** #2 2017 wasn’t a great year for foreign investment in Egypt, but real estate, hospitality and construction were winners (at least on a project-count basis), according to a 2017 EY Africa report on FDI (pdf) released yesterday. The report, which looks at FDI on a volume-of-projects basis as opposed to in USD terms, says Egypt’s attractiveness to offshore investors slipped to sixth place among its African peers as new projects fell to 56 in 2017 from 79 in 2016. The telecoms, consumer products and mineral resources sectors all saw fewer new projects kick off in 2017. Our market share of FDI-backed projects in North Africa fell 30% y-o-y, it says. Using CBE data, we see net FDI fell to USD 7.7 bn in the state’s 2017-18 fiscal year from USD 7.9 bn in previous fiscal year.

Egypt was a regional hotspot for real estate: EY notes that Egypt, along with Ethiopia, was the most sought after destination for projects in real estate, hospitality and construction sectors. FDI in those sectors more than doubled to 105 projects in 2017 from 45. The report notes that sentiment in Egypt was still high on the back of the ongoing recovery in tourism and the Madbouly government’s economic reform program.

Keep it all in context: We may be turning a corner in 2018, according to an UNCTAD report out earlier this month. Egypt was the most attractive destination for FDI in Africa in the first half of this calendar year, with the total inflows up 24% compared to 1H2017, according to the UN body. This came despite a 3% decline in inflows to Africa in 1H2018.

But if interest rates don’t go down, you can forget about a significant pickup in foreign or domestic investment.

Continent-wide, EY says FDI was concentrated in ‘next generation’ sectors such as manufacturing, infrastructure and power generation. Morocco was the star of the EY report, with a 19% y-o-y increase in project volume last year. South Africa, Kenya, Nigeria and Ethiopia rounded out the top five, which together accounted for 40% of the continent’s FDI projects. Inbound FDI was led by US investors last year, followed by Western Europe, namely the UK, France and Germany.