How the government aided industry growth in 2024? In part I, we explored the challenges that hindered Egypt’s industrial sector, and slowed down the government’s strategy to accelerate growth. In part II of this series we’ll dive into how the government has actively supported the sector, aiming to turn Egypt into a regional industrial hub.

Shifting the industrial landscape: The new cabinet brought in a game-changing shift by separating the industrial portfolio from that of trade — a key request of industry players. Meanwhile, the reinstated Investment Ministry now oversees trade alongside local and foreign investment initiatives. This restructuring also introduced Kamel El Wazir as deputy prime minister for industrial development and industry and transport minister.

The new gov’t lays out a plan: Under its revamped agenda, the government has committed to a national strategy targeting industrial and trade competitiveness. It marked key objectives, such as achieving annual industrial output growth of 31.2% by FY 2026-27, and boosting exports to USD 130 bn by 2026-27 and to USD 145 bn by 2030.

Streamlining administrative hurdles: One of the year’s standout reforms was eliminating the need to get approvals from 23 separate entities to set up an industrial facility, with the Industrial Development Authority (IDA) now the sole entity responsible for issuing approvals.

Reopening idle factories: Additionally, the government is mulling reopening 12k stalled factories, approving immediate reopenings and waiving accumulated penalties for previously operational facilities, a government source told EnterpriseAM.

Land allocation is key: One of the main challenges facing the new government in this vein was a limited availability of affordable, serviced industrial land plots, which the government sought to address through a commitment to offering some 10 mn sqm of industrial land to investors under its plan to boost the sector in Sadat City, Borg El Arab, Sixth of October, Tenth of Ramadan, and Badr City. The IDA offered over 2.6k land plots in December, spanning 15.2 mn sqm across 37 industrial zones in 24 governorates in December.

Short on land plots? Not a problem anymore: The government has introduced verticalexpansion measures, allowing factories to construct additional floors to boost production capacity. This is proving especially useful in zones where new industrial land is limited. Meanwhile, the government is making strides in legalizing factories operating on agricultural land under the Building Reconciliation Act, a move that could ease pressure on industrial zones and create room for growth.

Cutting red tape virtually: To leverage digital transformation advantages, the government launched the new Egypt Digital Industrial Platform, allowing investors to book land, explore investment opportunities, and apply for permits — all via one online portal. The platform’s coming updates will integrate payment systems and licensing capabilities, cutting out the endless loops of traditional bureaucracy.

**We have the lowdown on the platform in Inside Industry we published in September.

Financial incentives on the table: To sweeten the deal, the government has slashed the costof land application fees by 50% to EGP 2.5k and reduced reservation deposits to just 10% of the total land value. Investors no longer need to submit bank guarantees, and a simple project summary now replaces exhaustive feasibility studies.

Momentum builds locally and internationally: These reforms are paying off — with streamlined land allocation and golden licenses on the rise, Egypt has seen significant localization wins. The country’s first shipping container manufacturing plant is officially in the works, old aluminum foil factories are being revived, and local production of routers and mobile devices is scaling up. Combined, these efforts are poised to save us hundreds of mns of USD annually in imports while positioning Egypt as a manufacturing powerhouse.

The automotive sector experienced a serious growth in local production, with local auto player El Nasr Automotive resuming operations through a partnership with Al Safi Group. Auto feeder industries are also a key target of the government’s localization push, with the state this month releasing details on a raft of tire manufacturing projects as well as a new initiative to produce EV batteries.

Foreign appetite for the auto industries: As Egypt’s industrial landscape continues to evolve, foreign companies are increasingly eyeing local manufacturing opportunities, especially in the auto industry. Among the most significant moves is the plan by Al Mansour Automotive to build a new assembly plant for traditional and electric MG cars, in partnership with China’s state-owned automotive giant SAIC. Additionally, Nissan has announced its intention to invest USD 55.9 mn in the Egyptian market until 2026, while automotive player Kasrawy Group is preparing to open a new plant for Jetour vehicles.

Investors flock to renewables: The renewable energy sector has also attracted substantial foreign investment. Polish renewables player Hynfra is planning a USD 10.6 bn green ammonia plant in Egypt. Scatec, Fertiglobe, and Orascom Construction are progressing with their green hydrogen project, while another collaboration between Orascom Construction, Engie, and Toyota will soon add another 150 MW to their 500 MW wind farm in the Gulf of Suez.

Golden licenses as a key attraction: Turkish firm Beko began constructing a home appliance factory in 10th of Ramadan City with investments exceeding USD 100 mn, securing a golden license for the project. Balkan for Food Industries was also granted a golden license in November for the establishment of a new factory in New October City to produce tomato paste and other food products.

China has the lion’s share of fresh industrial investments in Egypt: China has been a dominant force in Egypt's industrial development, with the Suez Canal Economic Zone (SCZone) leading the charge. The SCZone in April signed 14 agreements with Chinese companies, paving the way for several projects in collaboration with local private-sector players. These projects include a USD 800 mn factory for fiberglass and polyester production by Chinese synthetic fiber manufacturer Xin Feng Ming Holding in the China-Egypt TEDA trade zone in Ain Sokhna. Meanwhile, CNG Egypt New Energy Glass, a subsidiary of China National Glass Holdings, has laid the foundation for a USD 300 mn glass production facility. This plant will feature a daily output of 1k tonnes of flat glass and 800 tonnes of photovoltaic glass.

** Find the full list of foreign industrial investments in Egypt in 2024 in tomorrow's issue of EnterpriseAM Egypt.

Brics-managed NDB to play a part in the country’s industrial rise: Egypt is looking to secure a USD 1 bn — or its equivalent in another currency — soft loan from the Brics’ New Development Bank (NDB) by the beginning of 2025.

The gov’t capped 2024 off with a tax legislation overhaul: The government has introduced unprecedented tax relief measures as 2024 draws to a close, including 20 reforms aimed at resolving most of the industry’s long-standing investment challenges. The list features the resolution of tax disputes, a new tax regime for SMEs with annual revenues under EGP 15 mn, and the first-ever centralized clearance system, which will expedite payments to manufacturers by directly offsetting owed amounts against taxes and customs dues.

More pro-investment measures in the works: The Finance Ministry is gearing up to roll out another package of measures to spur investment in the country’s industrial sector, as told by Deputy Finance Minister for Tax Policies Sherif El Kilani. The new measures include exempting factories from property tax and streamlined customs processes to align with global best practices. The ministry is also reviewing temporary import permits to improve competitiveness.

The industrial sector looks set in 2025 to overcome challenges and seize new opportunities. In part III of this series, we will delve deeper into how these changes are shaping Egypt’s industrial future.

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