It has been 18 months since Egyptian billionaire Naguib Sawiris said he would invest up to $500m in the Egyptian economy during the investor conference held in Sharm el-Sheikh in March 2015.

Instead, Sawiris has sold off his stake in mobile provider Mobinil and has since said he will not be investing that much in Egypt until real reforms are achieved.

“I would have invested five times as much as I have, had the authorities put in place the relevant reforms and amendments to outdated investment laws,” says Sawiris, who is the chairman and CEO of Egypt’s Orascom Telecom Media and Tech (OTMT), in an exclusive interview with MEED.

Speaking at his Cairo office, Sawiris’ optimism from 2015 seems deflated as he explains that his business ventures in Egypt “have been depressed and things have not been as positive as I had hoped they would”.

Inadequate actions

“The government has said all the right things in the past couple of years, but has not acted quickly or strongly enough to improve the business environment,” he adds.

In 2015, Egypt said it needed up to $300bn-worth of investments to truly rebuild the economy. Government ministries said attracting and improving investment and business activity is at the forefront of their agendas. First on the list was amending the country’s age-old investment law and providing foreign companies easy access to the market.

Egypt’s private sector, which Sawiris is often considered at the forefront of, claims the government, has failed in doing so.

“The government has all the good intentions and says all the right things – for example they said they would establish a one-stop shop for investment and change certain procedures – but the fact is all of this has not happened,” says Sawiris. He adds that “for smaller companies there is no real effort to provide a destination for them to knock on the door and enter the market”.

Sawiris points his frustration at Egypt’s infamous bureaucracy, which he claims is entrenched and requires a total overhaul rather than reform.

“You need to change the whole generation and the whole system. The current system requires legal, security, licensing and governance approvals. You have created a system with so many parties involved, where decisions are lengthy and at times impossible,” says Sawiris, who recently found himself in the middle of a dispute with the Egyptian Financial Supervisory Authority (EFSA) over the 2011 demerger of Orascom Telecom Holding, which resulted in the current OTMT’s shareholding structure.

The dispute damaged efforts by its subsidiary Beltone Financial to acquire local investment bank CI Capital – a deal that Sawiris says was central to his company’s growth strategy.

Currency paralysis

Another major issue that Sawiris points to is the currency situation grabbing most of the headlines about Egypt. “The currency crisis has paralysed us,” he says, adding that it is not the price of the dollar that is the problem, but rather the lack of supply. “The price does not matter for business, companies will always price accordingly,” he says.

When asked about the expected next round of devaluation, Sawiris expresses concern: “My fear is that they will come up with the wrong price. When you look to float your currency, you must look where the market is. If you start lower than the market then you keep the black market.”

The Central Bank of Egypt (CBE) has set the dollar price at £E8.8, while black market rates currently exceed £E13.

“Start at £E14 and then flood the market with the £E14 price, then drop it to £E13 and so on. Starting at the black market rate would allow the central bank to regain control of the price, explains Sawiris, who adds that the current economic situation has depressed his investments.

A long-awaited first round of devaluation was applied last year, reducing the value of the currency against the dollar by about 14 per cent.

Authorities in Cairo have indicated a second round of devaluation is imminent, although little has been revealed regarding the new rate.

Staying optimistic

Looking ahead, Sawiris says the recently approved $12bn loan from the IMF is a positive development. “The loan will mean the government must stick to its reform promises, ensure it is able to repay and move forward with other bilateral financing,” he says.

He also points to the success of oil and gas explorations by Italy’s Eni and the UK’s BP near the north coast of Egypt. “These finds are a gift from God and could completely transform Egypt’s economy.”

“Another positive is that the country no longer has an energy crisis,” says Sawiris, praising the government’s efforts in the past two years to ensure both the people and investors have access to energy.

The billionaire businessman talks about continued growth, which is central to the Sawiris philosophy, inherited from his father Onsi Sawiris, who founded the Orascom family business. Naguib founded the information technology (IT) and telecoms branch of the business, while his brothers Nassef and Samih took over the construction and development side.

Naguib Sawiris as a public figure in Egypt is often criticised for his ongoing scrutiny of the economic and political landscape. “I don’t like to be pessimistic about Egypt’s outlook. But everyone is complaining and we must be honest about our problems so we can move forward to fix them,” he says.

Social focus

In 2015, Sawiris was hailed for famously offering to buy a Greek island to help refugees fleeing the Middle East at the height of Europe’s refugee crisis. When asked about conditions closer to home and what could be done to avoid more unrest, he says: “The government must start by eliminating subsidies on food, fuel and energy, but at the same time replacing them with cash subsidies to the country’s poorest.”

Sawiris says the current system subsidises everyone, when only about 30 per cent of Egypt’s population require the cash payments from the government.

Although he believes that many continue to be dissatisfied with deteriorating living conditions and rising living costs, he says the majority of Egyptians do not want a repeat of the 2011 and 2013 unrest, caused by mass anti-government demonstrations.

Sawiris is not a stranger to politics and in 2011 founded the Free Egyptian Party, which then went on to support the 2013 ousting of the Muslim Brotherhood. Sawiris is now best described as a critical supporter of the current government, which he still believes can do more for Egypt’s economic recovery.

“It all starts with the president. Egypt has a system that follows the directions from the president,” he says.