization program and a more pro-private sector investment climate.”

There are signs of increasing appetite from industrial investors: “Long-term-minded investors are starting to prick up their ears and take a fresh look at opportunities here,” El Kholy noted, pointing to a recent visit by a large delegation from China. While this is promising, the panel agreed that large-scale investments will only follow when policy reforms are fully implemented.

Investors are waiting to see the next move: Investors are watching closely to see how Egypt handles its internal adjustments amid global shifts, like the start of the Fed’s rate-cutting cycle. The general sentiment is that if Egypt can improve its execution, it will be well-positioned to reap the benefits of a more favorable global environment.

The baseline scenario: The panel’s baseline scenario for Egypt focuses on maintaining stability through the ongoing structural adjustment program and progress on debt sustainability, which would gradually restore investor confidence. El Kholy noted that global conditions should offer emerging markets including Egypt some relief. El Bahey added that the country is already halfway there, with the government recognizing its challenges. Meanwhile, Serhan emphasized the importance of avoiding boom-bust cycles to maintain stability in the long term.

Looking ahead, we need to tap into Gen Z and look beyond the traditional sectors: Serhan highlighted the immense potential of Egypt’s Gen Z population and an expected growing middle class in driving long-term economic growth. Gen Z’s purchasing power is expected to double in the next five years, making them a key demographic for businesses to target. Serhan also emphasized the potential in Egypt’s creative industries, like film, music, and fashion, which can gain momentum without necessarily requiring FDI.

What are our panelists doing next? Mashreq is “very bullish on Egypt,” according to El Bahey. The bank is expanding across all segments with a focus on growing its retail business. Actis is cautiously participating in the privatization program, while Visa is increasing its workforce and investing in the country’s fintech and startup ecosystem.

Tags: