We’re getting a new cabinet — what’s on the industrial sector’s wishlist? Ever since President Abdel Fattah El Sisi tasked Moustafa Madbouly with forming a new government earlier this month, all eyes have been on the cabinet’s coveted economic appointments. As we all await the big reveal, what is industry hoping for from the next government?

Enterprise spoke with several industry players, who shed light on what areas the government should prioritize amid ongoing global and regional challenges impacting Egyptian industry.

Reducing production and financing costs: Among the foremost priorities of the new government should be significantly reducing bank financing costs, particularly given recent interest rate increases. Sector players speaking to Enterprise emphasized that the Finance Ministry’s EGP 120 bn initiative for financing agriculture and industry, which is currently set at an interest rate of 15%, is quite high, and pointed out that returning to an 8% level would provide significant incentive for industrial investment.

Prioritizing local inputs: Granting preferences to domestically manufactured products will increase local component ratios and reduce imports. Emphasis should be placed on raw material manufacturing and heavy industry, according to Mohamed El Mohandes, head of the Chamber of Engineering Industries. El Mohandes also called for state support and intervention to provide raw materials and effectively manage mineral resources alongside the private sector. A national program of this kind will enhance competitiveness, boost production, and reduce FX spending on industrial imports while helping create quality local alternatives at lower costs, El Mohandes said.

Standalone industry and investment ministries: Sector players believe that separating the industrial and foreign trade portfolios, which are currently combined under the umbrella of the Trade and Industry Ministry, should be a priority area for the new government. Such a move would refocus industry as a key driver of growth, according to Mohamed El Bahey, a member of the Federation of Industries, and Tarek Al Gioshy, a member of the Chamber of Metallurgical Industries. Al Gioshy additionally emphasized that while the creation of a separate ministry would allow it to focus on localizing production, the foreign trade portfolio remains crucial for reaping the benefits of industrial development. Wafi Abu Samra, a member of the Giza Chamber of Commerce’s electrical appliances division, also proposed the reinstatement of the Investment Ministry as an alternative to the General Authority for Investment and Free Zones (GAFI), saying that a dedicated ministry would be better suited to managing investments, overcoming obstacles to investment, and attracting FDI.

Lowering energy prices for industry: One of industry’s most pressing concerns is reducing production costs to assure local and global competitiveness, said Al Gioshy, who emphasized that natural gas pricing for industry needs to be reconsidered to support product competitiveness. Ahmed El Zayat, a member of the Businessmen’s Association, pointed out that while Egypt’s energy costs are low compared to other countries, industry currently requires more support to reduce production costs and increase exports.

Reducing red tape and supporting exports: The industry would like to see the incoming government simplify procedures, remove licenses and reduce their costs, intensify external promotion efforts to boost FDI, support efforts to increase exports, activate the current export support program, and expedite the payment of late dues, said Abu Samra.

Incorporating the informal economy: According to Bassim Youssef, a member of the Chamber of Engineering Industries, incentives should be put in place to protect manufacturers that comply with government rules and regulations from competition with non-compliant manufacturers, whose lower costs often make them more attractive to potential clients.

Revising regulations and harmonizing legislation: Sector players are calling for the government to issue a unified industrial law, said Matta Beshay, head of the Internal Trade and Supply Committee at the General Federation of Chambers of Commerce. A reformulation of governing procedures will encourage partnerships between local producers and investors that will enhance product quality and facilitate penetration into foreign markets, Beshay added. Al Gioshy also emphasized that industrial regulations require review, particularly in light of the inconsistencies between different laws and ministerial decisions governing the sector. Compliance with international legislation and best practices is important in this regard, said Al Gioshy.

Managing the exchange rate and ensuring USD availability: The government should target a reasonable exchange rate by strengthening the currency and attracting investment, said Abu Samra, adding that a stable exchange rate would, in turn, help control inflation and lower production costs. Reforming production structures and addressing trade imbalances would also go some ways toward achieving an exchange rate commensurate with the current and future capabilities of the Egyptian economy, said Abu Samra. Al Gioshy called for the government to guarantee industry’s USD requirements to avoid future shortages that could affect production levels.

Reopening closed factories and encouraging small factories to produce: Supporting productive small industries and their presence around larger factories will spur integration and nurture feeder industries, in addition to addressing the issue of factories that have stopped production or never started despite significant capital expenditure, said El Bahey.

Stabilizing tax policy: El Bahey stressed the need for tax policy stability, arguing that reducing procedures and ensuring their flexibility would push the sector towards accelerated growth rates.

Providing facilitated industrial land through flexible pricing mechanisms: Also on the industrial sector’s wishlist is more facilitated industrial land at low prices to remedy the supply gap in industrial areas, said Samir Aref, head of the Tenth of Ramadan City Investors Association in previous statements to Enterprise.

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