Business Corruption in Egypt
Over the past two years, Egypt has witnessed deep political change and several uprisings which have had a major effect on the country’s economy and investment climate. The former Islamic government has been unable to deal with the economic deficit and a collapse in investment. Corruption, among the main engines behind the Egyptian Revolution, has spurred a major crackdown on corrupt officials from the former Mubarak regime; nevertheless, corruption still remains a problem and investors still report bribery and extortion in their interaction with government officials. The government has aimed at containing corruption through several initiatives and efforts, for instance:
- The 2012 Constitution was suspended after Morsi was removed as president by the country's military. Nevertheless, the drafted Constitution, sent for approval at the end of 2013, addresses corruption issues, such as whistleblower protection.
- The drafted Constitution, just as the suspended one, provides for the establishment of the Anti-Corruption Commission designed to deal with conflicts of interests, standards of integrity and transparency in government.
- Egypt has improved its performance in a number of regulatory areas, including starting a company and trading across borders, areas where Egypt performs impressively compared to regional averages.
- Although facilitation payments are often still required, Egypt has improved its performance in relation to issuing licences, permits and utility connections.
However, the country still faces challenges in curbing corruption. Challenges include:
- The political climate since the revolution in Egypt has been marred by instability, and anti-corruption laws have been poorly enforced in the country. The situation has further deteriorated after Morsi was removed from leadership.
- Companies are likely to encounter corruption in meetings with public officials. Officials in various government departments are known for bribery, embezzlement and tampering with official documents.
- Corruption and bribery are reportedly common when companies deal with public services, customs and taxes, public utilities and procurement.
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