15
MARKET RESEARCH COUNTRY REPORT EGYPT
MARKET RESEARCH COUNTRY REPORT
EGYPT
CONTENTS
Main Industry SectorsEconomic OverviewForeign Direct Investment [FDI]FDI Government MeasuresCountry Strong PointsCountry Weak PointsForeign Trade Overview
MAIN INDUSTRY SECTORS
Agriculture contributes around 13% of the GDP and employs about a third of the active population.
The warm climate and the abundant Nile water allows for several annual harvests.
The main crops are cereals, cotton, sugar cane and beets.
Egypt remains a country with little industry. With its diverse natural reserves (gold, minerals, iron, oil
and gas), oil and gas-related activities and the secondary sector account for just over a third of the GDP.
Egypt is the world's sixth largest exporter of natural gas.
Egyptian tertiary sector represents around 50 % of the Egyptian GDP. It is largely dominated by
revenues from telecommunications (which grew by 11% during the first quarter of 2010) and from
tourism (the tourist industry brings about 11b in annual revenues. For example Cairo received 14m of
visitors in 2010).
In spite of its economy's diversification, the country still depends for a large part of its income
on the Suez Canal (380m during the first quarter of 2010).
ECONOMIC OVERVIEW
Establishment of a new Egyptian government in July 2004, Egypt launched an economic
reforms program, including a large stimulus plan in 2008.
Consequently, tariffs and taxes were lowered and simplified.
The transparency of the national budget was reinforced and many privatizations were
initiated.
This new policy bore its fruits as growth reached a level of more than 5% in 2009 and
2010, especially thanks to the resumption of private and public consumption.
The construction, communications, wholesale and retail sectors, catering and hospitality,
as well as manufacturing contributed to the development of economic growth.
The year 2010 was marked by an under-performance of the sectors which most strongly
contribute to the country's GDP, namely agriculture and mining.
The IMF growth estimates for 2011 are between 5.5% and 5.8%, counting on the
increase in consumption, recovery of foreign growth (tourism and the Suez Canal) and a
resumption of investments.
ECONOMIC OVERVIEW
Egyptian economy has entered into a cycle of progressive growth, its level of growth
remains insufficient to maintain employment and reduce the share of population living
below the poverty of line (18%).
Egypt faces a high rate of inflation (about 10%). Foreign accounts, weakened during the
crisis by a decline in foreign exchange earnings and net capital flows, have recovered and
the trade balance returned to surplus in 2010.
FOREIGN DIRECT INVESTMENT [FDI]
With the rapid influx of new investments since 2005, Egypt became the first recipient of FDIs in the
Middle East, and 3rd in the Arab world after Saudi Arabia and United Arab Emirates.
The dynamic growth of the Egyptian economy (around 7% in the recent years), the strategic
geographical position of the country, its low labor costs and skilled workforce, a unique tourist potential,
substantial energy reserves, large domestic market and the success of reforms undertaken by the
authorities since 2004 (including many privatizations) are all factors that may explain the sharp rise of
FDI.
The regional context should also be taken into account, as Egypt has benefited from abundant liquidity
coming from the Gulf countries, as a direct result of the increase in revenues generated by oil exports.
FOREIGN DIRECT INVESTMENT [FDI]
Due economic crisis, FDI flows, which had been slowing down since the summer of 2008, halved in the
two last years: a decrease in 40% in 2008-2009, with 8.1 billion dollars and a decrease of 17% in 2009-
2010, with 6.8 billion dollars.
FDI comes mainly from the European Union, the United States and the Arab countries. The United
States, for a long time the number one investor in Egypt, have now been exceeded by the European
Union.
Investments focus primarily on tourism, construction, telecommunications, financial services, energy,
and healthcare.
FDI GOVERNMENT MEASURES
Since September 2004, the General Authority for Investment and Free Zones (GAFI)
has established an economic program to attract foreign investors, together with an
average reduction of 35% customs duty and tariff simplification.
Though all the economic sectors are open to domestic and foreign investors, there are
some that are especially targeted by the Law, which expressly provides the possibility to
execute projects under the BOT (Build, Operate, Transfer) form, in the agricultural,
industry, mining, tourism and hospitality, air travel, off-shore shipping transport, goods
transport services, oil prospection and drilling, infrastructures more specifically for
drinking water conveyance, roads, housing and used water recycling sectors.
Other sectors are added to this list depending on needs (leasing, venture capital,
creation of computer programs and software, etc.).
Privatization programs are also open to foreign investors. Some sectors are considered
strategic and hence subject to specific legislations: aerospatial, defence, newspaper
publishing.
COUNTRY STRONG POINTS
Egypt is in a geographically strategic location.
Egypt offers a cheap and relatively qualified labor force.
Egypt growing population constitutes a non-negligeble market in the region.
Egypt energy resources are attractive and in addition, the country has in recent years, launched a public
works policy (construction of the third metro line, expansion of the port of Sokhna and improvement and
renovation of the rail network), which offers many investment opportunities to foreign companies.
Egyptian government policy for large scale liberalization and improving the appeal to foreign
investors are encouraging signs for foreign investment.
COUNTRY WEAK POINTS
Despite privatizations, the inefficient and loss-making public sector remains ubiquitous in some
sectors.
Egyptian apid population growth continues to curtail the improvement of the standard of living
for Egyptians.
Egypt registers a delay in its infrastructures in which current investments are not able to make
up for.
FOREIGN TRADE OVERVIEW
The Egyptian market is gradually opening up, especially after signing an agreement with
the European Free Trade Association (EFTA) in 2006, and a free trade treaty with the
United States.
Egypt three primary export partners are the European Union, which represents more than
a third of the trade, United States and Syria.
The EU and the USA absorb almost 60% of Egyptian exports.
Egypt mainly exports mineral fuels and oil, cotton, iron and steel.
Egypt imports mainly consumer electronic goods and capital goods, nuclear reactors and
nuclear-powered boilers, cereals, food products and chemical products.
Import volume has doubled and is twice the export volume, a fact which contributed to
the deterioration of the country's trade balance, now a deficit (USD 25.1b in 2010)
RELATED EGYPTREPORTS
Market Opportunities of products and Services in Egypt.
Export and investment sector opportunities in Egypt.
Overview of Trade Regulations, Customs and Standards Egypt.
Egypt Investment guide for beginners.
Business and Project Financing in Egypt.
Business Travel Advisory in Egypt.
Visit us to download for related reports
COUNTRY LIST China Mexico United States India Canada Russia Hong Kong Colombia Brazil Turkey Indonesia Egypt Singapore United Kingdom Italy Japan
Australia
Germany France Spain South Korea Vietnam Saudi Arabia Poland South Africa Nigeria Argentina UAE Netherland Sweden Thailand Israel and more….
Buy 2 reports get 1 report FREE
International Market Research Report on 300+ topics over 100 countries
Need additional reports ?
Market Size
Market access strategies
Market Share
Import and Export information
Market Analysis
Market Trends
Competitions
Domestic production Best sales prospects
Statistical data
Tariffs and regulations
Distribution and business practices
End user analysis
Trade shows and contact points
Instant online
Delivery
Thanking for downloading
For more information visit us
www.worldresearchreport.com
Or Email us
