Foreign direct investment (FDI) flows to Egypt reached around $11 billion in 2025, according to a report from the Organisation for Economic Co-operation and Development (OECD) titled “Review of the quality of foreign direct investment in Egypt.” The document highlights the country’s ability to attract increasing volumes of foreign capital, but points to a still insufficient contribution of these investments to job creation and innovation.
According to the study, the economic impact of these investments remains limited: every billion dollars of FDI generates only about 1,100 jobs in Egypt. This level represents nearly half of the average recorded in OECD countries – estimated at 2,100 jobs per billion invested – and remains below the regional average, which is around 1,600 jobs.
Construction and natural resources capture the majority of flows
This situation is largely explained by the sectoral structure of foreign investments. Over the decade ending in 2023, the construction and natural resources sectors accounted for nearly 80% of incoming FDI. Although highly capital-intensive and productive, these sectors generate few spillover effects in terms of technology transfer and knowledge diffusion within the local economy.
The report highlights the marked weakness of investments in research and development (R&D), which represent barely 0.2% of total FDI. Furthermore, only 5.5% of foreign companies established in Egypt declare investing in this area, indicating a still superficial integration of foreign firms into the local productive fabric.
A persistent productivity gap between foreign firms and local enterprises
The study reveals a significant productivity gap between the two categories of actors. Foreign companies exhibit production levels about 1.5 times higher than Egyptian enterprises. This gap is mainly due to the still limited absorptive capacity of many local companies, which do not always have the technical and managerial skills necessary to fully benefit from technology and know-how transfers.
In order to improve the economic impact of FDI, the OECD makes several recommendations. These include strengthening ties between local SMEs and foreign companies, as well as the implementation of practical guides for suppliers from SMEs.
