Egypt and Qatar.. Potential investments in promising economic sectors

The visit of the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, to Egypt, and his meeting with Egyptian President Abdel Fattah Al-Sisi; A new stage in the relations between the two countries, which is headed by several files, foremost of which is the economic file.

Cairo-

The visit of the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, to Egypt, and his meeting with Egyptian President Abdel Fattah Al-Sisi;

A new stage in the relations between the two countries, which is headed by several files, foremost of which is the economic file.

Talks at the Federal Palace in Cairo last Saturday dealt with ways to develop relations between the two countries, especially in the fields of investment, energy, defense, culture and sports, according to the Qatar News Agency.

The Egyptian (governmental) newspaper Al-Ahram considered that the visit of the Emir of Qatar to Egypt establishes a new stage, noting that it is the first in seven years in which bilateral relations witnessed a phase of stagnation, and the second for him after his participation in the work of the Arab summit in Sharm El-Sheikh in 2015.

According to the statement of the official spokesman for the Presidency of the Republic, Ambassador Bassam Rady, it was agreed to develop bilateral cooperation in various fields, especially in the energy and agricultural sectors, in addition to investment cooperation and revitalizing the movement of trade exchange, with regard to enhancing the flow of all Qatari investments to Egypt.

Qatar is a major investor in Egypt in all sectors, according to statements by the State of Qatar's ambassador to Cairo, Salem bin Mubarak Al Shafi, to the Egyptian Middle East News Agency (official).

Economic experts and analysts believe that there is no better time than this to start pumping Qatari investments into the Egyptian market through many promising sectors in the country, especially with the Egyptian economy in need of more serious investments, in light of the global inflation wave and the negative economic repercussions of the Russian war in Ukraine.

A visit that included discussions to maximize Qatari investments in Egypt.. The Emir of the State of Qatar, Sheikh Tamim bin Hamad Al Thani, leaves Cairo after President Sisi received him at the Federal Palace pic.twitter.com/TPqxMUnyTu

- Al Jazeera Egypt (@AJA_Egypt) June 26, 2022

What is the importance of the visit?

This visit, which culminates in efforts that lasted for more than a year, to restore relations between the two countries to their normal course, acquires a special importance and an important timing.

It comes at a time when the economic situation in Egypt is witnessing a state of instability this year as a result of the repercussions of the Russian-Ukrainian war and the Corona virus pandemic.

The prices of food and energy commodities rose sharply globally in conjunction with the exit of more than 90% of foreign investments in debt instruments in Egypt during the past months, and the United States following a strict monetary policy to confront the worst inflation wave in the country in decades, according to Egyptian Finance Minister Mohamed Maait.

Countdown to the return of relationships

The beginning was on January 5, 2021, with the issuance of a statement on the 41st Gulf Summit in the city of Al-Ula (northwest of Saudi Arabia), announcing the end of a severe crisis that erupted in mid-2017 between Qatar on the one hand and Saudi Arabia, the UAE, Bahrain and Egypt on the other.

On June 23 of the same year, Egypt decided to appoint Amr El-Sherbiny as Ambassador Extraordinary and Plenipotentiary to Qatar, followed about a month later by a decision from Doha to appoint Salem bin Mubarak Al Shafi as Ambassador Extraordinary and Plenipotentiary to Cairo.

The marathon meetings between Egypt and Qatar resulted in an agreement - at the end of last March - on a set of investments and partnerships in Egypt totaling $5 billion in the coming period, according to a statement by the Egyptian Cabinet Presidency.

The statement did not specify the areas in which these investments would be pumped or when the deals would be concluded, but Egyptian Planning Minister Hala Al-Saeed told Bloomberg that the Qatari sovereign wealth fund would acquire assets.

This was agreed with by the economist Ali Al-Idrisi, who said - in press statements - that (Qatari) investments will be directed towards assets, and will result in an increase in production and contribute to increasing the growth of economic rates.

In parallel, Qatar Energy Company announced - in a statement - the conclusion of an agreement to acquire a 40% stake in an exploration area owned by the American company ExxonMobil, in the North Marrakia offshore concession area in the Mediterranean.

Last December, Qatar Energy entered - for the first time - into the oil and gas exploration sector in Egypt, by acquiring a 17% stake in two oil and gas exploration blocks managed by Shell in the Red Sea.

I had the pleasure of visiting the sisterly Arab Republic of Egypt and meeting my brother, His Excellency the President @AlsisiOfficial in Cairo, where we discussed ways to consolidate our bilateral cooperation in various fields.

pic.twitter.com/T5Z9WV7gOZ

— Tamim Bin Hamad (@TamimBinHamad) June 25, 2022

Transfers of citizens between Egypt and Qatar

Remittances from Egyptians abroad are one of the country's most important dollar resources. The value of their remittances from Qatar recorded $1.34 billion during the 2019-2020 fiscal year, compared to $1.29 billion during the 2018-2019 fiscal year.

While the value of Qatari remittances working in Egypt amounted to $2.8 million during the fiscal year 2019-2020, compared to $4.9 million during the fiscal year 2018-2019, a decrease of 43.5%.

Investments never stopped

Despite the stalemate in political relations between the two countries since July 2013, Qatar's investments in Egypt have developed in recent years, and the last announced number of investments in the first quarter of the current fiscal year amounted to $121.8 million, according to data from the Central Bank of Egypt.

Qatari investments in Egypt have increased significantly over the past two years compared to previous years.

It amounted to $507.9 million in 2020-2021, and $678.3 million in 2019-2020, compared to about $373.2 million in 2018-2019, about $165 million in 2017-2018, and about $169.4 million in 2016-2017.

Qatari investments in Egypt vary - according to local newspapers and websites - between banks and real estate.

Qatar National Bank (QNB) and Al Diar Real Estate Company are the most prominent investments in these two sectors, in addition to the contribution of Qatar Energy Company through the Arab Refining Company with investments in the Egyptian Refining Company project.

According to press statements by the economic expert and head of the Egyptian Center for Political and Social Studies, Adel Amer, Qatar's investments accounted for a third of the Gulf countries' investments in Egypt, in previous periods, through architecture, oil and natural gas projects and its participation in agricultural projects.

Egyptian diplomats and experts to Qena: HH the Amir's visit to Egypt has a positive impact on joint Arab action.# Qena https://t.co/Op9j1ZSmyt https://t.co/VjzhD21X4Q pic.twitter.com/RHAu76lrDw

— Qatar News Agency (@QatarNewsAgency) June 25, 2022

big investment gate

The door is now wide open to increasing trade exchange between the two countries, especially with the low values of this exchange. The trade exchange between the two countries recorded $44.8 million in 2021, compared to $25.4 million in 2020, an increase of 76.4%.

The value of Egyptian exports to Qatar amounted to 4.5 million dollars during 2021, and the value of Egyptian imports from Qatar reached 40.3 million dollars during 2021, according to data from the Central Agency for Public Mobilization and Statistics.

Economist Mamdouh Al-Wali believes that "Qatar will move towards acquiring some assets in Egypt that the Egyptian administration wants to sell, with the new government's tendency to replace the Gulf deposits it obtained into investments."

Speaking to Al-Jazeera Net, Al-Wali added that the relations between the two countries took a strong boost with the exchange of visits between officials of the two countries at the highest level in recent months, and the announcement of investments and partnerships of $ 5 billion, which culminated in the visit of the Emir of Qatar to Cairo, marking the beginning of a new phase entitled investment and trade exchange. .

Qatar investment arm

Last week, Egyptian Finance Minister Mohamed Maait visited Doha and participated in the Qatar Economic Forum under the slogan "Achieving equality in the global economic recovery equation." During the forum, the minister reviewed investment opportunities in Egypt.

Maait stressed that his country is looking forward to increasing Gulf investments - including Qatari ones - while transforming Gulf deposits into real investments that benefit from the promising development opportunities available in various fields and the business-stimulating climate.

And in the middle of this month, Sisi said - during his dialogue with a number of media professionals in Sadat City (north of Cairo) - that his country is trying to make these (Gulf) deposits investments, and we have many projects, as Egypt has 100 million and many opportunities, whether as a joint investment or a single one.

The Egyptian Minister of Finance revealed that the new “state ownership policy” document aims to increase the participation of the private sector in public investments from 30 to 65% in the next three years, noting that the government plans to exit from 79 sectors, reduce its investments in 45 other sectors, and attract $40 billion in investment over the next four years.

His Highness the Amir leaves Cairo for Oran at the invitation of the Algerian President to attend the opening ceremony of the 19th Mediterranean Games 2022.# Qena https://t.co/S3C0X7Rkb0 pic.twitter.com/6T5wLyTiTv