2023-08-23 19:42:00
During the year 2022, the Arab region has witnessed a remarkable increase in foreign direct investment projects, with an impressive annual growth of 74%.
Data from the Islamic Corporation for the Insurance of Investments and Export Credits (ICIEC) reveals that by the end of that year, 1,617 projects had been carried out, accumulating a value of 200 billion dollars . This phenomenal increase, equivalent to a 358% increase over the previous year, is one of the highlights of the regional economic landscape.
Likewise, the trend of increasing investments continued in 2023, with a 28% increase in the number of projects in the first third of the year, accompanied by a 70% increase in the total value. of these projects.
This dynamic movement of investments in the Arab region is particularly embodied by five nations, namely Egypt, Qatar, Morocco, Saudi Arabia and the United Arab Emirates. Together, these countries have attracted an overwhelming share of investment, totaling around $176.1 billion in 2022, or 88% of all investment from the Arab region. Conversely, the other countries in the region collectively accounted for only a modest 12%.
This diagram highlights the complex factors that have led to this concentration of investment in these five nations. These factors include specific circumstances, unique political and economic aspirations, as well as distinct strategies adopted by each country to become the engine of foreign direct investment (FDI) growth in the region.
Egypt played a central role in this trend, attracting around $107 billion in FDI in 2022, which accounted for 54% of the region’s total investment. The government led by President Abdel Fattah el-Sissi has put in place policies aimed at solving the liquidity crisis by attracting foreign investment to strengthen the country’s foreign exchange reserves.
Indeed, Egypt has long faced difficulties in honoring its external debt due to the lack of foreign currency. To remedy this situation, the government has sought to attract foreign direct investment in sectors such as renewable energy and real estate.
Morocco: Industrialization and diversification strategy
Unlike other countries, investments in Morocco are not the result of extraordinary circumstances. Instead, they reflect the continued implementation of strategies initiated since 2010 to transform Morocco into a diversified industrial economy. Foreign direct investment reached $15.3 billion in 2022, which has enabled Morocco to become a regional leader in contributing to the value addition of the manufacturing sector in Africa.
This industrial boom was supported by investments in infrastructure, improvements in governance and public administration, and incentives to attract foreign manufacturing firms. Sectors such as automotive, aeronautics, electronics and renewable energies have been focal points of this momentum.
Qatar attracted $29.8 billion in FDI in 2022, mainly through massive infrastructure investment to prepare for the 2022 World Cup. The expansion of Doha International Airport, the development of the city de Lusail and other projects have helped attract investment.
Saudi Arabia and the United Arab Emirates also played a major role, attracting $13.2 billion and $10.8 billion respectively in FDI in 2022. Saudi Arabia has launched tax incentives and initiatives to attract FDI foreign companies, while seeking to compete with Dubai as an alternative financial centre.
In conclusion, these five Arab countries have adopted various approaches to attract foreign direct investment. However, this dynamic also underlines the need for other Arab countries to develop competitive policies to attract investment and actively participate in regional economic growth.
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