Two Egyptian female worker in a cooker factory. Electrolux Group.
The boycott campaign in Egypt has benefitted 100 local companies, especially in the food and beverage sector. Beginning in October with the eruption of the war on Gaza, the campaign was the most successful in years, with millions of Egyptians supporting it on different social media platforms.
“In order to compete with international brands that are established in the market, Egyptian brands need to launch successful marketing campaigns to attract customers. They also need to develop their products and enhance packaging,” Mohamed El-Bahi, a member of the Board of the Federation of Egyptian Industries (FEI), told Ahram Online.
El-Bahi added that the government should offer more incentives and privileges to local industries, including allocating land at low prices, or even free, for national industrial projects.
Egypt has been working to expand industry localization in many fields and decrease imports to mitigate the effects of the ongoing global economic crisis and the country's severe foreign currency crunch.
In mid-May, the Supreme Council for Investment issued 22 decrees to boost FDI and private investments in Egypt. The decrees include proposals for legislative amendments, which will be presented to parliament for voting soon.
Egypt is also developing advanced industries like auto manufacturing and green energy generation.
“We should focus on specialized industries that capitalize on the local market's advantages. For instance, supply chain disruptions could be an opportunity for Egypt to develop complementary industries,” El-Bahi stated.
However, he highlighted that Egypt will need to import some critical items from abroad. “There's no country that produces everything,” El-Bahi commented.
On 21 June, the Egyptian Cabinet approved new amendments to the Investment Law abolishing tax exemptions for state entities and affiliated companies in economic activities, in order to level the playing field between the private and public sectors and extend licensing rights to new industries in free zones.
Recently, the Egyptian government has offered a variety of incentives for private investments and industry in order to achieve its goal of increasing exports to $100 billion, including offering singe-approval “Golden Licenses" to accelerate the implementation of projects.
The golden license, activated in September 2022 as per El-Sisi’s directives, allows investors to acquire or lease land and operate enterprises on it without additional government approvals.
“The local investor or producer will not thrive while having to deal with dozens of authorities and struggle with bureaucracy. Therefore the unification of all dealings with official bodies into one entity will be beneficial,” Sayed El-Nawawy, member of the Board of Directors of the Cairo Chamber of Commerce and Deputy Head of the Chamber's Importers Division, commented in a phone call with Ahram Online.
“That is not the main point after all. To really support the local product, the state needs to offer further facilities,” El-Nawawy added.
The Cairo chamber member stressed that local producers generate revenue in local currency, while foreign investors transfer their profits outside the country in foreign currency, which adds more pressure on the pound.
Egypt is suffering a severe US dollar liquidity crunch, as over $20 billion in hot money has fled the market to benefit from the high-interest rates other markets offer through monetary policy tightening.
Dealing with the complicated economic scene in Egypt, the government announced a plan that aims to collect $191 billion through 2026, making slow progress on its initial public offering (IPO) programme and introducing more incentives for foreign investors, such as tax exemptions and Golden Licenses.
Egypt is also racing time to fulfill its commitments under its $3 billion loan programme with the International Monetary Fund, by applying flexible exchange rates and interest rates and allowing the private sector to play a greater role in the national economy.