Khaled Nosseir – Chairman, British Egyptian Business Association (BEBA), Egypt
The chairman of the British Egyptian Business Association (BEBA) highlights the organization’s key role in facilitating the growth of British-Egyptian business relations. He also speaks to the promising fundamentals inherent in Egypt’s economy, while pinpointing the most salient challenges such as bureaucracy and red tape currently impacting the ease of its member companies doing business in Egypt.
Can you briefly provide an overview of BEBA’s presence in Egypt, as well as the scope of its functions and services?
“Egypt is a massive market with a well-diversified and growing economy. Despite the political situation and the big crash in 2008, we’ve still been growing.”
This year, we will be celebrating BEBA’s 20th anniversary. The purpose of this association is about helping promote bilateral trade and investments between Egypt and the UK. We also provide support to British companies wanting to come and invest in Egypt or sell their products and services. We also assist Egyptian companies wishing to export their products and services or invest in the UK. We act as a catalyst if these companies face any problem, need assistance, introduction or to facilitate their investments by explaining the fiscal and regulatory restrictions of each country. We bring companies’ issues to the administrations in order to resolve them and facilitate the business both ways.
BEBA works closely with the British and Egyptian business associations and chambers of commerce to facilitate trade and investments. BEBA was created by companies themselves that requested this platform. Today, we have some 800 members. These members are from both countries who all have something to do with the other country. Therefore, we act as a representation for them to put forward all of their issues or assistance they may need.
What makes Egypt such a great investment choice for British companies?
Egypt is a massive market with a well-diversified and growing economy. Despite the political situation and the big crash in 2008, we’ve still been growing. Even during the financial crisis, we were growing by four percent because of the diversified nature of our economy that effectively acts like a cushion. Moreover, we have quite a substantial population growth. More than half of our population is below 26 years old so it is a young population with a lot of potential. That is why most companies come and invest here. It is a destination for medium-term and long-term businesses but not for short-sighted investors or “flippers.” It is also interesting for the oil and gas sector because there’s an abundance of resources throughout our country, which has recently come under a renewed spotlight after the discovery of the supergiant gas field Zohr. An explanation for the stronger presence of the UK compared to other big players in Egypt would be the historical ties but also the geographic proximity between the two countries.
How exactly has Brexit affected trade flows between the countries from your perspective?
Until now, it hasn’t because nothing has been executed in Brexit. There will be changes but as far as I know, nobody can tell what the changes are going to be because even in the UK, they don’t know how it is going to work out. We have a promise that by the first quarter of 2017, they will really start figuring out the scenario of Brexit which then will reflect on British trade agreements and arrangements with the rest of the world and what impact it will have. We wanted to discuss it within the association, to sit with experts so they can advise our members but there is nothing to say yet.
Following the revolution in Egypt, economic and social stability had been a concern for many companies and investors. Based on the discussions you have with your members, what is their feeling right now?
Let’s face it, we had a lot of changes and, as a result, there was a lot of disruption. However, we have come a long way and we are definitely moving upwards. We had concerns about political stability and security which are not concerns anymore. We had a concern about monetary policy and the overvaluation of the Egyptian pound—two concerns that have recently been boldly addressed, particularly through the floatation of our currency. Now, we are working on the economic policy and how to attract foreign direct investments because we will need them so these are the two remaining points out of five. The first three, which were the hard ones, are behind us. We are now in a better position than most other Arab countries, thanks to us and to the stable Egyptian environment.
For your members, what are the challenges in going to Egypt or the elements of change they would like to see?
The biggest challenge is of course bureaucracy and the overinflated public service domain. There are too many public servants, which end up hurting the flow and efficiency of the process of doing business. This is the biggest challenge for all companies in all sectors.
In what areas of the economy are you seeing British companies play the most active role in?
Of course, oil and gas, telecommunications, banking and finance, and pharmaceuticals would be the biggest sectors for British companies. Now, there is some interest in the education sector. We are trying to help and to promote all bilateral cooperation for mid-sized companies. There are also British industrial companies that are engaged in and with Egypt, and vice versa. We are trying to promote those types of activities and especially trying to help SMEs, whether they are industrial, services or trade, in order to facilitate the business flow both ways.
In terms of news and headlines, we usually only hear about big companies like BP and BG but are you seeing any local Egyptian companies also taking an active role in some of these sectors such as oil and gas?
It goes without saying that there are plenty of good size companies (though not as big as BP or BG) but over the past 30 years, there has been quite a considerable amount of Egyptian companies that grew providing engineering, procurement and construction (EPC) solutions and other services. Some Egyptian E&P companies have even gone beyond Egypt and working in other markets globally.
What advice would you pass on to British companies coming to Egypt for the very first time to generate success?
If you’re looking for quick returns, it is not the right place for you, but if you come with a medium or long term outlook and you are willing to stick to the market, you will do very well and generate considerable returns. If you look back at the past 50-60 years, all the companies that stayed in the market and did not opt out at every downturn are now the ones reaping the rewards. Every country has its cycles and Egypt is no exception.