Qalaa Holdings is Egypt's leading investment company, managing assets of more than EGP84.4bn ($4.7bn) across five major economic sectors. Its Chairman and Pounder, Dr Ahmed Heikal (below) discusses the business with Stephen Williams.
Dr Ahmed Heikal is the Chairman and Founder of Qalaa Holdings, one of the leading investment companies in Africa and the Middle East. Formerly known as Citadel Capital, Qalaa has been drawing on its roots as Africa's largest private equity firm since 2004 to build businesses in the core industries that will define our continent's future: energy and infrastructure. It has built over 50 companies, created over 40,000 jobs and holds total assets of EGP84.4bn ($4.7bn) as of 30 June 2018. In 2009, the firm was listed on the Egyptian Stock Exchange.
He starts his interview With African Business by summarising both the current strengths, and weaknesses, of the Egyptian economy.
"At this point in time we are seeing a huge expenditure by the state on the nation's infrastructure, especially in the electricity sector in both improvements to generation and transmission," Dr Heikal says. "We are also seeing improvements to the telecommunication infrastructure. And a substantial increase in oil and gas production is contributing to an improved balance of payments that will, maybe not this year but eventually, lead to a reduction of our budget deficit.
"Electricity, roads, oil and gas assets and telecommunication have all received substantial attention and improvements, and this will eventually result in improved FDI flows into Egypt."
FDI flows to Egypt have been relatively strong in recent years. Between 2013 and 2017, Egypt's market share of total African FDI has increased from 5% to 13%, an average of 8% over the period.
But Dr Heikal cautions the need for discipline with regard to public debt as a key requirement for Egypt's economy.
"The main weakness that we face at this point in time is an over-reliance on foreign currency debt. In fact, Egypt needs to be careful of increasing levels of public debt, in both foreign and local currency denominated debt," he says.
"But I am very much encouraged by a recent mandate to the planning ministers requiring approval for any further public debt on the part of government."
Qalaa Holdings' major investment in a new oil refinery has the potential to positively impact the country's balance of payments situation. For example, it should reduce Egypt's imports of diesel by...