Egypt
Factual Figures .............................................................................................................. 2
Overview ........................................................................................................................... 2
Economy ............................................................................................................................ 2
Banking & Finance ...................................................................................................... 4
Construction ................................................................................................................... 4
Micro, Small and Medium Sized Businesses ................................................ 5
Agriculture ....................................................................................................................... 6
UK-Egypt Links .............................................................................................................. 6
Useful Contacts
Ministries ............................................................................................................ 7
Embassies ........................................................................................................... 8
Government Agencies ................................................................................. 8
Chambers of Commerce ............................................................................. 9
Other Business Links ................................................................................... 9
1
Factual Figures
Official Name:
Capital:
Land Area:
Population:
Official Language:
Currency:
GDP Growth:
Main Industries:
Exports:
Imports:
Arab Republic of Egypt
Cairo
1,001,450 km 2
82 million (2011 est.)
Arabic
Egyptian Pound (EGP)
5.3% (2010)
Textiles,
food
processing,
tourism,
chemicals,
pharmaceuticals, hydrocarbons, construction, cement,
metals and light manufactures
Crude oil and petroleum products, cotton, textiles, metal
products, chemicals, processed food
Machinery and equipment, foodstuffs, chemicals, wood
products and fuels
Overview
Egypt enjoys a strategic position in the heart of the Middle East and North Africa
with sea ports scattered over the Mediterranean, Red Sea and Suez Canal. The
country is a hub for international trade between Europe and Middle & Far East.
Suez links the Red Sea to the Mediterranean and is a vital global transit route.
Egypt is an attractive location for foreign companies keen to expand their
business in the region and generally has a stable environment with regards to
infrastructure, climate, costs, language and geographical location. Egypt is
emerging from a period of unrest and uncertainty at the start of 2011, but can
look forward to capitalising on its inherent economic strengths in the future. The
economy is one of the most diversified in the Arab World. It is the fourth largest
Arab economy after Saudi Arabia, the UAE and Algeria. The country’s key sources
of income remain the tourism sector, revenues from the Suez Canal and
remittances sent home by Egyptians living abroad.
Economy
As Masood Ahmed, Director of the IMF’s Middle East and Central Asia
Department, commented in February 2011, “The recent popular protests and the
associated political uncertainty will have a negative economic impact in the short
run, but over the longer term they can position Egypt to better exploit its
potential to achieve higher standards of living and employment for all sections of
its population.” The IMF expected growth to take a hit in 2011, falling below the
5.5% rate registered in the most recent two quarters, as tourism and foreign
investment decline. The budget deficit, already high, is likely to increase with
lower economic activity, higher food prices, higher interest rates, and any new
spending initiatives. Finally, unemployment has long been high—and especially so
among the youth at 25%—and it could worsen in 2011 with lower economic
activity.
Another prediction suggests that GDP growth could slow to 2% in 2011, according
to the country’s biggest publicly traded investment bank, EFG-Hermes. “We
expect GDP growth will go down to 2 or 3 percent this year,” Yasser El
Mallawany, co-chief executive officer of EFG- Hermes Holding SAE, said. “These
are very tough times.” El Mallawany was speaking in London at EFG’s annual
Egypt Capital Markets conference, which took place in March. GDP increased
16.2% in the previous year, according to data compiled by Bloomberg.
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Ahmed, however, stressed that it was important to recognise that “greater
transparency, competition and a broader ownership of the national economic
reform agenda should enable Egypt to tackle some of the constraints that have
held back an inclusive and sustainable improvement in living standards”. This will
then leverage the country’s inherent strengths: a dynamic and young population,
a large domestic market, access to key markets, a privileged geographic position,
a strong financial sector, and a comfortable level of reserves.
The protests and uncertainty had a serious, if temporary, impact on the country’s
important tourism industry, one of Egypt’s key revenue generators. Britain
accounted for the highest number of tourists visiting Egypt from Europe in 2010,
according to official statistics. Germany, Italy and France followed Britain. The
total number of tourists visiting Egypt increased by 17.5% in 2010, a report by
the country’s Central Agency for Public Mobilisation and Statistics (CAMPAS). Its
statistics for 2010 said 14.73 million tourists visited the country in 2010,
compared to 12.53 million in 2009, according to media reports. The majority of
tourists came from the European Union countries, comprising 44% of the total,
while Eastern Europe represented 31.3%, 12% came from other Middle East,
3.3% from Africa, and 3.1% from North America. The report also said most Arab
tourists came from Libya, followed by Saudi Arabia, Sudan, Palestine and Jordan.
Egypt is spending $400m on the renovation of terminal two at Cairo International
Airport. The work on the project is to involve the upgrading of the existing
passenger terminal to enable it to handle up to 7.5 million passengers a year.
This will be more than double the current capacity of 3.5 million passengers. The
project also involves building a new departure hall and airside pier, as well as the
construction of larger gates to accommodate Airbus A380 aircraft. The World
Bank has approved a $280m loan to help finance the project.
The country has the largest population in the Arab world and this is growing
rapidly. The population factor is an important influence on the investment
potential as there is a huge domestic market for goods and services. Strong
growth in the pharmaceutical market is increasingly attractive to business,
according to a report from BMI Research and Markets. Egypt is identified as one
of the key emerging markets after the BRIC countries and its total pharmaceutical
spending reached EGP13.75bn ($2.48bn) in 2009. This is expected to continue
growing steadily over the next decade. The market value, measured at consumer
prices, is expected to reach EGP23.31bn ($5.07bn) by 2014, posting a strong
11.13% compound annual growth rate in local currency terms.
Egypt has been focussing on developing its industrial potential as the prime
engine for economic expansion and to generate much needed employment
opportunities. Egypt is seeking to capitalise on is strengths which include its
abundance of raw materials, cheap and easily accessible energy supplies and
abundant skilled and low-cost human resources. In addition, the country’s close
proximity to Europe gives it a significant advantage in terms of transportation
costs.
An industrial development strategy drawn up by the Ministry of Trade and
Industry in 2006 identified six key industrial activities where Egypt has a
competitive edge: engineering, machinery and equipment; consumer electronics;
automotive components; life sciences; biotechnology and handicrafts.
The pick up in the Egyptian economy since the global downturn offers “more than
a glimmer of hope”, Oxford Business Group said in its 2010 country report.
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The economy has been stimulated by more than five years of tariff cuts, sale of
state companies, the liberalisation of investment regulations, among other
reforms.
GDP grew by 4.7% in 2008-2009, a slowdown on the previous three years, but
the economy has steered its way through the global downturn relatively
unscathed.
The textiles industry, one of Egypt’s traditional activities, entered a new phase of
growth benefiting from trade agreements signed with the European Union and the
US. The industry is undergoing a process of modernisation as it gears up to face
the challenge from cheaper Chinese competition. The industry is fully integrated
ranging from the cultivation of cotton to the production of finished quality
garments, a substantial proportion of which is made for export.
The economic downturn experienced in Egypt’s largest export markets in 2009
led to a decline in the country’s exports for that year. Since then, however, a
recovery has got under way and Egypt can expect to see exports rising again as
global markets emerge from the financial crisis and its economic activity revives
after the period of unrest.
Banking and Finance
The country’s banking sector remained solid, institutions were not highly
leveraged and there were no major imbalances. The impact of the global
downturn proved to be most obvious on those sectors that were most reliant on
foreign demand such as tourism and Suez Canal revenues. Meanwhile, Egypt's
stock market re-opened in March 2011 after a shutdown of more than seven
weeks following the unrest, and resumed its normal four-hour trading on Sunday
3rd April, a bourse official said.
Several sectors in the Egyptian economy maintained high growth during the
period 2008-2009 led by ICT reaching 15%, followed by construction at 14.6%
and trade at 6.2%. The energy sector has been realigning itself as the production
of gas eclipse oil. Furthermore, Egypt is also giving greater attention to
renewable energy with solar thermal plants considered for the deserts along with
wind farms. The aim is to generate 20% of required power from renewables by
2020.
Construction
Egypt experienced healthy growth in the construction sector in recent years
where activity has been encouraged by investment in some major infrastructure
projects whose completion has been boosted by financing from institutions like
the World Bank and the African Development Bank.
Projects that have received support include a solar power plant and a new
wastewater facility. As building growth continued Egypt has sought to keep costs
down and prevent property values from rising too high. In response, the Ministry
of Trade and Industry banned the export of cement in April 2009. Exports
amounted to 13% of the total production in 2007-2008.
Egypt has been drawing in finance into a number of sectors and private equity
firms from the Gulf in particular have been a significant factor entering the
market. Equity firms have also been attracted by Egypt’s steady economic
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growth, the diverse pool of companies operating in the country and its liquid
capital markets.
Between 2005 and 2009, Egypt attracted the largest number of private equity
investments in the MENA region, according to Kuwait’s Global Investment House
with 20% of the total which was worth approximately $2.5bn. Egypt has been
successful in drawing in foreign direct investment over recent years. FDI stood at
around $8bn in 2008-2009, although this represented a fall on the $10bn average
that was recorded over the previous four years.
The bulk of investment was directed at non-greenfield investments, which will
continue to be the focus in the future, rather than sale of state-owned assets.
Egypt has placed strong emphasis on the promotion of public-private partnership
projects, including infrastructure initiatives such as water sewage treatment
plants and Nile river transport.
Egyptian ministers have singled out for special mention the development of
container ports projects on the Red Sea coast, and the construction of the Upper
Egypt-Red Sea road, as key to reviving industrial zones and activity in Upper
Egypt.
Egypt has inaugurated the third phase of a container terminal at the East Port
Said port. There are also plans to establish a new container terminal port of
Safaga at an investment cost of $200mn.
Early in 2009, Egypt doubled its economic stimulus plan to $5.4bn which
allocated funds mostly for spending on new infrastructure projects in an effort to
stimulate the economy, create jobs and to maintain the current levels of
investments in industry and trade.
In a report published by the Egyptian Centre for Economic Studies, Omneia
Helmy, deputy director, discusses the importance of logistics reform in improving
the competiveness of fruits and vegetable exports, one of Egypt's most important
exports to the EU market. "If Egypt manages to reduce the costs of transport and
related logistics services by establishing highly efficient ports and a competitive
shipping services industry, the cost competitiveness of its fruit and vegetable
supply would improve," writes Helmy.
"By enhancing the efficiency of transport and related logistics services, Egypt
could become an important player in the logistical organization and in distributing
fresh and processed fruits and vegetables to the EU market," Helmy concludes.
Meanwhile, the latest Economist Intelligence Unit Country Report published in
June 2010, states: "The government's fiscal stimulus packages, aimed
particularly at spending on infrastructure, will continue to offset some of the
negative effects of the slowdown on the manufacturing sector and employment,
and will help to sustain investment and household demand."
Micro, Small and Medium Sized Businesses
Turning to the role of micro, small and medium sized businesses in the country;
traditionally, the small business sector has played a vital part in Egyptian society
and made an important contribution to the country’s economy. Small firms, many
family-owned enterprises, are very active in areas such as wholesale, retail,
vehicle maintenance and manufacturing. They contribute 80% of total output;
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they provide 75% of all private sector employment and 99% of non-agricultural
sector employment, according to OBG.
Measures have been adopted to encourage small businesses to grow and flourish
in recognition of the obstacles that they face in their need for credit, finding
access to finance and business know-how.
In a bid to tap into a potentially lucrative market, Egypt’s banks have been
encouraged to provide services to assist SMEs and leading banks now offer
packages of banking services specifically designed to meet the needs of small
business customers.
Agriculture
The important agricultural sector offers significant opportunities for foreign
investors with several incentives available such as a ten-year tax exemption, free
access to irrigation water and subsidised energy.
Specific areas where opportunities for investors should be highlighted include the
reclamation and cultivation of land; plant production; animals, poultry and fish
production; fertilisers; agro-processing and post-harvest activities; methanol
production; recycling; agricultural research; and marketing of agricultural
products. The export of Scottish seed potatoes to Egypt have soared, latest
figures show.
Mark Prentice, head of seed and exports with the Potato Council, confirmed in
March 2011 that exports this season ended up at 39,961 tonnes, which was
almost double the export figure of only five years ago and almost 10,000 tonnes
above the previous year's total.
UK-Egypt Links
Bilateral trade between the UK and Egypt is now worth £3 billion per year, with
the UK’s export of goods reaching £1bn for the first time in 2010. The UK is the
largest non-Arab investor in Egypt. There are over 900 British companies in the
country operating in sectors ranging from oil & gas to education.
While trade was negatively affected during the recent revolution, analysts predict
it will significantly improve in the longer term, owing to increased transparency
and fairness. The amount of investment in Egypt is testimony to the UK’s deep
commitment and enduring relationship with the Egyptian market.
Shortly after the removal of former President Mubarak, the UK Prime Minister
David Cameron and Lord Green, Minster of State for Trade and Investment, flew
to Egypt to discuss future relations. Among the delegation were prominent British
representatives from a variety of industries such as oil & gas, retail,
infrastructure, education, engineering, healthcare and construction. Such
industries are flourishing in the country and sizeable investments show great
promise.
The investments need to continue and are more vital now than ever before in
assisting Egypt make the smooth transition towards a more transparent
democracy.
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Useful Contacts
MINISTRIES
Prime Minister:
Deputy Prime Ministers:
Dr. Essam Sharaf
Dr. Ali Mohamed Abdel Hafiz Al-Selmy
Dr. Hazem Abdel Aziz Mohamed El-Beblawy
Ministry of Agriculture and Land Reclamation
Minister: Dr. Salah Al-Sayed Youssef Farag
Website: www.agr-egypt.gov.eg
Ministry of Civil Aviation
Minister: Mr. Loutfy Moustafa Kamal Tawfik
Website: www.civilaviation.gov.eg
Ministry of Communications and Information
Technology
Minister: Dr. Mohamed Abdel Qader Salim
Website: www.mcit.gov.eg
Ministry of Culture
Minister: Dr. Emad Badr El-Din Abu Ghazy
Website: www.ecm.gov.eg
Ministry of Education
Minister: Dr. Ahmed Gamal El-Din Moussa
Website: www.emoe.org
Ministry of Electricity and Energy
Minister: Dr. Hassan Ahmed Younis
www.moee.gov.eg
Ministry of Environment Affairs
Minister: Eng. Maged George Elias Ghatas
Website: www.eeaa.gov.eg
Ministry of Finance
Minister: Dr. Hazem Abdel Aziz El-Beblawy
Website: www.mof.gov.eg
Ministry of Foreign Affairs
Minister: Ambassador Mohamed Kamel Ali Amr
Website: www.mfa.gov.eg
Ministry of Health and Population
Minister: Dr. Amr Mohamed Helmy
Website: www.mohp.gov.eg
Ministry of Housing, Utilities and Urban
Development
Minister: Dr. Mohamed Fathy Abdel El-Baradei
Website: www.moh.gov.eg
Ministry of Interior
Minister: Mr. Mansour Abdel Kerim Essawy
Website: www.moiegypt.gov.eg
Ministry of Investment
Website: www.investment.gov.eg
Ministry of Justice
Minister: Counselor Mohamed Abdel Aziz El-Gendy
Website: www.moj.gov.eg
Ministry of Local Development
Minister: Dr. Mohamed Ahmed Atyia Ibrahim
Website: www.mold.gov.eg
Ministry of Manpower and Migration
Minister: Dr. Ahmed Hassan Al-Boraei
Website: www.manpower.gov.eg
Ministry of Petroleum and Metallurgical Wealth
Minister: Eng. Mohamed Abdalla Ghorab
Website: www.petroleum.gov.eg
Ministry of Planning and International
Cooperation
Minister: Mrs. Fayza Mohamed Aboulnaga
Website: www.mic.gov.eg
Ministry of Religious Endowment
Minister: Dr. Mohamed Abdel Fadil El-Qousy
Website: www.awkaf.org
Ministry of Scientific Research, Science and
Technology
Minister: Dr. Moataz Mohamed Hosni Khorshid
Website: www.egy-mhe.gov.eg
Ministry of Social Solidarity
Minister: Dr. Gouda Abdel Khalek Mohamed
Website: www.mss.gov.eg
Ministry of Tourism
Minister: Mr. Mounir Fakhry Abdel Nour
Website: www.egypt.travel
Ministry of Trade and Industry
Minister: Dr. Mahmoud Abdel Al-Rahman Eissa
Website: www.mti.gov.eg
Ministry of Transportation
Minister: Dr. Ali Zein Al-Abdeen Salim
Website: www.mot.gov.eg
Ministry of Water Resources and Irrigation
Minister: Dr. Hesham Mohamed Qandil
Website: www.mwri.gov.eg
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EMBASSIES
⋅
British Embassy Cairo
Trade & Investment Department
3 Mina Street,
Kafr Abdou
Roushdy
Alexandria
Tel:
(+203) 5467001 / 2
(+203) 5467171
Fax:
(+203) 5467177
Email:
alexacom.alexandria@fco.gov.uk
Website:
britconsul@dataxprs.com.eg
⋅
British Embassy
7 Ahmed Rageb Street
Garden City
Cairo
Tel:
+202 7940852 – 8
Fax:
+202 7940859
+202 794 3065
Email:
info@britishembassy.org.eg
⋅
Embassy of the Arab Republic of Egypt
26 South Street
London
W1K 1DW
⋅
Egyptian Consulate
2 Lowndes St
London SW1X 9ET
Tel:
020 7235 9777
Fax:
020 7235 5684
Website:
www.egyptianconsulate.co.uk
GOVERNMENT AGENCIES
⋅
Christine Malak
UK Trade & Investment
British Embassy Cairo
Email:
christine.malak@fco.gov.uk
⋅
Sandrine Jayet
Country Manager for Egypt
UKTI
Kingsgate House
66-74 Victoria Street
London
SW1E 6SW
Tel:
020 7215 4947
Email:
sandrine.jayet@ukti.gsi.gov.uk
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CHAMBERS OF COMMERCE
⋅
Egyptian British Chamber of Commerce
299 Oxford Street
London
W1C 2DZ
Tel:
020 7499 3100
Website:
www.theebcc.com/contact_ebcc
⋅
Federation of Egyptian Chambers of Commerce
4 El Falaki Square
Downtown
Cairo
Tel:
+202 2795 1136
+202 2795 6066
Fax:
+202 2794 38001
⋅
Cairo Chamber of Commerce
4 Midan El Falaki
Cairo
Tel:
+202 355 8261 / 2
Fax:
+202 356 3603
⋅
Alexandria Chamber of Commerce
31 El Ghorfa El Togarya Street
Raml Station
Alexandria
Tel:
+203 483 7788
Fax:
+203 487 9771
OTHER BUSINESS LINKS
⋅
Egyptian Export Promotion Centre
Fairs Ground - Gate 6
Nasr City
Cairo
Email:
egexport1@idsc.gov.eg
Website:
www.expolink.org.eg
⋅
Central Bank of Egypt
54 El-Gomhoreya Street
PO Box 11511
Cairo
Email:
info@cbe.org.eg
Website:
www.cbe.org.eg
⋅
The Egyptian Exchange (EGX)
4A, El Sherifien St
PO Box 11513
Downtown Cairo
Tel:
(202) 23928698 / 23921402 / 23921447
Website:
www.egyptse.com
⋅
Egyptian Government Services Portal
Website:
www.egypt.gov.eg
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