Egypt’s floating pound already a success, billionaire Sawiris says

February 23, 2017 10:30 am

A woman walks past a currency exchange bureau advertisement showing images of the U.S dollar and other currencies in Cairo, Egypt. (Image: Reuters)

* Billionaire says Egyptian pound float to unlock investment

* Says tourism’s woes about politics, not security

* State competing with, driving out private sector -Sawiris

* Says businessmen should stay out of politics

Egypt’s decision to float its currency can already be declared a success, but it will take time for investment flows to return and revive its battered economy, the Egyptian construction tycoon Samih Sawiris said.

The central bank floated the Egyptian pound in November to attract foreign capital, and the pound consequently weakened from 8.8 pounds to the U.S. dollar to roughly 20 pounds in December.

“Now the investment appetite has become bigger … people will start looking at the various opportunities given to them,” Sawiris said.

Egypt needs investment from people like Sawiris, a billionaire who could commit millions and help to mobilise foreign investors. However, he’ll be careful about putting up his own money.

“We should not be over-enthusiastic or over-emotional … “, he said. “You don’t realise that there is a proper economy and ways to measure it in the morning and start investing in the afternoon.”

A member of Egypt’s richest family, Sawiris is chairman of Orascom Development Holding, which operates tourist resorts and real estate projects in Egypt and Europe.

Orascom Development is dual-listed on the Swiss and Egyptian stock exchanges. It operates a total of 35 hotels with over 8,000 rooms and controls land of around 100 million square metres, the vast majority of which is unused.

But more than six years of political turmoil since the ouster of Hosni Mubarak in 2011 have scared off investors and tourists. A major blow came in 2015 when Islamic State brought down a Russian airliner over the Sinai Peninsula, killing all 224 people on board.

Russia suspended all flights to Egypt and is yet to restore them. Britain and Germany suspended flights to specific tourist destinations and resorts.

Because of the bans, only half the 3,000 rooms in Sawiris’s Taba Heights resort are open for guests. The only way to restore tourism is marketing, Sawiris said, both by the government and private companies like his.

“In the tourism sector, confidence is all about marketing,” he said. “We just need to spend a lot more trying to annihilate this bad image that was forcibly spread.”

‘MADE A LOT OF MONEY’

Sawiris’s family controls the sprawling Orascom corporate empire founded by his father, Onsi. His brothers, Nassef and Naguib, are chief executive and chairman of Orascom Construction Industries and Orascom Telecom, respectively.

Unlike Naguib, who founded a political party that holds the second-largest bloc of seats in parliament and until recently owned a television network, Samih prefers to keep his public engagement apolitical. He sponsors a literature prize and funds university scholarships for Egyptians studying abroad.

“We made a lot of money in this country over the years, and we owe it to the people to give back some of it because, to be very blunt and very honest, we paid very little taxes because of the huge tax incentives that were given to investors.”

He says mixing money and politics is unfair and does not allow for a level playing field. Businesspeople should focus on their jobs, he said, and if they have the time and money should focus on social responsibilities, not politics.

Orascom Development built two low-income housing projects in Cairo and the upper Egyptian city of Qena in 2007 and 2010. Sawiris says the government then encouraged, and sometimes forced, developers to undertake such projects, a policy he agrees with.

In contrast, the current government is taking low-income housing into its own hands, driving away the private sector, a move Sawiris warns against.

“Once the government goes into the market, everybody leaves the market because the government doesn’t make money, they spend money,” he said. “I believe governments should be regulators, not competitors. It’s quite sad.”

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Reuters
By Reuters
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