Arab Finance: Egypt ranks third among 18 markets in the Middle East and North Africa (MENA) region and 27th globally out of 202 markets in terms of investment openness, according to a report by Fitch Ratings reviewed by the Cabinet’s Information and Decision Support Center (IDSC).

The report highlighted the country’s strong potential to attract foreign direct investment (FDI), with expanding inflows across key sectors including oil and gas, automotive, information and communications technology (ICT), food manufacturing, renewable energy, infrastructure, and financial services.

Fitch attributed rising FDI inflows to several structural factors, including Egypt’s economic growth, strategic geographic location, low labor costs, skilled workforce, large domestic market, energy reserves, and tourism potential. The report also pointed to the role of Gulf financing and notes that maintaining a flexible exchange rate, in line with International Monetary Fund (IMF) recommendations, is expected to support sustained foreign currency inflows in the short to medium term.

Egypt aims to attract around $60 billion in FDI between 2026 and 2030, a target the report describes as achievable given that the country typically attracts between $9 billion and $11 billion annually, excluding exceptional mega-projects. By comparison, total FDI flows into Africa are usually below $60 billion per year.

Furthermore, the report identified Egypt as a key investment destination in North Africa, drawing multinational companies in sectors such as automotive, pharmaceuticals, and electronics. Recent measures to improve the investment environment include the introduction of a single approval system for project licenses and permits in 2023 and financial incentives supporting green hydrogen projects. Investment in manufacturing, infrastructure, and special economic zones continues to gain momentum.

Fitch also highlighted growing international interest, including Chinese investments under the Belt and Road Initiative, which targets around $400 billion across more than 600 projects in 57 member states of the Organization of Islamic Cooperation (OIC) by 2030. Egypt is among the main participating economies, with projects spanning the Suez Canal Economic Zone (SCZONE) and transport infrastructure.

The agency expected Egypt to lead the region in renewable energy capacity growth, driven by policy reforms introduced since 2014 that opened the market to private sector participation and reduced electricity subsidies. These measures have accelerated investments in solar and wind energy and are expected to deliver long-term industrial benefits. The government aims to generate 42% of its electricity from renewable sources by 2030, five years ahead of its previous target.

The report also noted efforts to attract FDI into coastal development and tourism, particularly along the North Coast, alongside the continued importance of the real estate sector, which contributes around 20% to gross domestic product (GDP).

Egypt’s FDI stock is the largest in North Africa, with the country ranking third regionally after Saudi Arabia and the United Arab Emirates. This position has been supported by policy tools such as the golden license, introduced in May 2022, which grants a unified approval for establishing, operating, and managing investment projects within 20 working days, reducing administrative procedures and accelerating market entry.

The investment framework is further supported by Investment Law No. 72 of 2017, which offers tax incentives, streamlined procedures, and guarantees for investors, including profit repatriation and equal treatment for foreign and domestic investors. Amendments introduced under Law No. 160 of 2023 expanded incentives and aimed to improve the geographic distribution of investments.

Fitch also commended Egypt’s free zones and investment zones, which offer tax and customs exemptions, simplified administrative procedures, and integrated infrastructure. Special economic zones, including the Suez Canal Economic Zone and the Golden Triangle Zone, continue to attract international investment through streamlined regulations and sector-focused development strategies.

According to the report, FDI inflows into Egypt are primarily sourced from the European Union (EU), the US, and Arab markets, with the UAE ranking as the largest investor in 2024/2025, followed by the US, the UK, Italy, Saudi Arabia, and Kuwait.