In its weekly gathering at the Cabinet’s New Administrative City headquarters, the Egyptian cabinet greenlit five pivotal resolutions regarding the Ras El-Hikma coastal zone in Matrouh Governorate.
Special Free Zone
The cabinet approved the establishment of a special free zone called “Ras El-Hikma Urban Development Project Company S.A.E.”
Investment Zone
Egypt’s cabinet also gave the green light to the Prime Minister’s proposal to establish an investment zone in Ras El-Hikma.
Golden License
The cabinet approved a draft decision to grant the “Golden License” to the Ras El-Hikma Urban Development Project Company S.A.E. for the investment zone and the special free zone projects.
Board of Directors
The cabinet approved the Prime Minister’s draft decision to establish the Board of Directors for the Ras El-Hikma Investment Zone.
Specialized International Tourist Port
The Cabinet approved the establishment of a specialized international tourist port by the Ras El-Hikma Urban Development Project Company in the new Ras El Hikma City.
What does this mean?
These decisions mark a substantial advancement in the development and enhancement of Ras El Hikma City. Creating a special free zone and an investment zone is anticipated to attract investments, generate employment opportunities, and drive economic growth in the area.
Issuing a Golden License will streamline the investment process and incentivize investors. Meanwhile, establishing the Investment Zone Board of Directors will ensure efficient governance and oversight of the zone’s progress. Additionally, introducing a specialized international tourist port will bolster the city’s appeal to tourists and open further economic avenues.
Ras El Hikma project
In February, Egypt finalized its largest foreign direct investment (FDI) deal with the UAE’s ADQ to develop the Ras El-Hikma area. Valued at $35 billion, the deal aims to attract an estimated $150 billion in foreign direct investments. Of this, $24 billion in cash flow has already been received by Egypt through May, with the remaining $11 billion comprising UAE deposits at the CBE earmarked for the Ras El-Hikma development project. The project is slated to commence in 2025.
The International Monetary Fund (IMF), upon completing the first and second reviews of its Extended Fund Facility (EFF) loan program in March, acknowledged that the Ras El-Hikma deal has relieved the near-term balance of payment pressures. However, the IMF emphasized the importance of judicious use of these funds to rebuild buffers for future shocks.
Despite the positive impact of the Ras El-Hikma deal, the IMF underscored that continued implementation of economic policies under the loan program is crucial to sustainably address Egypt’s macroeconomic challenges. Additionally, robust delivery of structural reforms is essential to empower the private sector as the engine of the country’s economic growth.
