Egypt fundamentals set to attract more investors
Sachin Kerur, head of Middle East at law firm Pinsent Masons evaluates Egypt's economy and construction sector
The fundamentals of Egypt's economy will continue to attract investment from regional and international parties, with the country's prime location in the Middle East and Africa region expected to accelerate interest within the business community.
“There is a lot of liquidity around Egypt which is pent up, but hasn’t gone anywhere in a while,” Sachin Kerur, head of Middle East operations for law firm Pinsent Masons told Construction Week.
“Tapping into it through local subsidiaries like Emaar is doing allows companies access to the huge opportunities in the country. This is a good time to build the brand for your firm given the country’s fundamentals.”
Kerur stated Egypt’s mid- and long-term fundamentals will be of interest to investors not just from neighbouring countries, but also around the world.
“Egypt’s fundamentals have been well chronicled over time. The country has a massive population and acts as a transport hub through the Suez Canal. With the Canal, it can play into major areas in both, the Middle East and Africa. These factors are extremely important when considering the country’s scope for growth, and these fundamentals will accelerate investment into Egypt,” he explained.
“If you look at the turnout for Future Economic Development Conference that was held in Sharm El Sheikh between 13 and 15 March, 2015, you’ll find it was attended by investors from both, within and outside the region. I would anticipate that if calmness in the country’s political landscape continues, investment will come from the Middle East, as well as other world powers.
“I’d be surprised if no international investors came to Egypt,” Kerur added.
Kerur offered words of advise for first-time investors to Egypt, remarking on the challenges companies might face while dealing with local authorities and supply chains.
"For someone who’s never been to Egypt, you surely have to go in knowing what the situation in the country is like. You need a strong partner since there are challenges on-ground which should not be ignored. You have to be extremely committed to the market, and accept that there will be a few bumps on the road. You may not be the best from your first day in the country, but you have to give it time and work with patience," he said. "For instance, some companies perform exceptionally as soon as they set up office in, say, the UAE, but you must remember that Egypt’s is a different landscape altogether.
"The supply chains in Egypt can be tricky. They may not be as robust and long like you have in some other parts of the world. Contractors and other construction firms working in the country need to be prepared for such scenarios."
Focus on human resource development will be key, Kerur added, suggesting companies tap into Egyptian diaspora to scan for workers who can offer international expertise along with a sense of familiarity with the country's market.