Egypt’s strong long-term fundamentals and favorable demographics have served the country well even during challenging political and economic times in recent years. The country has a diverse economy with agriculture, manufacturing, retail, and real estate making up significant portions of its GDP. What is more, Egypt is the largest market in the MENA region by population with an increasing young consumer base. Today, one of every four Arabs lives in Egypt.
Launched in late 2016 and supported by a USD 12 billion IMF extended-fund facility, the Egyptian government’s economic reform program addresses deep-rooted problems in the economy. A key early step in the program was the liberalization of the exchange rate, which enabled the rebuilding of the country’s foreign currency reserves. The government is also working to trim its budget deficit through restructuring of expenditures and fiscal consolidation. In September 2016, a 13% value-added tax (VAT) was implemented; the rate was later increased to 14%. Another key reform measure is the government’s gradual removal of energy and fuel subsidies. This program offers a sustainable solution to Egypt’s economic challenges that will unlock the country’s potential as an investment destination.
The EAEF has long believed in Egypt’s economic potential and strong fundamentals, and this belief has led us to invest in the country even during challenging economic times. As the economic reform program has begun to take effect, our confidence in the country’s potential for success has only grown.