Seif El-Nasr, projects of the Suez Canal development axis alone are able to push the Egyptian economy to grow strongly in the coming period. He added that the bank, as an Arab investment bank, is working to help regional investors to enter the Egyptian market. It is also negotiating with Emirati and Saudi investors to support them when they decide to invest in Egypt.

 

What is your vision for the future of the Egyptian economy?
Egypt has great potential and is characterized by the diversity of its resources and activities. It has its wealth of agriculture, industry, mining, energy, and tourism. In addition, it also has a great geographical position and a promising market. Egypt can jump and grow to restore its political and economic stability, as well as security, in a short period. Egypt now subcontracts major projects to domestic and foreign investment next to the small- and medium-sized enterprises (SMEs) that are able to alleviate unemployment and increase production rates and domestic savings. They can also help Egypt reduce imports and increase exports. It is no secret that Central Bank of Egypt’s (CBE) independence helped to protect the Egyptian economy. It played its role and took charge of responsibilities assigned to it. The CBE’s monetary policy was tuned to match the state’s fiscal policy. It also had a supervisory role as well as backing and supporting the banking system. Banks too played their role creating an attractive investment climate for local and foreign investors.

 

In your opinion, what is required to give more support to the economy in the coming period?
It is very important for Egypt to finish its last step on the political roadmap, which is the parliamentary election. This way, Egypt will have a parliament that can play its role in the enactment of laws necessary to move the economy and the management of state affairs and legislation. If Egypt came out of the “bottleneck” in 2015, it will help it to move forward very quickly. There is no doubt that politics reflects on economy, but it is certain that the economy is driving politics and stir them. What happened in the Arab region of repercussions and difficulties under the name of “Arab Spring” was due to poverty and absence of social justice.

 

What are the projects that can move the economy forward and help it grow?
There are six projects that are capable of helping Egypt during the coming period, and place it among the most important economies in the world. Most important of these projects is the Suez Canal Development, the construction of 3,200 km of roads, farming 4m acres, the development of the North West Coast region and the development of the Golden Triangle in Egypt’s mining governorates, in addition to the project to establish a logistics area to store grains in Damietta. The importance of the Suez Canal is not limited to being a waterway, but it puts Egypt on the world map and creates more projects that can achieve the desired levels of investment for economic growth. The Suez Canal has thousands of SMEs, at which youth should be allowed to work. A large project such as shipping can involve on-site small projects such as refrigerators, loading and transport and other small projects that can employ thousands of the workforces and create real development. They can also be integrated with medium and large projects as well as mega projects, which will lead to real development.

 

What role can banks play to serve the economy?
Banks were able to meet the requirements of their customers as financiers, participants, and contributors to various projects. It is noted that we have not seen any shortfall in goods and basic needs required of society at any time. Moreover, they did help their customers and clients in hard times. They are ready to enter all kinds of projects, whether large or small to meet society needs through the CBE’s initiatives, such as the Mortgage Finance Initiative and supporting the tourism sector and the development of SMEs, among others.

 

What about the role of the Arab Investment Bank in financing major projects conducted by the State, including the Suez Canal hub development?
The bank’s size prevents it from financing major projects alone, but it could participate in these projects through syndicated loans or by financing small projects included within the Suez Canal hub. The bank is ready to participate in a number of the Suez Canal projects that will be put forward. It is currently considering a number of these projects in preparation for its funding, including the franchise projects that work in fields of logistics, transport, navigation and distribution with the aim of serving different projects of the Suez Canal hub. The bank, as a major Arab bank, can attract many regional clients as depositors as well as investors. The bank also tries to help Arab investors to enter the Egyptian market and help Egyptian investors to enter Arab markets. There are negotiations conducted by the bank with Emirati and Saudi investors, so that it can support them when they invest in any Egyptian projects. The bank can help as a shareholder or by funding these projects – depending on the circumstances.

 

What is behind the bank’s great interest in financing small projects?
Small enterprises are of the best projects for banks aiming to grow rapidly. Their risks are limited compared to major projects. All obstacles facing these projects must be eliminated and all government bodies – and banks – should work to support them. The bank has established a special sector to finance these projects. It has launched a new system called [partners] that processes and prepares such projects. It also guarantees marketing of their products, so that owners of these projects can focus only on work. The size of the small- and medium-size projects portfolio at the bank amounts to EGP 500m. The bank aims to increase this size to EGP 1bn over the next period.

 

An agreement was signed with the Social Fund for Development (SFD), through which the bank received an initial funding of EGP 80m brought to the SMEs. The bank’s management has been keen to develop information systems and buying the best technological applications and systems in the market like the “t24” of the international Temenos Group. This is expected to push the bank further to meets the needs of its clients, as well as connecting all the bank’s branches to each other. It will also help the bank embark retail banking services and to strongly engage in the financing of SMEs. The bank could not have started providing such services without developing infrastructure, improving it, and supporting it with the best technological systems

 

July 2016