At a recent investments conference, I was asked by a fellow investment expert about the one or two main challenges the Egyptian Economy is facing, which is leading to the need to devalue every few years. Without getting into much of analysis that economists would do on gross domestic product (GDP) growth rate, inflation rate, trade balance, etc.., which are all great indicators to follow, the first thing that came to my mind as the number one challenge is that we do not invest as much, and this statement is true for the private sector much more than the public sector.

The private and public investments (the capital investments ratio) in 2021 in Egypt depicts a total investment to GDP ratio of c.12%; for comparison, the world average in 2021 based on 153 countries hovers around c.24%. Capital investment in Egypt and other countries is calculated as the purchases of new plant and equipment by firms, as a percent of GDP. A high number is good for long-term economic growth as current investment leads to greater future production, and hence, higher growth rates for the economy, lower unemployment rate, higher taxes collected, lower budget deficit, more exports vis-a-vis imports, and the rest of the cycle follows.

This large gap of c.12% on our side and the world average, which is almost double this number, definitely defines how far we are in promoting investments in our economy. A c.31% for the same ratio in Morocco in 2021, definitely says it all.

It definitely says that it is not just to have a friendly investment law, or to smoothen the investment processes for local and foreign investments, or to publish a white paper to separate the sectors where the government will be investing or not, it is something totally different that needs to change to a larger extent the fundamentals of investing into our economy.

There would be many ideas and proposals for such; however, the main pillar of such is a full deregulation of all sectors in the economy, hence allowing the private sector to acquire class licenses in all and every sector they see they can invest in. The private sector should be treated on par with public sector entities when it comes to taxes, acquisition of licenses and access to infrastructure and land for development. Taxes should be simplified to a much larger extent, where there would be only two types to be paid by corporates: value-added tax (VAT) and end-of-year corporates taxes; anything else should be added to those two pools or abolished, with an expansion in launching free zone areas for export projects.

More and more private licenses should be given to large infrastructure projects such as airports, ports, and aviation. Healthcare and education licenses should be given without any restrictions on ownerships or complications for operational licenses. Land should be provided at the cost for all projects geared towards promoting incoming tourists, and the list would follow for each industry; I believe all players in each industry would be in a better position to give their best recommendations. This would be an open invitation for stakeholders in each industry to propose what they need to guarantee an all deregulated sector where they can work more efficiently and profitably.