In the framework of the Sustainable Development Strategy (SDS) of Egypt Vision 2030, Egypt has been in the process of designing a detailed industrialisation action plan. The goal is to lift the country up into the ranks of the top 30 industrial performers within ten years. To this end, the government has been working to furnish a robust infrastructure and it has significantly increased the number of manufacturing permits it has issued. Efforts are under way to streamline the process, eliminate bureaucratic overlap between ministries, promote coordination between the relevant agencies and other such actions needed to facilitate the progress of the industrialisation vision.
The House of Representatives is currently formulating a strategy to achieve a number of goals. Those include high targets for the volume and quality of exports and sourcing the raw materials necessary for designated manufactures. In their discussions in parliament, lawmakers emphasised the need to encourage greater levels of investment in Egypt. According to the chairman of the House’s Industry Committee, the aim is to more than quadruple the volume of exports from the current level of $23 billion to $100 billion. He urged a focus on the more profitable industries. “For example,” he said, “Egypt produces 50,000 tons of casting while Germany produces 5.3 million tons, and the price per 20,000 tons has risen to a billion dollars.” He also advised increasing production of edible oils, of which Egypt currently importing 1.4 million tons a year at a cost of $600 million. He added, “we need to think outside the box.”
Boosting domestic production and increasing export rates are the highest priorities of the Ministry of Trade and Industry anyway. That is why it launched a national programme to expand domestic production with the aims of augmenting the added value of locally manufactured goods and increasing the rates of import substitution. In its initial phase, the programme has targeted a number of goods and products to be produced locally in sufficient quantities to meet the demands of the local market. At the same time, the political vision attaches great importance to the task of increasing export volumes in all sectors, but especially those in which Egypt enjoys a competitive edge, so that we can stand a better chance of reaching the $100 billion export volume target.
The government is currently studying a variety of proposals for facilitating export procedures and overcoming hurdles in the way of the smooth flow of Egyptian exports abroad, especially to African markets which are among the primary targets in the Ministry of Trade and Industry’s plan to increase exports. “The ministry has adopted an ambitious plan to develop and expand industrial zones throughout the country,” Minister of Trade and Industry Nevine Gamea said recently. “In addition to 13 new industrial complexes that have been established across the country, containing more than 4,000 manufacturing units fully equipped with all the necessary utilities and facilities, seven more complexes were proposed last year, offering an additional 1,657 fully equipped units of different sizes. There is a high demand for the units that are already available in seven governorates for rent or purchase with unprecedented facilitated terms. The demand is especially high among entrepreneurs with small or micro projects.”
IMF Executive Director Mahmoud Mohieldin believes that, in the light of Egypt’s development efforts during the past three years and the economic stability the country has achieved, to which international rankings and indexes bear testimony, Egypt has the ability to build an industrial base from the groundwork laid by the national megaprojects. Addressing the “Egypt Can with Industrialisation” conference last week, he underscored the need to focus on import substitution and exports. There are products produced locally for self-sufficiency and others that are produced for export, he said. Therefore, there is no need to have a single policy. In fact, diversity is of the essence if Egypt is to attain the goal that the political vision has set for export volume. Encouraging decision makers to focus more on exports than imports, Mohieldin suggested that they should discuss policies that would give greater support to export trade with the Central Bank. On the whole, the IMF director was optimistic. He believed that Egypt would be able to reach the $100 billion target.
*A version of this article appears in print in the 18 February, 2021 edition of Al-Ahram Weekly