In an emphatic validation of its robust economic reforms, Egypt notably secured its position as a leader in the Arab world concerning the surge in foreign investments during the first quarter of 2023. Such a fiscal blossoming emanates notably from a decade of bold economic restructuring, particularly the monetary policy reform that witnessed the liberation of exchange rates, thereby magnetizing foreign portfolio investments exceeding $30 billion since its implementation.
Underscoring the allure of Egypt’s financial investments to global stakeholders, foreign portfolio investment flows manifested a varied trajectory over the years, culminating in a staggering 72% spike in 2023. This was bolstered by the facilitative measures extended by the nation, consequent to 22 decisions from the Supreme Investment Council, aligning with the global investment milieu, shaping a new dawn in Egypt’s economic landscape.
The augmentation in investment flows was substantiated by an increase in the volume of Foreign Direct Investment (FDI) in Egypt during 2022, scaling to $8.9 billion compared to $5.2 billion in 2021. In the first quarter of 2023 alone, the net FDI inflows into Egypt ascended to approximately $3.3 billion, positioning Egypt atop North African nations in the FDI inflow index and first amongst Arab countries in terms of foreign investment growth.
Such fiscal dynamism was significantly influenced by the monetary reform decision, contributing to achieving a payment balance surplus exceeding $26 billion during 2016/2017 and 2017/2018. Despite witnessing some fluctuations in subsequent years, partly due to global influences such as trade wars and the COVID-19 pandemic, the balance of payments achieved a surplus of $1.86 billion in the fiscal year 2020/2021.
As of September 2022, Egypt’s balance of payments registered an overall surplus of $523.5 million, propelled by escalated tourism revenues, peaceful petroleum and non-petroleum export proceeds, along with mounting revenues from the Suez Canal and a rise in the net inward flow of FDI in Egypt.
These fiscal advancements reflected palpably on net international reserves, which experienced historical peaks in December 2018, valued at $45.55 billion, albeit retracting to $33.53 billion by November 2022 due to global impacts. However, a resurgence was observed by August 2023, escalating to $34.9 billion.
Egypt’s economic horizon glimmers with promising prospects as foreign investors increasingly find lucrative avenues within its borders, a testament to the nation's thriving economic strategies and robust investment climate.