Egypt has announced billions of dollars of new projects, but political and business leaders have their work cut out for them to secure funding, much of which has not yet been put in place.
Abdel Fattah El Sisi, the Egyptian president, addressing attendees yesterday on the final day of an investment conference in Sharm El Sheikh, said Egypt needed vast resources to develop quickly to make up for lost time.
“The country wants US$200 billion to $300bn to develop,” he said.
The government has been outlining a shopping list of new billion-dollar mega-projects, including an expansion of the Suez Canal, construction of an new capital outside Cairo, the building of several large power plants, the reclamation of desert land and the construction of 1 million housing units.
Various deals totalling as much as $20bn, some with the government and others between private business, were announced in the first two days of the conference alone.
The government and businessmen have been working overtime to complete the financing and come up with a proper regulatory framework, officials and businessmen said.
The Egyptian Financial Supervisory Authority (EFSA) and others have been working on a series of changes, including registration rules and executive regulations, and a range of financial products and services, most notably sukuk.
“I have never seen such a pace of change. If you look at the last 18 months, it is more than the previous 10 years,” Sherif Samy, the EFSA chairman, told The National.
“In 2013, everyone was demonstrating and shooting one another. We felt it was a good time to do housekeeping. Do it now, because when the market picks up, we don’t want to have to ask for six months to fix all those,” he said.
Egypt’s economy has been stalled since the uprising that toppled the former president Hosni Mubarak in early 2011 and the subsequent election and removal of Mohammed Morsi, the Muslim Brotherhood president.
Mr Samy said that regulations governing the issue of sukuk were added to the capital markets law and sent to the cabinet last summer.
The amended law has been delayed since then, but there are signs that the cabinet will soon send it to the president for his signature.
“Sukuk was a taboo issue, because Morsi issued it. More importantly, when we looked technically at it, it was deficient, and it lacked a few articles to make it more technically sound,” Mr Samy said.
Hany Kadry, the finance minister, on Saturday told the conference that the government was looking at sukuk, the first time that a minister had mentioned the issue since the Morsi government introduced sukuk legislation to Egypt in early 2013.
The EFSA has also been tweaking its regulations on mergers and acquisitions and micro-insurance. It drew up changes to the mortgage law, issued by the government, in July, and a microfinance law issued in November.
The stock exchange recently introduced exchange traded funds and listed its first non-Egyptian company.
Mr Samy said the government had yet to take advantage of many of the new types of finance it had available.
“My personal crusade, as chief of EFSA, is to get the government to be smarter in terms of using financial instruments. Transportation, electricity, housing, they all have mega-projects, even the Suez Canal, of course.”
“This we can securitise, here we can issue bonds, this is a good listing company on the exchange, we can use leasing.”
Mohamed Omran, the chairman of the Egyptian stock exchange, told the conference he hoped the government would begin listing new shares in state-owned entities on the stock market as a way of raising capital without calling it “privatisation”.
Mr El Sisi told the conference yesterday that in negotiations with Siemens of Germany he had managed to persuade the company to speed up the construction of three proposed power plants with a combined output of 13,200 megawatts to 18 months from 36 months.
He also substantially bargained down the price and persuaded the company to provide low interest finance and an extended grace period, he said.
He then went on to repeat the process for a power plant to be built by General Electric, he added.