Net inflows of foreign direct investment (FDI) into Egypt surged to a historic high of $46.1 billion in FY2023-2024, up from $10 billion in the previous financial year.
The Central Bank of Egypt‘s (CBE) latest report revealed that net FDI inflows into the non-oil sector rose to $46.4 billion following the $35 billion Ras-El Hekma deal. Meanwhile, FDI inflows into Egypt’s oil sector rose to $5.7 billion from $ 5.6 billion in the previous financial year.
The central bank also revealed that transfers abroad declined to $6 billion in FY2023-2024 from $6.6 billion in the previous year. The report also noted an improvement in net outflows to $351.6 million compared to $982.5 million in FY2022-2023.
Portfolio investment in Egypt registered a net inflow of $14.5 billion, up from $3.8 billion. The central bank attributed this surge to the strong appetite of foreign investors amid the recovery of the Egyptian economy, particularly after March 6, 2024.
Banking sector’s position
Foreign assets across Egypt’s banking sector registered a net outflow of $18.4 billion and a net inflow of $1.4 billion, marking an increase in assets that further strengthened banks’ financial position. The change in banks’ liabilities posted a net outflow of $2 billion and a net inflow of $3.7 billion in the previous financial year.
Meanwhile, the change in the CBE’s liabilities recorded a net outflow of $7.8 billion, and a net inflow of $ 2.9 billion.
Suez Canal revenues decline
Revenues from the Suez Canal declined by 24.3 percent to $6.6 billion from $8.8 billion in the previous year. The central bank attributed this plunge to a decline in both the net tonnage by 29.6 percent to 1.1 billion tons and the number of transiting vessels by 22.2 percent.
Investment income deficit widens
The investment income deficit in Egypt rose 1.3 percent to $17.5 billion from $17.3 billion, primarily due to the decline in the investment income receipts by 9.7 percent to $1.9 billion. Meanwhile, investment income payments stabilized at $19.5 billion.
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Remittances dip
The report also revealed that remittances to Egypt slightly retreated by 0.6 percent to $21.9 billion from $ 22.1 billion. Notably, Egyptian workers’ remittances surged during Q4 of FY 2023-2024 (April to June 2024) by 61.4 percent $7.5 billion.
Tourism revenues grow
Egypt’s central bank also noted that the rise in the current account deficit was mitigated by the increase in tourism revenues by 5.5 percent to $14.4 billion due to the pickup in the number of both tourist nights by 5.5 percent to 154.1 million nights and tourist arrivals by 7.4 percent to 14.9 million tourists.
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