$11.4 billion.. Foreign direct investment flows in Egypt during 2023

The Information and Decision Support Center of the Council of Ministers issued a new analysis that sheds light on investment prospects in Egypt.

Net foreign direct investment

The analysis indicated that net foreign direct investment in Egypt witnessed a significant increase in 2022; The World Investment Report for 2023 issued by the UNCTAD Foundation “United Nations Conference on Trade and Development” indicated that foreign direct investment flows in Egypt increased to 11.4 billion US dollars in 2022, compared to 5.12 billion US dollars in 2021, achieving a growth rate more than double (122). %).

According to the report, Egypt came in first place in terms of inflows to the African continent, accounting for 25% of total foreign investment flows to Africa in 2022, followed by South Africa and Ethiopia, and it is worth noting that the volume of foreign direct investment flows to Egypt accounted for about 75.8 percent. % of the total flows in North African countries, which amounted to $15 billion in 2022.

Increase merger and acquisition sales

Egypt also witnessed inflows more than double with the increase in cross-border mergers and acquisitions sales. The number of projects announced there doubled to 161 in 2022, and the value of international project financing deals rose by two-thirds to $24 billion.

On the other hand, the report indicated that most regions around the world, with the exception of East and Central Asia, recorded an increase in new projects announced, and in this regard, Africa witnessed a jump in 2022 by 39% in those projects, which resulted mainly from doubling the number of projects. In Egypt and its number increased in South Africa, Morocco and Kenya.

$42 billion 

New project announcements by Indian multinationals more than tripled to $42 billion. Two of the largest new projects were in the field of renewable energy in Egypt; The Acme Group announced the construction of a $13 billion plant in Egypt to produce 2.2 billion tons of green hydrogen per year, and Renew Power announced that it will set up an $8 billion green hydrogen plant in the Suez Canal Economic Zone.

Green hydrogen

The green hydrogen plant project in the Suez Canal Economic Zone is among the three largest projects announced in developing countries in 2022, and in the field of water, sanitation and hygiene (WASH), the 400 MW solar-powered desalination plant project in Egypt is among the three largest Projects in this field at a cost of $1.5 billion.

Egypt also ranked among the top 10 developing economies according to international investment in renewable energy during the period (2015-2022); It ranked seventh with a contribution of 14% in the share of renewable energy in the total value of projects, and 4% in the total share produced by developing countries.

Developing countries

The analysis stated that while investment announcements in the field of transmission lines increased in developing countries in 2021 compared to 2020, they slowed again in 2022, and most transmission line construction projects were in large emerging economies, including India. Egypt, Brazil, the United Arab Emirates and Kuwait, respectively. These projects include not only the construction of power plants, but also the announcement of pipeline projects to transmit electricity to foreign markets.

The UNCTAD report referred to the announcement of the Undersea Electricity Cable Project (Elica Interconnection), which includes the construction of a double submarine cable with a length of 963 km between Salloum in Egypt and Nea Makri in Attica, Greece, for the purpose of transmitting the cable 3 gigawatts of wind and solar energy.

Direct foreign investment

The analysis indicated that Egypt announced incentives for projects financed by foreign direct investment in major industries and fields, amounting to 55% of the value of the tax on income generated, and that the incentives will be granted if at least 50% of the investment project is funded or expanded in foreign currency. 

The International Monetary Fund expects that net foreign direct investment flows into Egypt will take a general upward trend, reaching about $17.1 billion in 2024-2025.

Economic potential

The analysis stated that indicators of foreign direct investment flows to Egypt highlight that Egypt enjoys many economic elements to attract domestic and foreign investments, supported by the macroeconomic reforms recently adopted by the state in recent years. This has always been confirmed by international institutions, which pointed to a number of the main strengths of the Egyptian economy.

The most prominent of which is the large size of the Egyptian economy and its well-established and diversified industrial base, with the possibility of investing in a wide range of economic sectors and activities, including the hydrocarbon sector and manufacturing industries, in addition to the presence of a large consumer market due to the population of Egypt, which made it the most populous country. in the Middle East and North Africa region.

In addition to Egypt's strategic location as a major trade route between Europe and Asia, which enhances the efficiency of trade flows and increases potential trading partners, as well as Egypt's access to large major markets through many trade agreements that guarantee investors easy expansion in international markets.