Egypt is on track for increased political stability, making it a good opportunity for potential investors, Egypt’s foreign minister Nabil Fahmy told CNBC.
Since Egypt’s first democratically elected president, Mohammad Morsi, was toppled by the army in July this year, the country has seen continued clashes, as Morsi supporters rally for his reinstatement. But Egypt’s volatile political environment has discouraged potential investors — at a time when the country needs it most.
Egypt has high fiscal and public deficits, rising to nearly 100 percent of its gross domestic product at the end of June this year, according to the World Bank. The country’s unemployment rate stood at 13 percent in June this year and crucially three-quarters of the unemployed are between 15 and 29 years of age. Egypt’s high youth employment rate also weighs on social tensions.
But the country’s foreign minister believes the growing young population is an asset for attracting potential investors. He said: “over 60 percent are less than 30 [years old].” This constitutes a “huge productive force for the generation to come and a huge retail demand for whatever you produce.”
In order to the get the best deals, investors need to move fast. “The price of business entities today is quite low in Egypt so if I was an investor I would buy up whatever I could,” he added.
“If you’re look at an investment where you’re looking for a profit two of three years down the line tourism, food stuffs, energy you can’t lose.”
The minister recognizes Egypt struggles to provide the political stability needed to attract potential investors. However he expects Egypt’s constitution to be adopted “hopefully within a month.”
“It may be a little bit to the left or a little bit to the right. But these are the rules of the game and you can’t go beyond that.”
“I expect that once the constitution is adopted … you will see a sharp turn in investment attitudes and business confidence.”
Fahmy believes that political reform in Egypt holds a lot of promise for the country’s stability in the future. On the new constitution he said “That’s really the big difference between now and last year. Last year we did not have a constitution adopted with different stakeholders participating and therefore it’s not something we would rally around.”