Tuesday,24 October, 2017
Current issue | Issue 1292, (21 - 27 April 2016)
Tuesday,24 October, 2017
Issue 1292, (21 - 27 April 2016)

Ahram Weekly

More German business

Germans are seeking more investment in Egypt, reports Ahmed Kotb

Al-Ahram Weekly

Six memoranda of understanding (MOUs) were signed on Monday during the third session of the Egyptian-German Joint Economic Committee held in Cairo.

Egyptian and German companies signed the MOUs to do business in several fields, mainly oil and gas, plus renewable energy, education and chemicals production.

“Interest shown by the German business sector in the Egyptian market indicates a will to support the development of Egypt’s economy,” said Sigmar Gabriel, Germany’s vice chancellor and federal minister of economic affairs and energy. However, Gabriel added, Egypt still has carry out more reforms and restructure its economic sector.

Gabriel told a press conference on Monday that about 100 German investors and businessmen met with their Egyptian counterparts at the Egyptian-German committee meetings and discussed economic matters related to both countries.

On the business environment in Egypt, Gabriel said German companies operating in Egypt complain about slow bureaucratic procedures and access to their financial dues, adding that this needs to be solved in order for German companies to do business in the Egyptian market without any obstacles. The Egyptian-German committee will take part in solving these issues during the weeks and months ahead, he said.

“Bilateral trade between Egypt and Germany is growing fast and exceeded five billion euros in 2015, compared to about 4.4 billion euros in 2014,” Tarek Qabil, Egypt’s minister of industry and trade, said. Qabil said German investments in Egypt are currently estimated at around 600 million euros and he expects this to increase in the near future.

German exports to Egypt increased in 2015 by 25.15 per cent compared to the previous year, reaching about 3.4 billion euros, according to Egypt’s State Information Service. Egyptian exports to Germany also increased by 13.63 per cent, reaching approximately 1.7 billion euros.

Germany is one of Egypt’s main suppliers of industrial and technological goods, while Egyptian exports to Germany are mainly agricultural goods. There are 935 German companies operating in Egypt, investing about 2.5 billion euros in the Egyptian market.

Gabriel also stressed that protecting human rights and freedom of expression were essential in supporting Egypt’s democratic and economic development. “This is also important for investors to feel safe about their businesses, because human rights violations harm Egypt’s image abroad and reflect negatively on its economy,” the vice chancellor said.

Regarding tourism in Egypt, Gabriel said that the German Foreign Ministry had not issued a travel warning against visiting Egypt, and that this will be reflected in an expected increase in the number of German tourists coming to Egypt.

Ulrich Hermann, president of the German Arab Chamber of Industry and Commerce, highlighted the challenges facing the Egyptian tourism sector, especially after the United Kingdom and Russia issued travel warnings to their citizens following the downing of a Russian passenger plane in Sharm El-Sheikh last year.

“Egypt is still a safe country, and safety should not be an issue to not come to this country,” Hermann stressed. Hermann predicted that the situation in the Egyptian tourism sector will not change in the next few months but that “things are going to be better by November”.

Siegfried Russwurm, chairman of the North Africa and Middle East Initiative of German Business, said the German business community is taking part in Egypt’s development of its infrastructure, which is key to economic success. This includes energy, transport and health care, among other sectors whose infrastructures are being developed.

“We are committed to the strategic partnership with Egypt but the country needs to work more on making its business environment more competitive on a regional as well as a global scale,” Russwurm said. “Egypt is facing tough regional competition with regard to doing business.”

Qabil said the Egyptian government has been working to improve its investment environment to make Egypt an attractive location for investors and whoever wants to do business and have access to a huge number of markets and consumers in the region.

Heading another delegation of German businessmen to Egypt last week, Franz Josef Pschierer, minister of energy for the state of Bavaria, stressed the importance of facilitating procedures of investing in Egypt, especially for small and medium enterprises, and to activate the one-stop shop system which would attract more investors.

During Pschierer’s visit, three MOUs were signed between Egyptian and German businessmen under which three projects worth 80 million euros will be set up. The projects include establishing a centre for technical and vocational education in Cairo, a factory for manufacturing food and beverages and pharmaceutical products, and a plan to use new agricultural technologies that will save from 70 to 80 per cent of water used in irrigating crops.

The business community in Egypt suffered greatly following the 2011 Revolution but still managed to contribute to the development of Egypt, according to Ahmed Al-Wakil, head of the Federation of Egyptian Chambers of Commerce.

Al-Wakil said that Germany is Egypt’s main European Union partner. “We are interested in increasing bilateral trade, especially since opportunities for the German business community are great, by providing it with access to markets in Africa and the Middle East through Egypt’s free trade agreements with other countries.”

Al-Wakil said the location of Egypt can be capitalised on to make the country a logistics and business hub with access to about 1.6 billion consumers in African and Middle Eastern markets through current trade agreements. He said this is now easier to do following the opening of the new Suez Canal.

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