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Egypt courts foreign investors at Red Sea summit

Egypt expects to sign agreements worth up to $20 billion at a weekend investment summit in the Red Sea resort of Sharm el-Sheikh, its investment minister said on Friday.

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Egypt wants the conference to project an image of stability and deepen investor confidence after four years of political and economic turmoil triggered by a 2011 uprising that toppled veteran ruler Hosni Mubarak.

Cairo hopes the summit will allow it to double foreign investment in this fiscal year to $8 billion, despite an Islamist insurgency in northern Sinai and militant attacks across the country.

“I’m expecting here to see $15-$20 billion in agreements signed,” Investment Minister Ashraf Salman told Reuters, adding the deals would cover power plants, real estate and agricultural projects.

General Electric said it would invest $200 million in a manufacturing and training facility which it sees as part of an economic hub being built near the Suez Canal.

It also said it had delivered 34 gas turbines to Egypt as part of a $1.9 billion power project.

Egypt also expects to sign several memoranda of understanding at the conference, including one for the construction of a new administrative capital with a price-tag of about $40 billion, Salman said. He gave no details.

The conference will be a key test of Egypt’s reform agenda under President Abdel Fattah al-Sisi, who wants to remove investment barriers to help turn around the ailing economy of the Arab world’s most populous country.

Sisi has won praise from foreign investors by cutting fuel subsidies that placed a heavy burden on the state and implementing other reforms.

The head of the International Finance Corporation (IFC), a global development institution, said he was encouraged by such reforms but called for more action to improve the investment climate.

“We are happy to see that progress but there is a lot more work that needs to be done. The sign is positive, we need to see more,” Jin-Yong Cai told Reuters at the conference. He said regulations needed to be improved.

On Thursday, Sisi ratified an amended investment law designed to create a one-stop shop for investors.

The government targets a budget deficit of 10 percent of gross domestic product by 2018/19, down from 15 percent last year. Unemployment, currently around 13 percent, is also a major challenge.

GDP is expected to grow by four percent in the fiscal year ending in June, up from 2.2 percent last year, officials say.

(REUTERS)

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