A comprehensive look at Egypt’s strategy to boost industrial growth

In a significant step toward revitalizing its industrial sector, the Egyptian cabinet has approved a groundbreaking initiative to support priority industries. This initiative forms part of the government’s overarching strategy to localize production, enhance economic resilience, and position Egypt as a regional industrial hub by 2027.

Egypt has set ambitious goals under its 2024-2027 development program to increase the industrial sector’s contribution to the national GDP from the current 14 percent to as much as 30 percent. The government’s roadmap involves identifying 152 specific investment opportunities to localize production, create jobs, and reduce reliance on imports.

Prime Minister Mostafa Madbouly underscored these goals during the third International Annual Industry Conference and Exhibition (IMCE) in November, signaling a renewed focus on industrial development as a cornerstone of economic growth.

The newly approved initiative provides comprehensive support to companies within priority sectors by offering financial facilities for purchasing machinery, equipment, and production lines. This effort will enable businesses to modernize their operations, expand capacity, and meet both domestic and export market demands.

Among the highlights:

• Financial Support: A substantial EGP 30 billion has been allocated to the first phase, with the funds aimed at financing essential machinery and infrastructure.
• Eligibility Criteria: To access benefits, companies must fulfill specific conditions, including proof of completed construction, valid building permits, and tax invoices for machinery purchases.
• Regional Focus: Special priority will be given to facilities in regions with high development potential, such as Upper Egypt, border governorates, and the Suez Canal area.

The initiative targets industries deemed critical for economic growth and self-reliance. These include:

1. Pharmaceuticals
2. Engineering products
3. Food production
4. Ready-made garments and textiles
5. Chemicals
6. Mining
7. Construction materials

By focusing on these sectors, the government aims to address key vulnerabilities in the supply chain while fostering innovation and sustainability in manufacturing.

This initiative is part of a broader, multi-faceted strategy to stimulate industrial growth. Previous efforts include:

• Central Bank-Led Financing: The Central Bank of Egypt (CBE) introduced programs to facilitate affordable loans for purchasing industrial equipment.
• Proposed Industrial Recovery Fund: A pending initiative suggests establishing a fund supported by financial institutions to assist struggling factories.

These programs collectively aim to strengthen the industrial base, support struggling enterprises, and create an enabling environment for sustained growth.

The success of the initiative hinges on seamless coordination among key stakeholders, including the Ministry of Finance, the Central Bank, and the Ministry of Industry. Deputy Prime Minister for Industrial Development Kamel El-Wazir and Finance Minister Ahmed Kouchouk are leading efforts to streamline processes and ensure the initiative’s smooth rollout.

The Ministry of Industry has estimated that achieving the goals for priority sectors will require an additional loan of approximately EGP 7.7 billion, underscoring the scale of investment needed to drive transformation.

The initiative’s focus on underdeveloped regions like Upper Egypt is particularly noteworthy. By prioritizing investments in these areas, the government aims to:

• Generate employment opportunities in regions with high unemployment.
• Stimulate economic activity in marginalized areas, reducing regional disparities.
• Enhance social cohesion by integrating remote areas into the national economy.

While the initiative has been widely praised for its ambition, challenges remain. Streamlining bureaucratic processes, ensuring timely disbursement of funds, and fostering collaboration between the public and private sectors will be critical for success.

Nonetheless, the initiative represents a transformative opportunity for Egypt to redefine its industrial landscape. By creating a robust industrial base, the country can reduce import dependency, enhance export potential, and position itself as a regional powerhouse in manufacturing.

Egypt’s finalized initiative to support priority industrial sectors is more than a policy decision—it is a testament to the nation’s commitment to industrialization as a pathway to economic prosperity. If effectively implemented, this program could serve as a model for other emerging economies seeking to localize industry and enhance their global competitiveness.

With the government’s firm backing and a clear roadmap, the future of Egypt’s industrial sector looks promising, offering hope for sustainable growth and prosperity.