Egypt's new fiscal year plan asks the private sector to supply nearly 60% of total investment for the first time — yet the private sector just posted its sharpest contraction in three and a half years, and S&P Dow Jones Indices is consulting on whether Egyptian equities still belong in the emerging market universe at all. Joining us now is Nadim Samna, Managing Partner of Stratexis, a strategy advisor who has spent two decades helping capital find its way into this market. Nadim, welcome to the show.
Welcome. Thank you for having me.
You sit between international investors and the Egyptian market every day. When a serious investor walks away from an Egypt deal right now, what is the actual reason they give you in private? Is it different from what gets said publicly?
There is not much of a gap between what is said publicly and privately. We know the reasons. The geopolitical events created some pressure on the Egyptian pound, and deals denominated in US dollars felt that uncertainty. So investors wait — they don't walk away from Egypt as an investment destination, they wait. And what we're witnessing now is the return of those investors, signing deals with the government. Why? Because Egypt showed resilience. The pound moved up a little, then came back down. The government is delivering on its commitments. That single policy tool has done more to rebuild investor trust than anything else.
S&P Dow Jones is consulting on demoting Egypt from emerging market to frontier status, with the consultation closing July 31st. FTSE also has Egypt on watch. How much should investors read into that signal?
Personally, I think a move to frontier status would be a mistake — and it's a loss for the indices themselves, not just for Egypt. The market is up 25 to 27% year to date. Last year, the EGX 30 gained roughly 40% and the small cap EGX 70 gained nearly 65%. Valuations today are still around 8x earnings — a significant discount compared to regional peers, where the average P/E is around 21x. If Egypt simply re-rates to match those multiples, the market value would double or even triple. As for what Egypt needs to demonstrate — the authorities have already moved. They scrapped capital gains tax entirely and replaced it with a simple flat stamp duty. That predictability alone brought investors back. Derivatives and futures on indices and key stocks are now available. The government has pre-listed ten companies ahead of full IPOs. The long-awaited IPO of Banque Misr is expected by year end. Mutual fund deposits have surged 30%, which means retail investors are back in the market. All of this is real progress for S&P and FTSE to weigh before any decisions.
The government is asking the private sector to carry 60% of the fiscal year 2026-27 investment plan. Yet June's PMI showed the sharpest private sector contraction since early 2023. How do you reconcile that?
I wouldn't read too much into one month's PMI. Much of June's contraction traces back to the external shock — the spillover from the Iran conflict disrupted shipping and pushed up fuel and input costs across the whole region, not just Egypt. It is not evidence of a structural collapse in private sector confidence. On the investment target itself, having the private sector carry roughly 60% of next year's plan — with the government aiming to push that to 65% by the end of the decade — is actually a strong and ambitious signal. It means private capital is already set to outpace public investment, which is quite rare for an emerging economy, and particularly rare in this region.
You've argued that Egypt should treat the World Bank's Be Ready framework as a working reform scorecard. Across its three pillars — regulation, public services, and operational efficiency — where does Egypt score worst in the eyes of investors?
Egypt currently isn't scored in the report — I believe that reflects a deliberate choice by the government to opt out until the underlying indicators improve rather than publish a weak baseline. That said, I've seen genuine progress across all three pillars over the past few years. Digital transformation of public services is real. If I had to identify the weakest pillar, it would be operational efficiency — the gap between rules on paper and how they are actually implemented on the ground. But that's not unique to Egypt. It's the same pattern the World Bank sees across almost every emerging market. Regulations tend to move faster than the machinery that executes them.
Investors consistently cite four discounts on Egyptian assets: FX access, regulatory predictability, competition with state-owned entities, and the ability to exit. If you could fix only one before the next budget year, which moves the most capital?
Exit. That's my focus. FX access has genuinely improved — we've discussed that. Competition with state-owned entities is something my clients barely raise anymore, especially with so many state assets now up for sale. If a client acquires a state-owned entity, the competition disappears. On regulatory predictability, the government has been transparent and is largely delivering, particularly on tax reforms. What's left, and the hardest to solve, is exit. Market liquidity is still building. Negotiations simply take too long. If Egypt can fix this, it will unlock most of the capital, because all investors need to secure their exit before their entry.
The state stake requirement in mining has dropped from 25% to 10%, rents are down sharply, and a new bid round is in play. Is that enough to bring global exploration capital into the Eastern Desert, or is Egypt still competing against jurisdictions with better geological data and faster decisions?
These reforms are real. Cutting the state's mandatory stake from 25% to 10%, slashing rents by up to 60%, pushing license approval down to 30 days — this is a genuine competitive shift. Among my clients, which include mining names from Canada, Australia, and South Africa, there is real appetite to come to Egypt. There may have been difficult experiences in the past, but they feel today is the most favourable window and they want to move now. On geological data specifically, Egypt just launched its first nationwide geophysical survey, which directly targets the data gap that has historically put it behind competing jurisdictions. Yes, it is enough to move capital — but the government still needs to keep pace on execution. Once the data is ready, it has to go out and be used.
That's a cautiously positive note to end on. Thank you very much, Nadim.
Thank you. Thank you very much.
