Reuters reports that amid growing scepticism in some countries about risks tied to ‘Belt and Road’ investments, Egypt’s Minister of Investment and International Cooperation, Sahar Nasr said the country is only accepting Chinese investments in projects that are mutually beneficial.
China’s Belt and Road initiative is an ambitious plan to expand the trade corridor for the Asian giant to link Asia, Europe and Africa, by pumping credit into building roads, railways and ports in a trillion-dollar infrastructure drive.
In an interview on the sidelines of the International Monetary Fund-World Bank meetings in Bali, Nasr revealed Egypt and China had signed deals worth $18 billion as part of the Belt and Road initiative.
Nasr, who confirmed Egypt was only accepting mutually beneficial projects said “if we have more Chinese industries in Egypt, creating jobs for us, making us less dependent on certain imports and in fact exporting to Europe to Africa, it’s a win-win”. She also noted that Egypt was making sure it diversifies its source of financing, even within the same sector, noting that while China was involved in building a railway, locomotive and train carriages were being sourced from elsewhere.
Malaysia, one of the top recipients of China’s funds, recently suspended work on a $20 billion rail link between its east and west coasts because the Malaysian minister said it could damage the economy. The Belt and Road initiative was also met with scepticism in Sri Lanka, which has been plagued with debt that the country finds difficult to repay.
Zou Jiayi, China’s Vice Finance Minister acknowledged the debt issues with some of the Belt and Road initiatives. He said the Chinese government will strengthen macro-supervision on the debt sustainability aspect of its overseas investment.
The biggest foreign investors in Egypt are currently European countries and the United States. Nasr noted that Egypt, which is going through a reform after a 2016 deal with the International Monetary Fund, is a bridge between Asia and Africa due to access to the Suez canal and trade agreements with the rest of Africa.
China’s Belt and Road investments in Egypt include energy projects, a railway, real estate and an oil refinery. Nasr is targeting $10 billion in foreign direct investment in the 2018/2019 fiscal year, up from $7.9 billion in the year ended June 2018.
Nasr concluded by noting it was imperative that local companies invest more because “if the foreign investors don’t think the Egyptian investors are confident and reinvesting in Egypt, it will be very difficult for me to bring in foreign direct investment”.