From a distance, it is easy to conclude that Egypt is an arid environment for investors. Being only 0.13% of the MSCI Emerging Markets Index, the country is easily dismissed given its questionable democracy, high rate of inflation, recent currency devaluation and twin deficits. Look closely, and the conditions become more attractive: low labour costs, high literacy levels and a series of economic reforms suggest that real investment opportunities are shimmering on the sands.
1. Since the global financial crisis, Egypt has suffered a difficult decade characterised by political instability and economic turmoil. However, President Abdel Fattah el-Sisi’s recent re-election should help to provide ongoing stability
2. Intervention by the International Monetary Fund in 2017, which resulted in a dramatic devaluation of the Egyptian pound, seems to have set the country on the road to economic recovery, with both debt and inflation being brought under control
3. A range of underlying factors, including energy self-sufficiency– thanks to recently discovered natural gas resources – a youthful demographic and extremely low labour costs, point to a positive future, if stability continues