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MENAFN: Informal economy wastes billions of pounds: EBA secretary general

Allouba: the government should review the Investment Law, so as to unify the entities that can issue land approvals and project licences.
26.09.16 | Interesting article at MENAFN

mr Allouba, secretary general of the Egyptian Businessmen Association (EBA) and chairperson of the board of Engineering Consultants Group (ECG), said that Egypt's economic situation is critical due to the high budget deficit. It requires immediate actions to amend the economic situation and adjust the investment climate to attract more investors.
Allouba added that the state's expenses continue to increase without real development in revenues, which is evident in the worsening budget deficit estimated at EGP 300bn, even after cutting the allocations for energy and electricity subsidies. There are still fixed pillars in the state budget, such as the wages of nearly six million employees, estimated at EGP 200bn per year. This requires a review of the structure of state employment.

He continued that the gross public debt has reached EGP 2.37bn by the end of 2015, nearly 100% of GDP. However, there are other economies in which debt reached significant levels and that this functions well regardless, such as Great Britain, whose debt equals four times its GDP.

Allouba pointed out that the government procedures for the issuance of licences are still slow, affecting the investment climate. In addition, there are several exchange rates for the US dollar in the market, and this situation prompts the state to increase government investment to compensate the low foreign direct investment estimated at 6bn annually, while the government had targeted foreign investments of about 10bn.

He continued that the state should adjust the investment climate, noting that investors are waiting for more improvement and a unified exchange rate, which would allow them to set up their investment plans.