The hype over the investment climate after the Egyptian Economic Development Conference in 2015 wore off very quickly. The current Investment Act had cut free zones, alienated investors and other government bodies alike with its one-stop shop policy, and sent the wrong message on policy stability. Egypt did see its ranking in the World Bank’s Doing Business 2017 rise to 122 from 131 on improvements to electricity supply, establishing a new company, and improvements in protecting minority shareholder rights. We fell short, however, in cross border trade, getting credit, resolving insolvency, obtaining construction permits, and registering property while showing no improvement in enforcing contracts.

Investment Minister Dalia Khorshid came in with plans to raise foreign direct investment to USD 10-15 bn per year and foreign portfolio investment of some USD 5-10 bn. She is also targeting raising Egypt’s ranking in the Doing Business report to 90. It became a ministry priority that any policy decision taken to achieve these would not be top-down and would include input from the investment and business communities. Her policies will focus on tax and non-tax incentives, cutting bureaucracy, and increase promotion for investment projects.

The first major policy decision announced was the program to IPO state-ownedcompanies to generate FDI, starting with the banking and energy sectors. The first of the banks will be Banque du Caire, which is expected in the market sometime in the first half of 2017 and which will be managed by EFG Hermes and HSBC. On the energy front, the Misr Fertilizers Production Company (MOPCO) kicked it off in September, with share prices rising 295% on the first day of trading. Egypt’s biggest refiner, the Middle East Oil Refinery (MIDOR), has been slated for an IPO, though no date has been announced. Energy contractor Enppi is being considered for the second wave of IPOs, reportedly some time in 2017.

Then came the Supreme Investment Council (headed by President Abdel Fattah El Sisi), which adopted a basket of 17 measures designed to promote investment, many of them long called for by the business community. These are expected to form the backbone of the new investment act, with policies including five-year tax exemptions for strategic industrial and agricultural projects that have export value or that are imported; holding off on the capital tax for another three years; discounts on land for urban development; temporary one-year permits for unlicensed factories; free land in Upper Egypt for industry project. With Ittihadiya’s blessing, these incentives would supersede other government policies, in effect, a guarantee that they would be protected from bureaucracy. The announcement was met with much fanfare from the business community.

For good measure, much of these incentives will be codified into law through a rewrite of the Investment Act. Khorshid had affirmed that the law will reintroduce free zones. The act will reportedly offer special income tax breaks to labor-intensive companies in strategic sectors and geographies and could see custom duties on imported capital goods reduced from 5% to 2%. The legislation will set rigorous deadlines for the approval and issuance of permits. The law will include provisions for facilitating the repatriation of USD profits, in addition to enforcing contracts, or so ministry officials promised.

That’s not the say the Investment Act will pass without debate. The Finance Ministry was reportedly not happy with the tax incentives and prefers to adopt rebates. Some business associations have also come out against the law, attacking in particular the one-stop shop policy, which was maintained in the new act. While consensus appears to elude the law, Khorshid is adamant on getting cabinet approval before the year is out.