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2 July 2018

Egypt is Having the Economic Reforms That Investors Wanted for Decades—Will it Succeed?

Corporations want a piece of the cake that this ancient nation has been baking for the last 7 years since the dictatorship disappeared.

Known for its tourist attractions as the Pyramids of Giza, the city of Cairo, the Suez Canal, and more recently for being part of the Arab Spring that ousted dictator Hosni Mubarak. Egypt has a worldwide fame for being the site of once Pharaohs, tombs filled with mommies and valuable treasures. Now, the government wants to take the name of the country to new levels, with the goal of positioning the nation as a hub for international business with laissez faire economic reforms.

This maneuver needed the approval of new laws that democratized and freed the internal market, increasing the number of new and foreign companies that want to invest in Egypt, and at the same time witnessing the expansion of established industries within its borders.

Behind this complex endeavour is Sahar Nasr, Egypt’s minister of investment and international cooperation. She not only wants a new rise in the private sector, but also a strong reduction in state-ownership measures that for so long had been subject to corruption and abuse of power.

“We see big companies from across the world, coming from the US, Europe, the Gulf and Asia. I always look back and reflect to where Egypt was a few years ago and look at where we are today. I’m here in Cairo, a very safe and secure society”. Nasr told CNBC.

Numbers look really promising for Egypt, even the International Monetary Fund (IMF) praised the country’s efforts at executing these economic reforms very well. Let’s remember that in 2016 the IMF gave Egypt a three-year $12 billion loan. In return, the nation must cut fuel subsidies, introduce a new sales tax, float its currency and reduce bureaucracy in all sectors of the economy.

With a surplus in the gross domestic product (GDP), something that happened for the first time in many years, Egypt is building its own path to international markets as many other African nations have done in the last 15 years. Will it be a new paradise for global investment? Only time will tell.

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