Let’s get three things taken care of right off the bat, shall we, and make sure we’re all speaking the same language?

#1- This report is drawn from data in our Enterprise Investment Tracker, wherein we chronicle salient data points from all of the stories we cover under this theme. By definition, it’s not complete — plenty of companies make investments without announcing them, particularly (a) smaller and mid-sized companies and (b) companies that like to fly under the radar and are not publicly traded. But after six years of doing this, we’re convinced it captures the trend and direction year-on-year.

#2- None of the figures you’re reading here cover spending on opex. What you pay to run your plant or drill a hole or move stuff around isn’t a balance sheet item — it goes on your income statement as an operating expense. Our tracker covers capital expenditures — announced or executed. Stuff that involves companies financing things from their cashflows, by raising debt or equity, or through retained earnings.

#3- Plenty of companies choose not to disclose a value on their investment, as is the case with M&A (above)

So, with those caveats, how did we fare on the investment front in 2020? Not as badly as you might have thought.

We captured 92 investments worth a combined EGP 403 bn in 2020 — again, keep in mind that figure isn’t complete and you can’t use it to calculate an average: 16 of the investments on which we reported did not put a value on the transactions.

In 2019, we chronicled 97 investments worth a combined EGP 690.5 bn. Sounds grim when you look at the value figure, right? Take a breath: Well over EGP 200 bn of the investments on which we reported last year have since been scrapped, including two “clean coal” (what a concept…) powerplants worth nearly USD 9 bn together.

Top three industries for investment in 2020, by value:

• Infrastructure at EGP 168 bn, thanks solely to the National Egyptian Company for Railroad Industries, in which the government is offering the majority of the equity to private-sector companies (you can argue that this is too vague to qualify as an investment announcement, but given the administration’s track record on infrastructure projects…);
• Telecoms and technology at EGP 35 bn as Orange, Vodafone Egypt, Etisalat and Teleco Egypt all announced bns in network upgrade plans;
• Banking and financial services at EGP 31 bn.

Rounding out the top five by value in 2020: Retail and manufacturing.

By comparison, the top industries by value in 2019 were energy (EGP 290 bn), oil and gas (EGP 92 bn), retail (EGP 68 bn), real estate (EGP 68 bn) and healthcare (EGP 34 bn).

The #1 sector by number of transactions this year and last: Manufacturing.

The biggest pickups in investment this year by value came in banking and financial services (up 13x), followed by infrastructure (+540%), manufacturing (+164% thanks to a late-in-the-year push), and telecoms (+96%).

Who suffered this year? Oversupply nuked new investment in cement, while real estate, healthcare and and oil and gas were slammed by covid-19.

We saw slightly less foreign involvement in the investment stories we covered in 2020: 71% of transactions we chronicled involved either straight foreign investment or a partnership between foreign and local players. In 2019, the comparable figure was 77%.

Companies were less interested in greenfields during this year of covid. The ratio of investments in greenfields vs. expansion of existing operations was 0.72 this year. Last year, we had more than two greenfield announcements for every expansion.

Unsung trends of the year: Continued appetite for Egypt from development finance institutions. Everybody and their sister is raising a private equity fund to go after SMEs.

What to look out for in 2021? For starters: An end to the pandemic — and further interest rate cuts from the Central Bank of Egypt, which will make finance for investment and acquisition alike more affordable for companies — and encourage them to put their capital to work rather than collecting easy interest at the bank.

The pipeline speaks now to optimism on the part of Egyptian corporates, as we noted a few weeks back. And don’t take our word for it: Now, some 87% of Egyptian businesses say they plan to invest more next year, according to an HSBC survey.