Saturday,18 November, 2017
Current issue | Issue 1368, (9 - 15 November 2017)
Saturday,18 November, 2017
Issue 1368, (9 - 15 November 2017)

Ahram Weekly

Mapping investment

The success of a new map of industrial investment needs in Egypt will depend on how it is implemented on the ground, writes Nesma Nowar

The map aims to reduce imports and fill market gaps
The map aims to reduce imports and fill market gaps

In its latest efforts to ramp up investment in the country, Egypt’s Ministry of Trade has recently launched an interactive map of industrial investment that shows the opportunities currently available across Egypt. 

The map includes 4,136 investment opportunities in eight industrial sectors in 27 governorates. The coastal city of Alexandria topped the governorates in terms of investment openings available, with 205 opportunities, followed by Menoufeya (196), Beni Sweif (196) and Minya (190). 

The map gives information on industrial zones in each governorate, their resources, the existing projects and available industrial projects in detail. Investors will also find data on size, population, unemployment and poverty rates, as well as the GDP of each governorate.

Most of the projects are in the field of equipment and engineering manufacturing with 1,265 projects, followed by chemical industries with 861. The map is also promoting 649 food-industry projects, 605 textile projects, 395 metallurgy investments, 183 pharmaceutical plants, 122 mining-related projects and 56 leather and tannery works.

These projects are set to provide 300,000 direct jobs, in addition to more indirect ones. The aim of the map is to define the complementary and feeding industries needed for local industry and connect them with existing industries in order to reduce imports and fill market gaps. This will also boost the added value of the country’s exports as the local component in manufacturing will increase.  

Minister of Trade Tarek Kabil said the map was “the first of its kind in Egypt”. Opportunities for small- and medium-sized enterprises (SMEs) make up a whopping 92 per cent of all industrial projects on the map, he said. 

Sultan Al-Siman, deputy head of the Sohag Investors Association in Upper Egypt, said that investors had been demanding a similar map, saying that it was a good start that would guide investors to the projects needed in each governorate.

However, the map would need to be constantly upgraded and the data made as precise as possible, he said. 

He added that one possible problem was that the map lacked information about existing projects and that it did not show the working capacities of them. Some factories in the Sohag governorate were not operating at full capacity because of problems including financing, for example.

“Why should I invest in a carton factory, when there is an already existing one that can meet demand if operated at full capacity,” Al-Siman asked in a comment to Al-Ahram Weekly. He said that some projects in some governorates had not been included in the map, which was why he stressed the need to keep it up to date.

Former secretary-general of the 6 October Investors Association Mustafa Ebeid said that the success of the map hinged on a system that should facilitate the setting up of projects on the ground. 

Problems often came with implementation, he said, adding that the government had been talking about a new investment law that would encourage investment, but its executive regulations had not yet been issued.

“Having a map of industrial investment is a good idea, but its success will lie in its implementation,” Ebeid said.

Although President Abdel-Fattah Al-Sisi and Governor of the Central Bank of Egypt (CBE) Tarek Amer had launched a good initiative to finance SMEs with some LE200 billion in funds at an interest rate of five per cent, many SMEs had been hindered by the banks’ conditionalities, he said.

This underlined the problem of financing faced by many SMEs and the need to provide them with facilitated financing, he added.

The government has recently been exerting efforts to lure investors and boost exports in a bid to revive the economy. A new Industrial Permits Act has been issued, which facilitates procedures for starting an industrial business and reduces the time needed to acquire a permit from 360 days to only one week. 

This is in addition to a new investment law that has been approved by parliament and whose executive regulations should be issued soon. 

The Trade Ministry has also revealed a strategy to almost double the nation’s exports by the year 2020 to $34 billion. It includes implementing new export plans, as well as targeting new markets for cement, agricultural products, ready-made clothes, construction materials, chemical products and engineering and electronic goods.

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