Foreign Investments Worth $5 Billion Flee Egypt, Says Central Bank

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VENTURES AFRICA – During the last six months, Egypt lost a total of $5 billion in foreign investments, the Central Bank of Egypt said late on Wednesday.

It also said the country’s direct foreign investments (DFI) declined by 94.1 percent, or $1.75 billion, in the first quarter of the current fiscal year.

The total investments in the country in that period had amounted to $2.25 billion, compared with $2.14 billion that left the country.

European Union (EU) investments sagged significantly compared with the quarter before and decreased from $4.2 billion to $1.76 billion — an amount equivalent to 72.2 percent.

The World Bank warned that delaying or halting aid to Egypt would have serious ramifications on the balance of payments, due to low levels of cash reserves.

The Central Bank has spent more than $20 billion in foreign reserves to support the local currency since a popular uprising toppled Hosni Mubarak in early 2011 as turmoil has chased away tourists and foreign investors.

Reserves fell by $448 million in November to $15.04 billion, enough to cover barely three months of imports, and bankers said the rush to buy dollars was certain to have drained foreign reserves even further in December.

Meanwhile, the Islamic Development Bank (IDB) President, Ahmed Muhammad Ali, signed a number of loan agreements worth more than $388 million with Egyptian officials, it was announced on Thursday.

IDB will give $250 million to finance a 1.950-megawatt electricity station in the country’s south.

The new power plant will eventually be linked to Egypt’s national electricity grid with additional stations to be constructed soon. Egypt received an initial $200 million loan for the project from the IDB last summer.

IDB will also give $50 million to support small and medium enterprises in the country and $32.3 million to finance a national agricultural development program.

The bank signed a $31 million deal to finance a medical college hospital at Al-Azhar University and a $25 million loan deal to support a youth training program.