INTERNATIONAL ECONOMICS
EGYPT’S FDI
NGUYEN THI THANH XUAN
IBM 64A
01 02 03
FDI inflow Outlook Solution to
to Egypt to 2025 cooperate
from 2016 with
to 2023 Vietnam in
the future
1. FDI INFLOW TO EGYPT
FROM 2016 TO 2023
ANALYSIS OF FDI
1.1 TRENDS AND VOLUME
1.1.1. Annual FDI Inflows
Initial Growth and Stabilization (2016-2019)
Pandemic-Driven Decline (2020-2021)
Post-Pandemic Recovery (2022-2023)
=> The period 2016-2023 shows an upward trend overall
Data
source:
World
Bank
Egypt Foreign Direct Investment 2016-2023
2016-2019: Increasing steadily from $8.11 billion to $9.01 billion
2020-2021: Dropping significantly to $5.85 billion in 2020 and $5.12 billion in
2021
2022-2023: Rebounding sharply in 2022 to $11.40 billion but fell to $9.84
billion in 2023
1.1.2. SECTORAL BREAKDOWN OF FDI
Data source: Central Bank of Egypt and UNCTAD Reports
1.1.2. SECTORAL BREAKDOWN OF FDI
Oil & Gas Services Manufacturing Real Estate Construction
A major Leading recipient The second-largest In 2016, the sector Accounted for 1.5%
contributor to of FDI, attracting recipient of FDI in accounted for 4% in 2016 and stayed
Egypt's FDI $5.94 billion, or Egypt. of total FDI minor in following
inflows - 54% of 59.16% Attracted $3.34 By 2022/2023, it years.
total FDI in 2016. Financial Services billion attracted $552.3
Retained Sector attracted million
approximately $2.13 billion
60% of total FDI Communication and
inflows in 2022 IT Sector attracted
$836 million
1. FDI INFLOW TO EGYPT
FROM 2016 TO 2023
1.2 SOURCE OF FDI
Source:
Investing
in Egypt -
Mauritius
Trade
Easy
1.2.1. SOURCE OF FDI
United Arab Emirates (UAE)
01 Accounted for 13.1%
Focusing on real estate, energy, and
tourism
European countries
04 The Netherlands (5.7%), Switzerland
Italy
02 Accountaed for 11.4% (4.2%), and Luxembourg (4.1%)
Focusing on energy, natural gas, and Focusing on financial services, industrial
renewable energy sectors, and renewable energy
China
03 Saudi Arabia 05 Accountaed for 4.9%
Accountaed for 10.5%
Focusing on infrastructure, real estate, Focusing on the Belt and Road Initiative
and food security and infrastructure projects
1.2.2. Motivations for Investment
With over 100 million people,
Oil, natural gas, and mineral
youngl and diverse population
reserves, new gas discoveries
=> Significant opportunities across
=> Attract energy sector investments.
various sectors
2. Large Consumer 4. Natural
Market Resources
1. Strategic 3. Economic 5. Renewable
Location Reforms Energy
Positioned at the crossroads of Recent tax cuts, investment incentives, Egypt’s focus on solar and wind
Africa, Europe, and the Middle East, and new laws power
controled over the Suez Canal => More favorable business environment, => New investment opportunities in
=> Easy access to global markets particularly in infrastructure, energy, and the renewable energy market.
and reduces shipping costs. manufacturing
1.2.2. Motivations for Investment
Strong geopolitical ties with Major projects, including the Suez
countries like the UAE, Saudi Arabia, Canal expansion and New
and China, which invest in sectors Administrative Capital, support long-
such as real estate, infrastructure, term economic growth.
and energy
7. Bilateral 9. Infrastructure
Relations Development
6. Tourism 8. Diversification 10. Industrial
Egypt’s rich historical and Transformation
For European countries like Switzerland
cultural heritage presents Investments in modernizing
and Luxembourg, Egypt offers
investment potential in manufacturing sectors like textiles,
opportunities to diversify investment
hospitality, infrastructure, and automotive, and electronics offer
portfolios with high growth potential.
tourism-related services. opportunities in Egypt’s industrial
development.
1.2.3. DIFFERENT
TYPES OF FDI
INFLOW TO EGYPT
6. Build-
1. Greenfield
Operate-
Investments
2. Mergers and 5. Privatization Transfer (BOT)
Energy (natural Acquisitions and Public- Projects
gas and (M&A) 3. Portfolio 4. Joint Private
renewable Energy
Energy Investments Ventures (JVs) Partnerships Transportation
energy)
Telecommunic (PPP) Water
Automotive Banking Oil and gas
ations management
manufacturing Real estate exploration Transportation
Food
Industrial zones Construction, Utilities
processing
Consumer Healthcare
Banking
goods
2. OUTLOOK TO 2025
KEY DRIVERS AND
2.1 PROJECTIONS
2.1.1. Overall outlook
a) FDI Growth Projections for 2025:
Egypt's FDI inflows are expected to be supported by policy adjustments
and improved external financial position.
FDI is projected to average USD 16.5 billion in FY25 and FY26.
Key sectors contributing to FDI growth: renewable energy, manufacturing,
and logistics.
2. CHAPTER 2: OUTLOOK
TO 2025
KEY DRIVERS AND
2.1 PROJECTIONS
2.1.1. Overall outlook
b) Factors Influencing FDI Growth:
Strategic location, young workforce, and infrastructure development.
Simplified business procedures and investment incentives, particularly for
European investors.
Ras El-Hekma project as a significant contributor to FDI.
2. CHAPTER 2: OUTLOOK
TO 2025
KEY DRIVERS AND
2.1 PROJECTIONS
2.1.1. Overall outlook
c) Fiscal Adjustments and Economic Stability:
Efficient management of public finances and increased foreign exchange
reserves.
Stable environment for foreign investors due to fiscal measures.
2. CHAPTER 2: OUTLOOK
TO 2025
KEY DRIVERS AND
2.1 PROJECTIONS
2.1.1. Overall outlook
d) Geopolitical Risks and Domestic Challenges:
Potential impact of geopolitical tensions in the Middle East.
Risks from inflation, unemployment, and social instability affecting
economic reforms and FDI.
2. CHAPTER 2: OUTLOOK
TO 2025
KEY DRIVERS AND
2.1 PROJECTIONS
2.1.1. Overall outlook
d) Geopolitical Risks and Domestic Challenges:
Potential impact of geopolitical tensions in the Middle East.
Risks from inflation, unemployment, and social instability affecting
economic reforms and FDI.
=> FDI growth is expected, but geopolitical and socio-economic challenges
may slow progress. Structural reforms and IMF alignment will support long-
term growth.
2.2.1. NATIONAL ECONOMIC
TRANSFORMATION PLAN
Economic Reforms
and Incentives
Strategic
International
Partnerships in Egypt
Sectoral Investment
Opportunities
2.1.2.1. ECONOMIC REFORMS
AND INCENTIVES
01 02
Tax and Financial Incentives
Structural Reforms
Reduced Tax Burdens
Exchange Rate Flexibility
Incentives for Specific
Deregulation and Ease of
Sectors
Doing Business
04
BORCELLE
03
Fiscal Policy Adjustments International Collaboration
Public Spending Strategic Partnerships
Reforms
Cap on Public
Investments
2.1.2.2 STRATEGIC
INTERNATIONAL
PARTNERSHIPS IN EGYPT
Strategic International Partnerships:
Egypt strengthens ties with global
economic players.
Partnerships with the European Union
(EU) and Gulf Cooperation Council
(GCC) countries are key.
Strategic International Partnerships:
Egypt presents 153 high-value
investment opportunities to European
investors.
Focus on sectors like logistics,
healthcare, and manufacturing.
Positions Egypt as a vital partner for
accessing African and Middle Eastern
markets.
2.1.2.2 STRATEGIC
INTERNATIONAL
PARTNERSHIPS IN EGYPT
Ras El-Hekma Project and GCC Support:
Large-scale project supported by GCC
countries, bringing $24 billion in
foreign currency inflows.
Boosts Egypt's foreign reserves to
$44.8 billion by late 2024.
Economic Growth and Investor
Confidence:
Foreign investments contribute to
Egypt's projected 4% GDP growth in
2025.
Diversification of investment sources
reduces vulnerability to external
shocks.
2.1.2.3. SECTORAL
INVESTMENT
OPPORTUNITIES
INVESTMENT
TARGETED HIGH-GROWTH ENVIRONMENT
SECTORS INDUSTRIES AND STRATEGIC
FOR FDI ALIGNMENT
Focus on logistics Prioritizing IT, Egypt’s targeted
and renewable textiles, sectors align with
energy automobiles, global trade
pharmaceuticals, networks and
and food address
production environmental and
infrastructure
needs.
3. SOLUTIONS TO
COOPERATE WITH VIETNAM
CURRENT BILATERAL
3.1 INVESTMENT COOPERATION
BETWEEN VIETNAM AND EGYPT
Strengthening Trade and
Investment Relations
Vietnam and Egypt strengthen
ties through events, promoting
investment in sectors like
agriculture, textiles, seafood,
and infrastructure.
3.1.1. CURRENT BILATERAL
INVESTMENT COOPERATION
BETWEEN VIETNAM AND EGYPT
Investment Opportunities in the Energy Sector Collaboration in Infrastructure and
Egypt’s strong renewable energy potential has Industrial Project
attracted Vietnamese interest in solar and wind
Vietnam and Egypt are collaborating on
energy projects, supported by international
infrastructure projects to boost economic
partners.
growth and future FDI.
Improving the Investment Environment
Vietnam and Egypt are improving
investment climates to attract more foreign
investment.
3.2. PROPOSED SOLUTION
Trade and Economic
Tourism Diplomacy,
Investment
Promotion Government
Potential for further Joint marketing,
Collaboration
collaboration in travel packages, and Diplomatic meetings
agriculture, textiles, promoting cultural emphasize
and joint investments and adventure enhancing trade and
in energy and tourisma investment ties
infrastructure. through agreements
and trade missions
3.2. PROPOSED SOLUTION
Knowledge and
Cultural Supply Chain
Technology
Exchange Collaboration
Exchange
Vietnam and Egypt can Egypt and Vietnam
Cultural diplomacy,
collaborate in tech, can strengthen ties
like the Vietnam-
infrastructure, by integrating their
Egypt Cultural Week,
sustainable agriculture, supply chains,
strengthens bilateral
and green innovation to exchanging raw
ties.
strengthen both materials and
economies. finished goods for
mutual benefit.
