Driving force for the Egyptian economy

The Egypt-European Union (EU) Investment Conference in Cairo, on June 29 and 30, expanded the door for cooperation and investment between the two sides. 

Experts say that the increase in foreign investment is the driving force for the North African country's economy, in the context of a sharp decline in revenue from the Suez Canal and a slow recovery in the country’s tourism industry, due to geopolitical conflicts.

Egyptian President Abdel Fattah El-Sisi, European Commission (EC) President Ursula von der Leyen and more than 1,000 delegates attended the Egypt-EU Investment Conference.

This event is considered the first important step in implementing the Egypt-EU strategic and comprehensive partnership, established by the two sides in March 2024.

With the theme ‘Unlocking Egypt's advantages in a fast-changing world’, the conference included many discussions on measures to boost Egypt’s economic reform to build an attractive investment environment for the private sector.

Several memorandums of cooperation in industry, renewable energy, green hydrogen, information and communication, were signed within the framework of the conference.

According to the Egyptian Central Agency for Public Mobilisation and Statistics (CAPMAS), trade between Egypt and the EU reached 31.2 billion USD in 2023. EU investment in Egypt recorded 8.2 billion USD in fiscal year 2022-2023, up sharply from 3.2 billion USD in 2021-2022.

Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy, affirmed that the EU always accompanies Egypt's reform agenda, adding that supporting Egypt remains a priority for the EU.

The bloc recently committed 7.4 billion EUR in financial support for Egypt’s economic reform, and the funding is expected to be disbursed over the next three years.

European countries’ high priority to relations with Egypt will help the EU solve many challenges on its development path.

In a statement posted on social network X, EC President Ursula von der Leyen emphasised that Egypt's political and economic influence and the country's strategic position in the region, further increase the importance of Egypt-EU relations in the future.

Egypt plays a vital role in the conflict in Gaza, while Europe has many concerns related to the Middle East, most notably the wave of refugees from the region.

The Arab Spring of 2011 led to a refugee crisis in Europe, leaving EU countries devastated.

With Egypt's cooperation, fears of a new wave of migrants flooding into Europe due to the Israel-Hamas conflict can be reduced.

Italian Prime Minister Giorgia Meloni has repeatedly affirmed Egypt's important role in Europe's fight against illegal immigration. Close cooperation with Egypt, a country with abundant gas production, also helps the EU solve the energy security problem.

Egypt is trying to attract foreign direct investment and expand cooperation with partners, including the EU.

The World Bank (WB) downgraded Egypt's economic growth forecast for the current fiscal year to 2.8% in the fiscal year 2023-2024, in the context of a sharp decline in revenue from the Suez Canal and a slow recovery in the tourism industry due to conflicts.

Last April, the Egyptian Ministry of Planning and Economic Development announced that Suez Canal revenue had recorded a considerable decline of up to 50% year-on-year, due to the escalating tension in the Red Sea region.

Facing a series of economic risks, Egypt is striving to become a regional investment centre, with promising investment opportunities in green energy, technology, communications, agriculture, and logistics.

NDO