Despite ongoing government efforts to ease the obstacles facing the manufacturing sector in Egypt, with the aim of increasing local content and strengthening the “Made in Egypt” label in international markets, a gap persists between policy decisions and their implementation.
Alaa Al-Saqti, a member of the board of the Egyptian Federation of Investors Associations (EFIA), told Al-Ahram Weekly that the gap between government directives and their implementation on the ground has caused frustration among investors.
He explained that initiatives aimed at supporting the industrial sector had been weakened by strict eligibility requirements. The 15 per cent financing initiative aimed at selected industrial sectors imposes conditions that many investors find difficult to meet, for instance, he said.
Al-Saqti said that bank lending rates at between 23 and 24 per cent continue to pose a major challenge to the industrial sector, which needs financing at no more than 15 per cent to improve cost efficiency and competitiveness in domestic and international markets.
Greater clarity in government policies is needed, along with the improved availability of industrial land, he added.
Current government land offerings at around LE3,000 per square metre are limited, pushing many investors to purchase land from private developers at approximately LE5,000 per square metre and significantly raising financial burdens, according to Al-Saqti.
Frequent adjustments to fuel prices have also complicated production planning, he said.
In addition, delays in the disbursement of export rebate arrears, some pending for more than two years despite full documentation, remain a key obstacle for exporters.
According to figures cited in Egypt’s Narrative for Economic Development, the country’s national development narrative, allocations for Egypt’s export support programme are expected to be raised to LE45 billion under a comprehensive strategy to enhance competitiveness.
The plan includes a clear mechanism for settling overdue rebate payments and ensuring that all new claims are disbursed within a maximum of 90 days without deductions.
Egypt’s merchandise exports registered $40.5 billion during the first 10 months of 2025, a 13.4 per cent increase on exports of $35.7 billion for all of 2022. Essam El-Naggar, head of the General Organisation for Export and Import Control, anticipates total exports for 2025 would range between $48 billion and $50 billion.
Despite the ongoing challenges, Egypt remains one of the region’s most attractive investment destinations, supported by its strategic location, extensive trade agreements, and a large domestic market, Al-Saqti said.
He also highlighted the competitive advantage of Egyptian labour, noting that the minimum wage in Egypt of around LE7,000 is significantly lower than that in neighbouring regions, enhancing Egypt’s production cost advantage.
Amr Aboufreikha, a member of the board of the Engineering Industries Chamber at the Federation of Egyptian Industries, warned that both domestic and foreign investments are at risk due to a recent decision imposing duties of 13 to 15 per cent on imports of hot-rolled and cold-rolled steel sheets.
The decision is obstructing production and weakening the competitiveness of local industry, he added.
Sectors including transportation, automotive manufacturing, machinery, and various home appliances rely heavily on steel sheets as key production inputs.
Aboufreikha noted that the sudden increase in production costs has placed additional pressure on manufacturers “without a concrete justification for such a decision”.
He stressed the need for stronger coordination among the relevant authorities when addressing industry concerns, highlighting that decisions should be evaluated in a way that ultimately supports national industry.
Delays in reaching decisions create uncertainty among investors, who often view prolonged administrative procedures as a form of bureaucracy despite the government’s efforts to boost industrial activity, according to Aboufreikha.
* A version of this article appears in print in the 20 November, 2025 edition of Al-Ahram Weekly
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