Egypt has big manufacturing ambitions for El Sisi’s third term: The Madbouly government is looking to localize more manufacturing to drive more exports, with plans to set up more industrial zones for Egyptian industry during the coming six-year period. These plans are all part of a strategy to cut down on Egypt’s FX-heavy import bill, according to the Cabinet Information and Decision Support Center’s recently released report (pdf) outlining the government’s economic strategy for President Abdel Fattah El Sisi’s third term, which starts this April.

LOCALIZATION = SMALLER IMPORT BILL

A bigger role for manufacturing in Egypt’s economic activity: The government is looking to bring up the overall contribution of “transformative industries” to 20% of total GDP, worth EGP 2.7 tn. It also wants manufacturing to hit an annual growth rate of 20% in 2030.

And more local component contributions: The plan hinges on deepening and localizing the local manufacturing industry, as it aims to raise the percentage of local components used in manufacturing to no less than 60% by 2030, eyeing an average range of 60-80%.

The goal? More exporting, less importing: The government aims to increase the growth rate of exports of manufactured goods to at least 20% annually until the end of the decade, and is placing a particular emphasis on specific sectors such as the pharma and automotive industries, as it looks to become a major regional exporter in these sectors.

Egypt wants to be a big regional player in the automotive sector: Egypt is looking to manufacture between 400-500k cars annually, with a particular focus on electric vehicles (EVs), and wants to increase its manufacturing of other vehicles including buses and tow trucks — a quarter of which will be allocated towards the country’s exports by 2030. This falls under Egypt’s yet-to-be-launched automotive strategy, the Automotive Industry Development Program, which is set to provide incentives to carmakers in a bid to increase local assembly and component manufacturing here, up the sector’s competitiveness to become a regional manufacturing hub, and bolster export volumes. Implementing the program and becoming a regional export hub would save the country USD 4 bn a year, according to the report.

In the short term: The government wants to increase manufacturing investments by 21% to reach EGP 101 bn, which contributes to generating an overall industrial output of about EGP 393 bn. It has also been planning to launch 152 potential investment projects in the sector with the goal of strengthening local manufacturing to plug the import gap that is estimated to be around USD 30 bn. The government plans to include these projects in the Industrial Development Authority’s investment map, which it wants to turn into a detailed and dynamic map for priority sectors using a GPS system in 2024. It did not specify which projects it aims to focus on at this time, or when these goals are to be met.

Other manufacturing goals:

  • Pharma exports to receive a boost: The government aims to increase overall pharmaceutical exports to USD 5 bn by the end of the decade.
  • Increasing Egypt’s benefit from its mineral and quarry wealth, with the aim of reducing the import bill by at least USD 25 bn.
  • We’re looking to export USD 20 bn to Africa alone by 2030.

BIGGER, BETTER INDUSTRIAL ZONES

Egypt will nearly double its industrial zones by the end of the decade, with plans to have 32 industrial zones by 2030, up from 17 in 2023. The plan includes setting up seven new zones between 2023-2024.

The current layout of industrial zones: There are industrial zones across the country in different governorates, including Abu Rawash in Giza, Al Mahalla in Gharbia, Ataka in Suez, Mut Al Dakhla and Al Kharga in the New Valley, Al Kawthar and Tahta in Sohag, and Rubiky in Cairo. Qalyubia, Beheira, Aswan, Menoufia, Ismailia, Marsa Matrouh, Alexandria, Kafr El Sheikh, Port Said, and North Sinai also host several industrial zones, according to the Trade and Industry Ministry website.

The priorities: The industrial zone in Rubiky for leather tanning is a top priority, along with completing the facilities of the industrial zones in Sohag and raising the operating efficiency of the industrial zones in Sohag and Qena. The government also wants to continue to modernize the infrastructure of a number of industrial zones, including the Industrial Plastic Factory in Margham in Amriya, Damietta Furniture City and the Textile Industries Zone in Mahalla El Kobra and Kafr El Dawwar.

Your top industrial development stories for the week:

  • Upskilling workers for int’l labor markets: The Madbouly government wants to provide specialized training programs in order to help 1 mn Egyptians access labor markets in developed countries by 2030, a report from the Cabinet Information and Decision Support Center said. (Cabinet statement)
  • Tarboul is getting an EV factory: Russian EV manufacturer Concordia is setting up an electric vehicle components factory in GV Investments’s Tarboul industrial project in Giza.
  • Production at Ecab’s Saudi facility set to kick off by mid-2024: Local cable manufacturer Ecab plans to begin operations at its USD 10 mn Saudi facility by mid-2024.
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