Egypt’s Macro Environment will Create $500 Million in New Investment Opportunities in Two Key Sectors

Currency devaluations and inflation erode investment returns, reducing a company’s valuation and the value of its total addressable market (TAM). However, several sectors have demonstrated resilience in such conditions and can actually generate substantial shareholder value in difficult economic times. A major example is Egypt which suffers from an inherent current account deficit and imports most basic commodities, including food. In markets like this, currency devaluations result in nearly a 1:1 inflation pass-through to customers.

Non-bank lending and payments offer the best investment opportunities in Egypt’s current macro environment. We estimate that there will be at least $500m in transaction value amongst companies in the non-bank lending and payments sectors in 2023, which investors can potentially capitalise on. Moreover, there is financial and strategic investment appetite in those two sectors, as demonstrated by various successful exits, enabling investors to eventually realise significant profits.