How have investors’ attitudes towards Egypt changed during the past year?
To understand what we have achieved, we must look back at where we were.
Egypt has been experiencing a lot of hiccups since 2011, not 2015 or 2016. In 2011, there was a stoppage that affected the economy negatively, and the private sector started to exit because the country was not stable. The state had to step in. The vision was to build infrastructure— power plants, ports, and roads — that could support a diversified economy.
Political stability returned around 2015, and Egypt launched an economic reform programme centred on monetary policy and fiscal adjustments. But at the end of 2019, the whole world was faced with the Covid-19 pandemic, which changed the rules of the game. In 2020, the disruption of value chains began, persisting into 2022‑2023. Then came the Russia-Ukraine war, creating a severe strain on the commodity markets, especially for grain imports that are vital to Egypt’s food security. These two events overlapped, stretching the country’s resources.
The global inflationary surge that followed pushed interest rates higher. Capital flowed towards the safe‑haven US market, leaving emerging economies like Egypt with a severe dollar shortage — what we called a “currency crunch”. We had to work on another reform programme quickly to overcome this.
In the past, when we sought financing from different parts of the world, including from our Gulf friends, most of the time support came in the form of grants. After 2011, the grants stopped, and whatever we sought had to be related to a project financed either through a loan or an investment. To do that, we needed to formulate an investment strategy.
The core of this effort was a revised investment law that introduced a clear incentive structure: capital‑expenditure rebates, whereby a portion of the investment cost is partly refunded after project completion, encouraging serious, long‑term investors; and operating‑cost support, helping projects reach profitability sooner. These incentives were not a sign that Egypt lacked inherent advantages; rather, they were there to speed up attracting investment.
By 2023, we had a clear plan inspired by the Egypt Vision 2030 strategy. We identified through this vision what the needs of investors were and the sectors that had potential.
What are the sectors you identified?
We are highly competitive in eight main sectors, expandable to 13. This is a major advantage for the economy, as it is diversified rather than being dependent on a single sector or product.
We have a strong competitive advantage in renewable energy, which is the energy of the future. We identified hydrogen production as a key area of comparative advantage. A dedicated legal framework offers tax breaks and fast‑track permits for hydrogen projects, and we have already signed agreements that will allow us to export green hydrogen to Europe.
For other forms of renewable energy, we started by localising the production of glass, photovoltaic cells, and solar modules. By the middle of next year, we expect to be producing almost 100 per cent of the components needed for large-scale solar plants locally. We have also begun doing the same for wind energy. Today, nearly 70 per cent of wind components are produced locally, and we are inviting additional manufacturers to join us. What remains is mainly the turbine itself, which is highly technology-intensive.
One major development is the setting up of a company to produce wind turbine blades.
Another major focus area is industry. One key sector is pharmaceuticals. Egypt currently produces about 93 per cent of its domestic pharmaceutical needs. Our goal is to achieve 100 per cent local production.
The remaining seven per cent consists mainly of active pharmaceutical ingredients (APIs), the core ingredients that make drugs effective. Globally, API production is a highly concentrated and monopolistic industry, dominated by just a few countries in Asia with strong proprietary control. We are working with international partners to establish API production in Egypt, while leveraging our existing R&D capabilities. We have significant human capital and expertise, but we need to strengthen the tools and infrastructure, creating another opportunity to establish advanced R&D centres.
As part of this effort, two Indian pharmaceutical companies are already moving forward, one in the Suez Canal Economic Zone and another in Egypt’s Medical City.
Another key sector is textiles, a traditional industry in Egypt. The government has invested heavily in rehabilitating the Mahalla Al-Kobra factories, and our current focus is on attracting new investors while fully utilising the existing production capacity in state-owned companies. Our strategy goes beyond garment production to include manufacturing components across the supply chain. A critical factor in attracting textile investment is engaging with global brands. These brands determine where products are manufactured, what materials are used, and how production is carried out, while manufacturers simply execute their specifications.
We engaged directly with these brands and asked what they needed to establish factories in Egypt. They identified many requirements, and we began addressing them. Once one major brand commits, others tend to follow. Among the main issues we addressed were policy clarity, labour laws, workforce availability, and labour protections, including the absence of child labour, women’s participation, diversity, and environmental standards. Environmental compliance has become especially critical, as sustainability requirements now affect all aspects of production.
Logistics was another major challenge. Since not all inputs are produced locally, large volumes of materials must be imported. This requires efficient freight handling, port operations, and customs clearance. Historically, these processes have been complicated in Egypt, but significant progress has been made. Over the past year, the Minister of Foreign Trade has led major reforms, reducing average customs clearance times from 16 to 17 days to around five. The target is two days, and eventually two hours by next year.
As investors saw this tangible progress, they began encouraging others to come to Egypt. While challenges remain, investors see the difference between where we were and where we are now. We do not need to resolve every single issue before investors commit. What matters is that they see clear commitment, functioning mechanisms, and continuous improvement. The system is designed to work regardless of who is in the office.
Increased investment leads to increased imports, which in turn put pressure on the currency. How is this challenge being addressed?
The key is to increase exports, not to reduce imports. Exports are essential, and there is a clear plan to reach $145 billion in exports by 2030.
This target is based on the economic growth we are aiming for of around seven per cent by 2030. To sustain that growth, we need a trade surplus. Reaching $145 billion in exports would allow us to maintain a surplus of around $10 to $15 billion even while continuing to import.
Import restrictions are not the solution. Around 85 per cent of our imports are production inputs and they cannot simply be stopped. What we can do instead is bring more of the value chain into Egypt. This would help reduce part of the import bill. In other cases, producing certain inputs domestically is not viable if the value added is only five to 10 per cent. In such situations, it makes more sense to focus resources on industries with higher value added and use export revenues to cover necessary imports.
These priorities have been identified by the Ministry of Industry. Based on them, the GAFI promotes targeted industries and activities globally. We approach companies that already export to Egypt. Their existing export volumes represent a guaranteed local market, while additional production can be exported, increasing their overall benefits.
Another major incentive is Egypt’s extensive network of trade agreements. Egypt has free-trade agreements with more than 70 countries. In addition, Egypt’s geographical location places it close to key markets. Recent disruptions to global value chains have accelerated a shift toward nearshoring, with manufacturers seeking to be closer to their markets and markets wanting distribution networks closer to producers.
There is also the automotive industry. We have a Supreme Council for the Automobile Industry, operating under a strategy developed in close partnership with the private sector. We are seeing a growing number of automobile companies investing in Egypt. For the automotive sector, any new project must include at least 30 per cent local content to be approved. Additional incentives are provided when local content exceeds 40 per cent.
We have also made significant progress in home appliances and electronics. What began as an effort to become a regional hub has rapidly evolved into becoming an international hub, all in less than two years. Egypt is now producing and exporting mobile phones, supported by multiple investments from major global players, including five companies from China and Korea. These include some of the world’s leading manufacturers, such as Samsung, which is already producing in Egypt and continuously expanding its product range.
In fact, some products manufactured in Egypt are produced nowhere else and are exported worldwide, reinforcing Egypt’s position as an international manufacturing hub. Haier Group, the Chinese multinational home appliances and consumer electronics company is following a similar path, despite having established its operations only about a year ago.
Logistics is another key sector, benefiting from Egypt’s unique geographic location. We are offering a wide range of logistics projects that capitalise on this strategic positioning. Tourism, of course, remains a natural strength, but we have significantly expanded the range of tourism products. In addition to cultural, entertainment, and beach tourism, we now promote events, cultural experiences, eco- and adventure tourism, health and wellness tourism, and more.
For each of these sectors, we have developed tailored incentive packages. Importantly, all these incentives are derived from the existing investment law, and no new ones were created. Instead, we bundled and customised them by sector. We worked closely with the relevant ministries and the Ministry of Finance to design these packages, and the process has been driven by strong public-private engagement.
What are you offering entrepreneurs and startups?
We are not offering simple handouts or paying companies to come in. That approach turns entrepreneurs into employees and does not give them the space to truly innovate. What we are doing instead is based on a clear philosophy: no country can grow by operating only within its own market. Expansion and collaboration are essential. This has been our approach since 2023, and we are now seeing tangible results.
For example, in our discussions with Saudi Arabia, there is now a shared understanding that collaboration is key. The same was reinforced recently in our meetings with Qatari counterparts. When Saudi entities want to launch certain projects, they often seek Egyptian partners because of their knowledge, expertise, and access to the Egyptian market. Our approach is simple: invest in the Egyptian company and allow it to expand into Saudi Arabia or vice versa. If a company has a competitive advantage in Saudi Arabia, it can establish itself there and then expand back into Egypt, providing complementary or additional services and broadening its market reach.
I actively encourage Egyptian companies to expand abroad. I do not want them to limit themselves to one market. I urge them to look at Saudi Arabia, Morocco, India, and beyond. Whenever I travel, I promote investment into Egypt, but I also promote Egyptian companies’ expansion into those markets.
This is a natural evolution for any successful company. Once a product or service proves itself locally, it should expand internationally and not just through exports. Exporting is often a second-best option, used when direct market presence is not possible. When companies can establish a local presence, it is far more effective to operate close to the market through local partnerships. This is the same logic we apply when encouraging foreign investors to come to Egypt.
Of course, companies will repatriate profits, but they will also gain new technologies, know-how, and market experience. This exposure strengthens their capabilities back home, improves efficiency, and diversifies revenue streams.
What is the expected size of foreign direct investment (FDI) in Egypt this year?
Last year, Egypt attracted around $12 billion in FDI and close to $13 billion. This represents a significant increase compared to 2022, when FDI stood at about $4 billion. This does not include investments for Ras Al-Hekma development. This rise, from $4 billion to $12 to $13 billion, is a clear surge. The target for this year is $15 billion and it does not include the investments for Alam Al-Roum development.
What matters is sustainable investment flows into small, medium, and large projects because these are the investments that stay, create jobs, and transfer technology. Overall, we feel that momentum is building and that the system is working steadily.
To what extent have Golden Licences helped attract investors?
Egypt’s Golden Licences have significantly helped attract investors by offering streamlined, single-approval process that cuts through red tape and provides substantial incentives, particularly in manufacturing, renewable energy and infrastructure.
So far 53 such licence has been issued. To qualify, it has to be a national strategic project with investments of at least $30 million. The main advantage is that it’s pre-planned, allowing investors to start working quickly.
Which sectors are investors most interested in?
Industrial sectors are seeing a significant increase in interest. This aligns with our strategic objective to double the contribution of industry to the economy. Currently, industry accounts for around 13 to 14 per cent of GDP, and our target is to raise this share to 35 per cent by 2030.
In terms of the number of companies and projects, the textile industry stands out. While individual textile projects may not be very large, the sector includes a wide value chain and therefore attracts many companies. The main investor nationalities in this sector are Turkish and Chinese, as they are among the largest producers globally.
These investment trends are influenced by both push and pull factors. On the push side, rising production costs and disruptions in global supply chains are driving companies to relocate. On the pull side, Egypt offers competitive advantages that attract investors. Trade tensions and global trade wars have further reinforced this trend, making Egypt a haven for many manufacturers. Egypt ranks high on the list of preferred destinations, though it is not the only option.
Each investor has specific requirements, and no country can meet all of them simultaneously. Some investors choose Morocco, for example, because it offers direct access to certain markets, such as Europe or West Africa. This does not mean Egypt is less competitive; it simply reflects different strategic needs.
In the automotive sector, while the number of investors is smaller, the scale of investment is much larger, with most investors coming from China. Automotive manufacturing extends beyond passenger cars to include buses, motorcycles, and two- and three-wheelers. Turkish, Chinese, Singaporean, and Indian companies are all closely studying the Egyptian market. These countries are among the largest producers globally and operate on a mass-production scale.
How do you see progress on the implementation of the State Ownership Policy Document?
Back in 2011, the state’s involvement in the economy was very large because there was essentially no one else to take the lead. Over time, however, the state has been gradually redefining its role, carefully managing the transition to expand private-sector participation while reducing direct state ownership.
As the economy grows, the state reduces its participation in certain areas, opening space for private investment. For example, instead of managing industrial lands directly, the state now hands them over to industrial developers. In other cases, the state reduces its role in companies or activities that no longer require full government involvement, allowing the private sector to take over at a pace aligned with market conditions.
At the same time, the state retains control over strategic sectors, such as defence and armaments, where private investment is either unsuitable or undesirable. This approach ensures that the transition is consistent with the economy’s structure and the state’s strategic objectives.
To manage this process, the Prime Minister established a dedicated unit responsible for determining which state assets to sell, how to reinvest the proceeds, and how to facilitate partnerships between the government and private sector. In parallel, the Ministry of Finance has activated and expanded Public-Private Partnerships (PPPs), enabling companies that want to operate quickly to access ready-made opportunities, collaborate with government boards, and share benefits according to mutually agreed structures. This model has grown significantly and is now a key tool for accelerating private-sector participation.
The International Monetary Fund (IMF) has repeatedly noted that progress on the sale of stakes in state-owned companies remains slow.
We design our own economic reform programme; while the IMF monitors progress, it does not dictate our strategy. Our decisions are based on what is best for the economy, not on external pressure.
Timing has also been an important consideration. In the past, direct investment and company acquisitions were difficult due to market conditions, stock market valuations, and country risk classifications. Selling state assets under such conditions would have resulted in greater discounts and lower returns. Now, as conditions improve, we can sell assets at their fair value, ensuring that privatisation achieves its intended economic impact.
Overall, the objective is clear: to reduce state ownership in non-strategic areas, expand the private sector, retain control over strategic sectors, and do so in an organised, market-sensitive way.
* A version of this article appears in print in the 25 December, 2025 edition of Al-Ahram Weekly
Short link: