Net foreign direct investment inflows increased by 28.5 percent in the last quarter of 2013, according to the Central Bank of Egypt (CBE), state news agency MENA reported Tuesday.
The investment ministry also released figures that indicated investment was on the rise. Inflows increased by US$356.3 million to reach $1.6 billion, the Central Bank added.
The head of the General Authority for Investment and Free Zones said that the first half of the 2013/2014 financial year saw 2.8 billion in investments, versus three billion in 2012/2013.
Tourism and energy have historically been Egypt’s biggest investment draws, although security concerns have kept many tourists away. Energy investment might improve however, with BP eyeing a 1.5 billion deal in Egypt, MENA also reported.
In 2011, immediately following the mass uprising that overthrew former President Hosni Mubarak, FDI was a net outflow of $482 million, according to the World Bank. The previous year $6.4 billion was invested in Egypt. In 2012, FDI rebounded to a net inflow of $2.8 billion.
The European Union was the main investor in Egypt, amounting to 1.68 billion — 1.2 billion of which was from the United Kingdom. Belgium, the Netherlands and the United States were among other top investors.
Egypt is in deep need of investment if it wants to grow its economy. Local investment is costly for local firms due to high interest rates, but inflation also poses another barrier to lowering interest rates. Inflation measured 9.82 percent in April 2014, according to the CBE, and lower interest rates could whittle away at already small pay-checks across Egypt.