It’s the rare CEO that offers to be held publicly accountable — rarer still a sitting minister. But members of our community who followed his career before he entered government service some 15 months ago know that Hassan El Khatib is simply built different. El Khatib appeared on our stage at the EnterpriseAM Egypt Forum in 2024 to give us a sneak peek of an ambitious agenda for change.

One year later, he was back to answer questions about how it went and what he’s doing now to make it easier for us all to trade, do business, and invest.

In a one-on-one interview, El Khatib explained why he thinks digital transformation is the key to making it easier to do business — and position us as one of the world’s most competitive exporters and a top destination for foreign direct investment.

Digital transformation is the essential remedy for the longstanding challenge of convoluted permit processes. The private sector has to deal with some 96 agencies for permits and [registration fees],” El Khatib said. “The vision as I see it today is clear: We do not want the private sector, any company, to deal with 96 agencies. What we would want is for the business community to deal in the short term with five main agencies,” he added. Beyond the Finance Ministry, these agencies are the General Authority for Investment and Freezones (GAFI), the Industrial Development Authority (IDA), the National Telecom Regulatory Authority (NTRA), the Tourism Development Authority (TDA), and the New Urban Community Authority (NUCA).

To put the challenge into perspective, Khatib explained how starting a new factory for ready-made garments requires 24 processes, whereas kicking off a new hotel project requires 34 processes, often necessitating multiple payments for the same commercial register.

Where are we now on this? The government is executing a dual-track digital strategy, El Khatib said. The short-term goal is to channel dealings through just five key agencies. A temporary unified platform, activated by a Prime Minister directive, was launched in June. This initial platform aggregated and connected 41 agencies, and now offers 389 permits and a total of 460 services online. This digitization process required agencies to meticulously describe each service, detailing the fees and their purpose.

Looking ahead, the goal is to move from the temporary platform into a permanent state-of-the-art digital platform, El Khatib said. “I can tell you that we are in the final negotiations, I hope that within a few weeks I sign a directive for it,” he added.

No more paying twice for the same stamp: The digitization effort is coupled with a massive, focused effort to reengineer the permits process. The government is currently working with external consultants to study and reengineer processes across 275 activities. This surgical approach aims to eliminate obvious duplication, such as investors having to repeat steps or pay for the same commercial register multiple times.

Moving faster will be key: The average time for approvals handled by the Investor Service Center has been drastically reduced from 14 days down to 5.8 days, with the goal to reduce it further to two days by the end of this year, El Khatib said. Additionally, the Sovereign Unit was established to move faster on state assets, deciding which companies move to the divestiture unit or the wealth fund to maximize returns. The government is piloting this holistic, ecosystem-based approach in sectors like Tourism, covering the entire investor experience from the airport and transportation to utility services.

Trade and investment are now bound together: Egypt now aims to balance FDI and trade relationships. While historically large trading partners are in China and Asia, the focus is now on strengthening and diversifying these strategic ties. One example for this is what El khatib described as a “win-win proposition” with the EU, pushing simultaneously for trade facilitation and investment agreements. This is made possible by Egypt’s competitive advantage in energy prices compared to Europe’s — the continent’s energy rates are six times what the US pays, making Egypt an attractive destination, El Khatib explained. The same trade-investment interplay applies to collaboration with China, where manufacturing localization is key.

Our exports are growing, and there’s room for more: The Minister noted that while a 20% increase in FDI — around USD 14 bn — is achievable, he is unhappy with 25% annual export growth, aspiring instead to see it grow two, three, or four times more within three years.

Four sectors were identified as “ready for promotion” and “obvious winners” as part of an FDI strategy delivered by the World Bank in mid-December. Here’s what the minister said about some of these sectors:

#1- Textiles: The textiles sector in Egypt is growing as an attractive sector for foreign investors. For example, the cost of production in Egypt is estimated to be literally 20% of the cost in Turkey. While current exports are around USD 3 bn, capturing a larger share is an “easy target,” with the government aiming for USD 12 bn in this sector alone, El Khatib noted.

#2- Intermediate industries: While Egypt does not currently have a large automotive industry, intermediate industries like automotive business are seeing significant movement. Four companies have already signed up for this initiative, which is expected to scale up production significantly, and the government is currently courting another global player, the minister added.

#3- Tourism: The government’s approach towards tourism now is moving away from simple land approvals and focusing instead on setting concrete targets for new hotels and rooms by 2030, and developing the entire ecosystem planning, including the airport, transportation, and utility services, El Khatib explained.

Tap or click here to read the panel’s full transcript.

Tags: