Egypt has been on a path towards reinforcing its macroeconomic stability since March 2024, and government measures have helped to consolidate macroeconomic conditions in the country and improve indicators related to growth, the state budget, and monetary and fiscal policy.
However, due to regional and global shifts, it was necessary to adopt an economic reform programme that aligned the government’s agenda with sectoral visions and strategies, as well as with Egypt’s Vision 2030. It was in this context that the National Narrative for Economic Development was launched, providing such alignment and translating the priorities of structural reform into a coherent set of measurable quantitative targets.
The food industries sector is among the industrial sectors witnessing notable growth. It enjoys broad export markets, and its exports are increasing on an annual basis, making it one of the sectors on which the state relies to boost exports and increase GDP growth.
Hassan Al-Fendi, a member of the Chamber of Food Industries and head of Al-Horeya 2000 for Food Industries, said the sector has been improving its performance in recent years. He noted that Egypt has strong technology, low-cost labour, and raw materials unavailable to many competitors, but that it is still being held back by the slow disbursement of export rebates, important to food and other exporters who depend on them to secure foreign currency.
Egypt’s exports of food exceeded $5.1 billion in the first nine months of 2025, recording growth of 9.4 per cent compared to the same period in 2024. The sector ranks third among Egypt’s non-oil export sectors and includes a wide range of products including frozen strawberries, soft drink concentrates, edible oils, pasta, and essential oils.
Saudi Arabia, the US, Sudan, and Libya are among the biggest importers of Egypt’s food industry products.
The ministries of investment and foreign trade and of finance launched an export rebate programme in June to support exporters by reimbursing part of their costs, thereby encouraging exports and enhancing their competitiveness. Under the scheme, dues are paid within 90 days.
The programme’s budget doubled in the 2025-26 financial year to LE45 billion, of which LE38 billion are allocated for targeted sectors, including the food industries.
Al-Fendi said that increasing the food industries’ productivity would require the faster issuance of industrial licenses and easier access to land at appropriate prices. He said that the state should make land available at a low profit margin, or without a profit, given that it is a significant cost component and an element in the production process and that the objective is to promote industry rather than sell land.
Exchange-rate stability has long been one of the main obstacles facing the industrial sector in Egypt, he added. However, the stability achieved since last year is now helping industrial investors determine their costs and calculate the feasibility of new projects or expansions.
Nonetheless, the interest rate on borrowing remains a constraint on the industrial sector, he said, adding that current lending rates impede industrial and commercial activity. With interest rates now at about 20 per cent, the prospects of success for any project are limited, he added.
Al-Fendi said the state is working to address this challenge, with the Central Bank of Egypt (CBE) moving towards reducing interest rates. He proposed that the CBE introduce low-interest initiatives to finance the industrial sector.
During the 14th meeting of the Ministerial Group for Industrial Development recently, the government launched the first phase of a new initiative to support companies in priority industrial sectors. The initiative provides LE30 billion to finance facilities for the purchase of machinery, equipment, and production lines to increase productivity and promote economic growth.
Al-Fendi believes that the problems investors once faced regarding lengthy customs clearance procedures for imported raw materials have now been resolved, with the clearance period reduced from 20 days to six to eight. Efforts are underway to shorten this period further, he said.
Another problem that has been solved is that the foreign currency that production facilities need to import raw materials is now available. In recent years, particularly before the exchange-rate liberalisation last year, foreign currency was not always available.
Al-Fendi believes that the current tax on profits of 22.5 per cent is acceptable. One problem that remains unresolved, however, is the integration of the informal sector into the rest of the economy. Competition with this sector is not fair to those in the formal sector, Al-Fendi said, since the informal sector is typically not bound by quality standards and does not pay value-added tax (VAT), which stands at 14 per cent.
The property taxes imposed on industry are also unrealistic, Al-Fendi said, since industrial land should be regarded as a productive asset rather than a profit-generating one.
Despite the success of the food industries sector, many of its inputs are not produced in Egypt, he added, such as maize and food oils, of which Egypt imports 90 per cent of its needs.
Plans are ongoing to expand the cultivation of oilseed crops in the country.
* A version of this article appears in print in the 20 November, 2025 edition of Al-Ahram Weekly
Short link: