More FDI, please
Net foreign direct investment is expected to rebound next fiscal year to a near pre-pandemic level, Planning Minister Hala El Said told the Senate yesterday, saying she expects Egypt to land some USD 7 bn worth in FY2021-2022, just ahead of the USD 6.8 bn we are on track to land this fiscal year (pdf).
The bigger picture: Prior to the pandemic, annual net FDI was in excess of USD 7 bn, reaching USD 7.5 bn in FY2019-2020, according to Central Bank of Egypt figures. The country saw its highest level of FDI in more than a decade the year before, receiving USD 8.2 bn in 2018-2019.
FDI is recovering: Net FDI rose around 10% q-o-q in the second quarter of the government’s current fiscal year to USD 1.75 bn from USD 1.6 bn. FDI figures remained almost a third lower y-o-y than the USD 2.6 bn worth of net FDI recorded in 2Q2019-2020. S&P forecast the FDI-to-GDP ratio to bounce back to 2% in FY2021-2022 from 1.4% this fiscal year, before slipping marginally over the following two years.
The IMF thinks we might do a bit better, estimating in January (pdf) that FDI would reach USD 8.3 bn in FY2021-2022, before jumping to USD 11.4 bn in FY2022-2023, then to USD 14.6 bn and USD 16.3 bn in the following two years.