{"id":588886,"date":"2023-06-18T00:00:00","date_gmt":"2023-06-18T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/what-do-industry-players-think-of-the-madbouly-governments-new-package-of-business-reforms\/"},"modified":"2023-06-18T00:00:00","modified_gmt":"2023-06-18T00:00:00","slug":"what-do-industry-players-think-of-the-madbouly-governments-new-package-of-business-reforms","status":"publish","type":"inside_industry","link":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/what-do-industry-players-think-of-the-madbouly-governments-new-package-of-business-reforms\/","title":{"rendered":"What do industry players think of the Madbouly government\u2019s new package of business reforms?"},"content":{"rendered":"

<\/span> How the business community is taking the government\u2019s new investment incentives:<\/span> Last<\/span> month, the Supreme Investment Council (SIC) <\/span>enacted a package<\/a><\/span> of 22 new decisions geared towards encouraging investments and, ultimately, pushing more private sector investments. The decisions aim to address the demands and complaints of Egypt's industrial investors, and level all challenges and hindrances facing players in the industry sector, ultimately accelerating investments in Egypt's industry. Broadly speaking, the business community has reacted positively to the decisions, but sources Enterprise spoke with also stressed the importance of implementation. <\/span><\/p>\n

REFRESHER-<\/span> The decisions cover a wide range of issues that have previously been cited as<\/span> obstacles for investors, including the procedures and bureaucracy to set up a company and complete the land allocation process, as well as addressing issues with transparency, leveling the playing field between the public and private sectors, and easing the financial burden on investors. The reforms also include changes to the jurisdiction of economic and district courts to expedite dispute resolution. <\/span><\/p>\n

The incentives come as the government is pushing for more private sector activity +<\/span> investment:<\/span> The SIC\u2019s decisions are geared towards driving private sector investments to be on par with or outpace the government\u2019s investments, Prime Minister <\/span>Moustafa Madbouly said<\/a><\/span> at a presser to break down the decisions. The government is aiming to increase exports to <\/span>USD 100 bn a year<\/a><\/span> by the middle of the decade, and attract USD 40 bn in private investment by 2026 as it looks to increase the private sector\u2019s footprint to 65% of the economy by 2025. <\/span><\/p>\n

Broadly speaking, the private sector\u2019s verdict on the reforms is \u201cthumbs up\u201d:<\/span> The<\/span> decisions are likely to open the door for FDI inflows and help support Egypt\u2019s manufacturing sector, our sources agreed. \u201cThe decisions are expected to nearly double FDI inflows to USD 15 bn per year, from USD 8 bn,\u201d Egyptian Businessmen\u2019s Association member Ahmed El Zayat told Enterprise. <\/span><\/p>\n

What\u2019s going to be driving FDI?<\/span> El Zayat pointed to several decisions as being key to<\/span> attracting foreign investors, including opening up the real estate sector to foreign ownership by lifting limits on the number of properties non-residents are allowed to own, while expediting real estate registry procedures for investors. Also key, according to El Zayat, is the upcoming amendment to the law governing special economic zones to improve privileges, as well as a decision to allow natural gas-reliant industries to receive freezone benefits. <\/span><\/p>\n

Less red tape = more streamlined process = more FDI:<\/span> The new decisions cut lengthy<\/span> processes and complicated procedures hindering industrial projects, which is expected to \u201cstrongly and quickly resolve many issues and challenges weighing on the economy and deterring foreign investments,\u201d Secretary-General of the Chamber of International Transport and Logistics Amr El <\/span>Samadony<\/span> told Enterprise. <\/span><\/p>\n

The business community is happy with importers register changes \u2014 and with the<\/span> support given to export transport requirements:<\/span> As part of the new decisions, <\/span>foreign investors will be able to register on the importers (and exporters) register, allowing them to directly import without needing an Egyptian broker or to obtain citizenship. The reforms also include several incentives for <\/span>projects producing green hydrogen and its derivatives<\/a><\/span> \u2014 including customs and VAT cuss for imports required for these projects and exporting their output \u2014<\/span> which will be applied to other industry sectors within two months. This move will be critical to support exports, which \u201care the main focus at the current stage,\u201d El Samadony stressed. \u201cSupporting the transport side of the equation will help increase exports and secure FX income,\u201d El Samadony said. <\/span><\/p>\n

More industry-focused incentives: <\/span>Madbouly has also introduced several decisions aimed at<\/span> stimulating manufacturing industries, including a reduced 10% interest on land installments for two years, grants to industrial projects in new cities and all state districts, and granting customs breaks and other administrative fees to industrial zones in the fourth generation new cities and East Port Said, and projects in industries targeted in the government\u2019s localization list, Also, a two-year grace period is being discussed to establish an industrial project, during which investors will only pay the down payment for the land, provided that they start paying the installments after the stated period.<\/span><\/p>\n

All these decisions came in response to complaints and demands from manufacturers<\/span> and investors<\/span>, according to Alaa Abdel Meguid, head of the Federation of Egyptian Industries\u2019 healthcare providers division. \u201cWe have been demanding these decisions to facilitate the process for investors, accelerate setting up their projects, and seamlessly operate them, which will benefit all parties,\u201d Abdel Majid told Enterprise.<\/span><\/p>\n

Time is of the essence:<\/span> \u201cPutting these decisions into action is most crucial,\u201d head of the<\/span> Federation of Egyptian Industries\u2019 engineering division Mohamed El Mohandes told Enterprise. These decisions would be meaningless unless implemented according to the announced timetable, El Mohandes said, emphasizing that \u201cour industry needs stable legislations, tax treatment, production inputs, and these decisions catering to the needs of the manufacturing sector means more production capacity, more supply, more stable prices, and consequently, lower price inflation.\u201d<\/span><\/p>\n

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