The Egyptian Economy Sufferings
The Egyptian economy has undergone a series of fiscal and monetary reforms over the past years, resulting in substantial improvements in macroeconomic indicators. However, still deeper structural reforms are necessary to improve the overall economic situation. If Egypt is to make a full recovery, it needs to adopt policies that structurally reform the economy, improve the business climate, support the private sector, and reprioritize government spending. Implementation is already underway. Many of the designed programs are off the ground, and more will be forthcoming.
Egyptian Economic Conference (EEC) 2022
Egyptian Economic Conference 2022 came amid one of the worst global economic crises in 80 years, and was centered around the theme: “a roadmap to a more competitive economy”. The conference included 3 main tracks:
• Macroeconomic policies
• Private Sector Empowerment
• An economic roadmap for the Egyptian economic priorities in the coming stage
What Does the National Industry Strategy Entail to Lift the Egyptian Economy?
Egypt’s industrial development strategy is mainly about achieving higher growth in industrial production through an aggressive utilization of export development and FDI attraction where both are vehicles for deepening Egypt’s regional and global integration drive. The Minister of Trade and Industry has presented the strategy for developing the Egyptian industrial sector in the form of 4 main pillars:
Milestones and KPIs concerning Industrial Development
- Attracting USD 40 bn in FDI over the next 4 years through privatization policies
- Defining Egypt as the main gateway for emerging automotive markets in Africa
- Empowering the Egyptian Competition Authority to take more proactive measures toward reducing market barriers and boosting competitive neutrality
- Boosting exports and reducing the gap between exports and imports while increasing the share of exports with complex technological features to more than 20%.
- Increasing the percentage of the productive sectors’ contributions to the growth to 35% by the fiscal year of 2023-24 from 26% in 2019/2020.
Import Substitution Strategy
Encouraging local production doesn’t necessarily dictate import substitution. It’s better for a country to produce where it has a competitive advantage, thus increasing exports and bringing in foreign currency. Putting the emphasis on liberalizing imports should be at the heart of Egypt’s development strategy. That should foster the development of a productive sector and be a good base for promoting exports. Egypt’s balance of trade problems lies not only in the volume of imports but rather in the below-par volume coupled with the complexity of exports, where more than half of exports are primary commodities as for the finished goods, they rely on inputs from other countries.
The government signaled its focus on growing local manufacturing to limit Egypt’s imports. On the export side of the equation, Egypt is aiming to increase exports to USD 100 bn a year by 2025 as part of the government’s plan to increase the private sector’s role in the economy. Out of >6.8k import categories, the ministry shortlisted 4.8k industrial categories that are viable for local manufacturing. These industrial categories cost us USD 60 bn in 2019 — or 85% of the year’s total import bill (USD 72 bn). The government is targeting 9 industries ((الصناعات المغذية that have a combined 141 product categories under their umbrella which together accounted for 23% of our 2019 import bill. These industries include The chemicals industry, the engineering industry, the building materials & metallurgical industry, the pharmaceuticals and medical equipment industry, the food and agriculture industry, the wood & furniture industry, the printing and packaging industry, and the textiles industry