The Egyptian government is contemplating plans to attract new US investments, expressing its willingness to take any exceptional measures that encourage the private sector to increase its investments.
During a cabinet session, Prime Minister Mostafa Madbouli said that the government plans to hold a number of regular meetings with the aim of developing an action plan to attract investments from the United States, especially large companies and entities, as part of the state’s plan to diversify investments.
He added that the government will also focus on partnerships with a number of top US companies in health, military production, investment in the Suez Canal area, housing, and utilities.
"We are prepared to take any exceptional measures to encourage the private sector to increase its investments. It is a key partner in development," he said.
This comes at a time when foreign investment in Egyptian treasury bills (T-bills) have increased by 21.6 percent in January, reflecting the attractiveness of the Egyptian debt despite the emerging market crisis.
In its latest monthly report, the Central Bank of Egypt (CBE) reported that foreign investments in T-bills in January climbed to nearly $13.20 billion, compared to an equivalent of $10.70 billion at the end of December 2018, an increase of $2.49 billion.
According to official data, Foreign investments in T-bills reached their highest level in March 2018 to $21.5 billion, whereas they declined to less than $25 million at the beginning of 2016.
But the Central Bank's flexibility in the exchange rate, known as the floating of the pound, in November 2016, led to the loss of more than half the local currency’s value, yet it helped stabilize the exchange rate.
Bloomberg news agency said last month that Egypt's real rate of return remained high compared to emerging markets, even after last month's Central Bank cut interest rates, the first such move in almost a year.
CBE data showed net portfolio investment in Egypt declined in 2017-2018 to $12 billion, from $15.9 billion in the previous fiscal year, to minus $3.2 billion in the first quarter of this fiscal year, compared with $7.4 billion in the same quarter of last year.
Egypt faces challenges in providing foreign exchange, with its external debt rising and foreign direct investment falling, but the external financial situation appears to be consistent with the rise in foreign exchange reserves, which reached $42.6 billion at the end of January, enough to cover 7.7 months of imports.
Egypt's foreign debt reached $93.1 billion in the first quarter of fiscal year 2018-2019, following a significant hike in recent years to $46 billion in fiscal year 2014, according to central bank data.
Egypt is one of the top 20 sovereign lenders and the country is focusing on short-term debt offerings, making it the second-largest country in the world in terms of debt-cycle rate, according to Standard & Poor's.
However, an Egyptian Finance Ministry official said last month that the country was looking to increase its long-term debt in return for short-term debt to 70 percent of the annual domestic portfolio by 2022, up from 5 percent in the previous fiscal year.
