It has been six months since President Abdel-Fattah Al-Sisi launched the National Initiative for Developing the Egyptian Industrial Sector, Ebda for projects Development (EBDA), which aims to support local industry, boost domestic production, and reduce imports by strengthening the Egyptian private sector’s role in financing and operating micro, small, medium-sized, and larger enterprises that produce domestically manufactured versions of imported products.
According to Managing Director of EBDA Dina El-Dalil, the association — the Arabic acronym of which means “start” in English — is the “economic arm” of the Decent Life initiative that President Al-Sisi launched in 2019 with the aim of ensuring a dignified life for the most vulnerable groups nationwide by developing rural communities and improving essential utilities and public services.
EBDA is an Egyptian joint stock company, 81 per cent of whose shares are controlled by the Decent Life Foundation and whose objectives are integrated into the government’s overall national objectives.
It has an initial target of saving $16 billion in foreign exchange (FX) through measures including localising further industries. According to El-Dalil, EBDA has localised 23 industries so far, and other steps include developing new industrial enterprises and forging partnerships with foreign firms.
To date, EBDA has established 64 new enterprises and forged 23 partnerships with partners from 12 countries.
“Other ways for us to save foreign exchange are to encourage local factories to increase production for export and for Egypt to serve as an export hub for Africa, the Middle East, and Europe,” El-Dalil said.
“We have foreign partners that inject foreign direct investment (FDI), such as the Hawa Group in which our Chinese partners have provided a large part of the production lines.”
The Hawa Group manufactures light transport equipment.
EBDA also operates a factory that produces natural gas safety valves in partnership with Copreci, one of the largest members of the Mondragon Assembly Group which specialises in their manufacture. The group has provided the production lines.
It has joint manufacturing agreements to produce water pumps with major international companies such as the Italian-based Gruppo Aturia and Torishima Pump from Japan, while other foreign firms have provided FDI. “All this helps save foreign exchange,” El-Dalil said.
Many of these projects directly benefit the recipients of the Decent Life initiative. Water pumps, for example, are essential for bringing potable water into people’s homes in Egyptian villages.
Localisation means replacing imported goods with Egyptian-made ones. “One of our most important goals is to transform importers into manufacturers. We have succeeded in doing this with several firms, such as Raja Home Appliances which recently launched Raja EBDA, a company specialising in the manufacture of cookers,” El-Dalil said.
“Importer to manufacturer conversion is one of the most successful aspects of the EBDA initiative.”
Localisation also equals job creation, which is one of EBDA’s impacts that can be felt in the short term. “We have factories that are already in operation and others that will open soon,” El-Dalil said. Four new factories have been opened since it began. In addition to the two above, there is also an engine factory and a shoe factory.
Further efforts will focus on strategic industries, especially in the petrochemicals and construction material sectors.
In the interest of boosting domestic industry and job creation, EBDA is helping to reboot floundering factories and offers various types of training to workers.
It aims to save $16 billion through the establishment of 64 import-substitution projects that will create 150,000 direct job opportunities and contribute LE350 billion to GDP, El-Dalil said.
EBDA is a presidential initiative that receives support from various government agencies. “We are a link between potential industrial entrepreneurs and various government agencies, and our purpose is to help smooth out and minimise obstacles and any challenges that might arise,” she added.
“We get to know the entrepreneurs’ needs and requirements, and we convey this information to government agencies and key decision-makers. Ultimately, the purpose is to create an environment that encourages investment and the indigenisation of various types of industries.”
Young volunteers for the Decent Life initiative contribute to EBDA’s drive to reinvigorate local industry. “They carry out field surveys to gather information on struggling factories in the towns and villages served by the Decent Life initiative. This helps us to allocate the types of support that manufacturing enterprises in those areas need.”
Occupational training goes hand in hand with this process, as do short-term and long-term plans. EBDA has established a training presence in the countryside through its factories, and it aims to train people in order to generate economic empowerment. Such plans are being carried out in Sohag and Gharbiya, but the idea is to expand them to all the governorates.
One of the training programmes is being implemented in partnership with Pico Heavy Equipment and aims to train the operators of heavy equipment such as loaders. “In the process, we’re developing an initiative that offers a seven-year facilitated finance lease on a loader, payable in instalments, so that by the end of the period the trainee will not only have learned how to operate the machine, but he will also own it outright,” El-Dalil said.
Long-terms plans are being carried out in collaboration with the Egyptian Federation of Industries and the Ministry of Labour and involve upgrading training centres affiliated with the Productivity and Vocational Training Department and developing technical colleges under the Ministry of Education and Training.
“Our goal is to ensure that students and trainees emerge with internationally recognised certificates that could help us to export manpower at a future stage,” El-Dalil said.
Recent economic circumstances have been hard for manufacturing enterprises, and EBDA is working to address this through its industrial support component. “If there’s a factory in trouble, we try to help it get back on its feet and then expand,” she added.
“We also try to help struggling startups to keep going by helping them obtain licences and permits and overcoming bureaucratic obstacles. If they need financing, we work with the agencies that can help, including the banks, and we also work with the enterprises themselves to produce the required feasibility studies.”
A startup in energ=y technology had run up against a bureaucratic wall in its efforts to obtain a manufacturing licence, she said. “The owner was about to close the factory and pack his bags and leave. But he changed his mind thanks to the help from EBDA.”
Another success story is the Raja Company’s new cooker, the first such household appliance to be domestically manufactured with 90 per cent local components. According to El-Dalil, the cooker will retail at an affordable LE600.
“Localising the production of household appliances will be a great step forward for Egyptian industry because we import so many of them at great cost to the FX reserves.”
She added that EBDA has been studying import patterns and FX outlays to identify which industries should be prioritised for industrial localisation.
* A version of this article appears in print in the 13 April, 2023 edition of Al-Ahram Weekly