Saudi Arabia has announced plans to convert its deposits at the Central Bank of Egypt (CBE) into investments as part of a strategic initiative to enhance economic relations between the two nations, an official statement showed in August.
Converting deposits into investments
This development was confirmed by Saudi Minister of Investment Khalid Al-Falih during his visit to Egypt earlier this month. During the visit, Al-Falih met with the Egyptian Prime Minister, as well as officials from the ministries of Transport, Industry, Planning, and International Cooperation, and the Chairman of the General Authority for Free Zones and Investment.
In his meeting with the Egyptian Prime Minister, Al-Falih noted Saudi Arabia’s commitment to viewing Egypt as both a key market and a strategic partner in regional economic integration. “We see Egypt as both a complementary partner and a promising market, offering significant opportunities for investment and expansion,” Al-Falih remarked.
The move follows a precedent set by the UAE, which previously converted foreign deposits into investments as part of its $35 billion Ras El-Hekma deal.
Saudi Arabia’s current deposits with the CBE total $10 billion, with $5.3 billion of these funds scheduled for reimbursement by October 2026. The conversion of Saudi deposits into investments signifies a significant step in reinforcing economic ties and fostering sustainable growth between the two countries, promising to enhance the economic landscape in Egypt and drive forward regional economic cooperation.
Al-Falih emphasized the Kingdom’s aim to amplify its investments in Egypt and to bolster Saudi investments across various sectors, including industrial, construction, and tourism. He also noted that Saudi companies have a substantial presence in Egypt, with ongoing and planned projects demonstrating robust growth potential.
On his side, Prime Minister, Mostafa Madbouly, acknowledged the Egyptian government’s efforts to address challenges faced by Saudi investors, noting that approximately 70% of these issues have been resolved. He expressed eagerness to advance bilateral relations further and expedite the implementation of joint investments.
During Al-Falih’s meeting with Rania Al-Mashat, Egypt’s Minister of Planning, Economic Development, and International Cooperation, she echoed this sentiment by highlighting the country’s focus on expanding Saudi investments. Al-Mashat emphasized the diversity of Saudi investments in Egypt and reaffirmed the government’s commitment to improving the investment climate for the private sector.
Additionally, Deputy Prime Minister and Minister of Industry and Transport Kamel El-Wazir outlined investment opportunities in Egypt’s transportation and logistics sectors in his meeting with the Saudi Minister. He highlighted the development of seven international logistics corridors and investment prospects in Egypt’s seaports, including Sokhna and Alexandria. These initiatives align with President Abdel Fattah El-Sisi’s vision to strengthen economic collaboration between Egypt and Saudi Arabia, he said.
Saudi investment office
In a similar vein, Egypt will inaugurate a new Saudi investment office at the headquarters of GAFI later this month. Hossam Heiba, CEO of GAFI, stated that the office aims to strengthen economic and investment relations between Egypt and Saudi Arabia.
“We have reached an agreement with Saudi Arabia to channel new investments into Egypt. The Kingdom’s investments are a top priority for us,” Heiba remarked.
GAFI plans to set up similar investment offices for other major investing countries, demonstrating Egypt’s commitment to boosting foreign investment. Heiba also noted a significant increase in Egyptian companies operating in Saudi Arabia, now totaling around 4,000.
Saudi investments in Egypt have already reached $6.3 billion across 7,444 projects spanning various sectors including industry, construction, tourism, services, and telecommunications, as announced by Egypt’s Minister of Trade and Industry in November 2023.
According to a report by the Saudi Ministry of Investment released in June, Egyptian companies received 30% of the investment licenses issued in the first quarter of 2024, totaling 950 out of 3,157 licenses. In addition to the new investment office, Egypt and Saudi Arabia are nearing the final stages of negotiating a bilateral agreement designed to encourage and protect investments. Both countries aim to finalize the agreement by the end of August, as confirmed by the Minister of Investment and External Trade.
This collaboration underscores the strengthening economic ties between Egypt and Saudi Arabia, positioning both nations to benefit from increased mutual investment and economic cooperation.
