“Egypt is central to our regional business model – the talent base, heightened awareness of the need for cross-sector partnership and opportunities for growth are exceptional,” says Ramadan, President and CEO, GE North East Africa.
Since the end of 2016, the Egyptian authorities have embarked on an ambitious reform program and have taken decisive measures aimed at restoring macroeconomic stability and sustainable public finances. At the same time, by strengthening social protection measures, they have sought to protect the most vulnerable. The reform program was launched when its economy faced rising imbalances that led to high public debt, a widening current account deficit, and declining official reserves. Two years after the implementation of the first major reform, what is your current view of the Egyptian economy?
Economic reforms, by their very nature, are long-term, and require a broader and more patient outlook than day-to-day analysis permits. With that said, the steps taken to re-energize local industry, investment and confidence have yielded results – the cabinet’s recent report to parliament indicates a growth rate of 5.4 percent during the first half of the fiscal year 2018/2019, with a double digit increase in public investment. We’re seeing the results – with a broad talent base and increasing investor confidence, Egypt is again positioning itself as a viable regional economic hub.
Many countries have averted economic crises and achieved a measure of macro-stability, but few have sustained that stabilization and moved on to further modernization, which in turn drives sustained and inclusive growth. Egypt has a chance to do so. This will not only require broadening and deepening the reform agenda, but it will also require a fundamental shift away from the state as a provider of employment and output to creating an enabling environment for the private sector to invest more, export more and generate more jobs. How would you describe the attitude of the government towards the private sector?
The need for partnership has never been more prevalent or necessary. Economic measures of this magnitude need broad, multi-sector and industry partnership, and we’re incredibly proud of the commitment and level of partnership that GE has in the country. That is owed in large part to the awareness of the government of the need for a partnership mandate. Job growth is dependent on multiple factors – reforms spur investment, which in turn drive job growth and increase confidence. It is also heavily dependent on the ability of the private sector to contribute effectively and sustainably. We are fortunate to be partners across a broad base of industries, including critical ones such as energy and healthcare, and are seeing a marked increase in overall confidence.
Some of the reforms to strengthen the business environment include tax incentives, reduced bureaucracy, and an investor center – a one-stop shop to simplify the process of establishing a company. The measures have helped prop up Egypt's standing as a business-friendly environment. The country rose eight places to 120th in the World Bank’s 2019 Ease of Doing Business index, published in November. The government has also introduced at least 10 pieces of legislation intended to expand the private sector and boost economic growth. Some of those new laws relate to investment, companies, bankruptcy among others. What has been the impact of the reforms on your business operation and investment outlook in the country?
Throughout the reform process, GE has remained wholly committed to partnering with the Egyptian government in revitalizing the local economy. Egypt is central to our regional business model – the talent base, heightened awareness of the need for cross-sector partnership and opportunities for growth are exceptional. While we remain immensely proud of the work we have done in Egypt thus far, there remains much more we can, and will do, to support local growth.
As one of the biggest emerging economies in the region, Egypt seeks to play a significant role in ensuring sustainable economic growth in Africa. One of the priorities of the government is to enhance intra-African integration, as the main vehicle through which it could fulfill its collective developmental goals and achieve the targets of Africa’s development Agenda 2063. What are the key fundamentals that made you choose Egypt as a destination, and to what extent can it play the role of ‘gateway to Africa?
Egypt has been, and will remain, a focal point for Africa. Its position as a cross-regional hub is unique, allowing it to transcend borders. This is clear through the multiple free trade agreements driving cross-border growth and opportunities, as well as the opportunity to be a part of a north-to-south Africa trade bloc that can significantly spur investment. It also allows the opportunity to find new and perhaps under-represented areas of investment. The opportunities throughout Africa are ubiquitous, and Egypt is well positioned to realize them.