Egyptian PM: Industrial Sector Support Boosts Production

Egyptian Prime Minister Mostafa Madbouly has stated that the government's support for the industrial sector is yielding positive results across many productive sectors. The Secretary-General of the Exporters Division at the Cairo Chamber of Commerce, Ahmed Zaki, has proposed a comprehensive review and strategic focus on increasing exports of high-demand products in international markets.

Zaki advocates for robust support for exporters, exploration of new markets, and initiatives to enhance the value-added aspect of agricultural commodities. He recommends granting exporters a complete tax exemption for two years and relief from duties to bolster competitiveness. "The Egyptian government's efforts since 2015 to invigorate exports and curtail the trade balance deficit have led to a reduction in the trade balance deficit, from $53 billion in 2015 to $36.9 billion last year," Zaki stated.

Egypt aims to increase its total exports to $145 billion by 2030 as part of a broader plan to boost foreign exchange revenues to a cumulative $300 billion. The Austrian Petrochemical Holding Company and the Czech Draslovka Company are planning to establish a joint project to produce sodium cyanide in Egypt, with an initial investment of $160 million. The project involves constructing a sodium cyanide factory in Egypt, primarily to meet local demand and export 80% of the production to markets in the Nile Basin, the Middle East, and Africa.

During a meeting with Egypt's Minister of Trade and Industry, Ahmed Samir, the investment delegation expressed confidence in the Egyptian economy and its favorable investment climate. Samir highlighted the potential of the Egyptian market for the project, citing numerous incentives, an abundance of raw materials, and a skilled labor force. Additionally, Egypt's network of free trade agreements would enable the project's products to enter multiple markets without incurring customs duties.

Why this matters: The production of sodium cyanide is essential for industries like mining, pharmaceuticals, and agricultural pesticides. The venture will facilitate the transfer of advanced European expertise and technologies to Egypt, enhancing the country's industrial capabilities and increasing Egyptian exports, particularly to African markets, in line with the African Free Trade Agreement (AFCFTA).

On April 24, 2024, Prime Minister Madbouly chaired a cabinet meeting to discuss various political, economic, and social issues, as well as global developments. The cabinet focused on implementing initiatives to reduce commodity prices, increase food availability, control markets, encourage investments, complete national projects, and provide for the needs of low-income citizens. The meeting also addressed decisions related to investment, industry, export, agriculture, market monitoring, industrial land availability, social security, taxation, and development in sectors such as health, sports, education, and transportation.

Key Takeaways

• Egypt aims to increase exports to $145B by 2030 and reduce trade deficit.
• Egypt to establish $160M sodium cyanide factory with Austria and Czech firms.
• Exporters advocate for 2-year tax exemption and duty relief to boost competitiveness.
• Egypt's free trade agreements to enable project's products access to multiple markets.
• Cabinet meeting discussed initiatives to reduce prices, increase food, and support investments.