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Following a currency crisis in 2016, Egypt implemented a series of reforms, the results of which are apparent across key macroeconomic indicators. GDP growth rose from 5.3% in FY 2017/18 to 5.6% in FY 2018/19, and unemployment fell to 7.5%. Although Egypt faces the challenges of 2020 from a relatively robust position, lockdown measures and market turbulence have significantly impacted the economy. In April 2020 the Ministry of Finance downgraded its growth forecast for FY 2020/21 from 4.5% to 3.5%, before reducing this further to 2% in May 2020. Nevertheless, this makes Egypt the only Arab economy expected to experience positive GDP growth in 2020 and one of the few countries worldwide not set to enter recession. While the full impact of the pandemic remains to be seen, the country has moved to mitigate the worst effects by boosting government investment, and supporting small businesses and strategic industries that were adversely affected by the crisis. This chapter contains interviews with Mohamed Maait, Minister of Finance; and Ahmed Abd El Wahab, Executive Director, General Authority for Investment and Free Zones.

This chapter explores Egypt’s legal system, including the laws that are most relevant for foreign investors. These include those that regulate corporate operations, labour, investment and property, as well as the regulations governing the country’s free zones. In recent years efforts have been made to ensure that local and international investors are treated equally, and a number of business types are open to full foreign ownership.

This chapter offers an overview of Egypt’s taxation system, which has undergone a number of reforms in recent years in an effort to build an investor-friendly environment. Recent changes include the introduction of stamp tax on the disposal of securities, updates to the progressive rate for personal income tax, and the proposal of a simple regime for small and medium-sized enterprises. It contains a viewpoint from Cherif Hammouda, Partner, RSM.

Both the health and education sectors are in the process of significant reform. A universal health insurance (UHI) plan is currently being implemented, which promises widespread change to the nation’s administration of care. Although Covid-19 has placed a considerable strain on health infrastructure, the pandemic provides Egypt with an opportunity to streamline reforms and strengthen weak spots in the system. The rollout of the UHI scheme, alongside the growth of the local pharmaceuticals industry, should also help to attract investment. Meanwhile, for the next decade, the Ministry of Education is focused on implementing a major reform programme known as Education 2.0. The initiative plans to overhaul K-12 schooling by introducing student-centred teaching and competency-based learning, with a strong focus on technology. Although the country’s schools still face challenges of overcrowding and poor-quality infrastructure, the authorities’ increasing openness to international and private investment should ensure that the outlook remains bright.

After years of recovery following the 2011 revolution, Egypt is once again a sought-after tourist destination. In 2019 the sector contributed LE496.4bn ($30.6bn) to GDP, representing around 9.3% of the total, a 0.2% increase on the previous year. Although the spread of Covid-19 significantly impacted the industry in the first half of 2020, it is expected that growth will resume in 2021. Rising visitor numbers will be supported by the construction of Capital International Airport, which will serve the new capital city starting in late 2020 or early 2021. In addition, new flight routes are expected to open, connecting the country’s resorts and archaeological sites in order to draw in more leisure tourists, which account for around 86% of total visitor spending. It is hoped that the move to establish Egypt as a world leader in antiquities tourism, alongside the development of traditional sun-and-sea offerings, will reinvigorate the sector.