Egypt’s new era
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Minister of Investment Mahmoud Mohieldin of Egypt (left) with Angel Gurría ©Michael Sawyer/OECD |
Egypt has become the first Arab and first African country to sign the OECD Declaration on International Investment and Multinational Enterprises. Egypt has made impressive progress in reforming its investment policies in recent years–foreign investment in manufacturing has been fully liberalised, for instance, with the exception of defence-related industries–but significant barriers to both foreign and domestic businesses remain.
According to a new report on the country’s investment policies presented at the signing ceremony in July, barriers to entry have been eased for both domestic and foreign investors, customs procedures streamlined and a dedicated ministry set up in 2004 to promote and manage investment. The tax system in particular has been streamlined, with the corporate income tax rate cut from between 32% and 40% to a uniform 20% and the approximately 3,000 different types of exemptions eliminated.
The Investment Policy Review of Egypt 2007 says foreign direct investment inflows increased twelve-fold between 2001 and 2006, reaching $9 billion in the first three quarters of its 2007 fiscal year, compared with $6.1 billion for 2006 as a whole. Egypt has agreed to review restrictions in areas like tourism construction, courier services and exports. Further easing of restrictions would attract more investment, increas competition and benefit the economy a a whole, the new OECD report says.
©OECD Observer No. 262, July 2007
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