The government’s new Entrepreneurship Ministerial Committee has big plans in store: The recently formed Entrepreneurship Ministerial Committee has announced ambitious plans to increase investments in Egypt’s startups tenfold to USD 5 bn in the coming period. But how exactly does the government plan to reach this lofty goal? EnterpriseAM spoke with Planning, Economic Development, and International Cooperation Minister Rania Al Mashat who serves as the committee head to get the inside scoop on how the committee will work as the government executes its plan to position Egypt as a regional startup hub.

It’s the right time to double down on startups: Entrepreneurship is witnessing significant growth globally, with the startup ecosystem representing a promising sector for our future economic growth, Prime Minister Mostafa Madbouly said during a recent meeting with representatives of ten local startups. Madbouly noted that Egypt’s relatively youthful population is a key asset in this field, adding that the government is committed to translating the sector’s potential into economic growth through “robust support.”

THE DETAILS-

The committee aims to strengthen the startup ecosystem: Among the committee’s primary goals is strengthening the capacity of startups and the overall entrepreneurial climate, with an eye toward spurring sustainable growth and generating a greater number of high-quality jobs, Al Mashat told us. The committee will also be responsible for maximizing the local economy's benefit from startups, helping startups access international markets, linking sectors facing pressing challenges with innovative solutions from local startups, and reducing brain drain, she added. Additionally, the committee will be tasked with studying international entrepreneurship best-practices to be applied in line with the needs of the Egyptian market, Al Mashat noted.

The committee also plans to place a particular emphasis on youth and women in rural and underdeveloped areas, linking pressing challenges in these areas with innovative solutions offered by local entrepreneurs, Al Mashat said.

The nuts and bolts: The committee will be headed by the Planning and International Cooperation Ministry and includes members from the CIT, higher education, finance, supply, investment, and industry ministries, as well as the head of the Micro, Small, and Medium Enterprises Development Agency (MSMEDA) and representatives from the Central Bank of Egypt and the Financial Regulatory Authority (FRA). The committee’s technical secretariat was formed last month, and is jointly headed by the Planning Ministry and the General Authority for Investment and Freezones (GAFI). The group has also set up four specialized working groups focused on developing policy frameworks and accessing funding, managing startup initiatives and project coordination, ensuring global market access while retaining local talent, and finding solutions to sector challenges. A possible merger with the cabinet’s permanent entrepreneurship unit could also be on the cards, Al Mashat added.

The committee has also established a set of short-, medium-, and long-term goals, including:

  • In the short term, agreeing on a plan of action, activating legislation related to the sector, and addressing information gaps;
  • In the medium term, coordinating government initiatives, focusing on specific sectors to maximize available resources, and facilitating government procedures for entrepreneurs;
  • In the long term, greatly increasing available jobs and boosting the number of Egyptian firms that achieve unicorn status, which will contribute to the growth of the Egyptian economy.

Startup players are getting their say: The committee has also received some 433 recommendations on improving Egypt’s entrepreneurship ecosystem, according to Al Mashat.

A CLOSER LOOK AT THE COMMITTEE’S EARLY INITIATIVES-

#1- A charter for Egypt’s startup community: A startup charter is currently being developed that will serve as a practical roadmap for defining what a startup is and supporting their growth and sustainability, Al Mashat said.

#2- A coordination framework for the sector: The ministerial group will issue a coordination framework that will include mechanisms for implementation, following up on progress, initiating cross-ministerial projects, and ensuring alignment of government activities to avoid conflicts between policies and legislation.

#3- Incentives for investors: The committee is currently developing tax exemptions and revising laws to ensure that they are in line with international standards and startups’ needs, Al Mashat said. It’s also activating incentives to encourage investments by major companies, whether directly or through VC funds.

#4- Measures to ease market entry and support int’l expansion: The group is also studying existing legislation in order to identify what laws require revision in order to encourage market entry, particularly with regard to business setup regulations and tax laws. The committee is also studying the creation of new legal frameworks to facilitate startups' entry into international markets, Al Mashat added.

#5- Learning from past initiatives: The group will look at previous programs and initiatives designed to help startups in order to design new programs and initiatives that effectively respond to their current needs, Al Mashat said.

THE ROAD AHEAD-

Egypt also has all the tools needed to become a magnet for startup investment funds from the MENA region, particularly if measures to increase competitiveness, drive investments, and simplify procedures are implemented, sector players have told Al Mashat.

Still, several challenges remain: The relocation of homegrown startups and entrepreneurs to locations outside Egypt is one of the most prominent challenges facing the sector, along with legislative and legal hurdles and financial and tech support issues, Al Mashat told EnterpriseAM.

Development partners will have a key role to play: Whether through financing or investments and technical support, development partners have a pivotal role to play in supporting startups, Al Mashat told us. She noted that Egypt has many constructive partnership models with international entities, and that the committee aims to benefit from international partners that can provide startups with access to international markets.

Sector players are optimistic, with a number of sector insiders noting that the formation of the specialized ministerial group for entrepreneurship is a positive indicator of the government’s direction with regard to empowering startups (watch, runtime: 9:52).

Tags: