As Egypt’s economy enters a new era of growth, Egypt’s Ministry of Trade and Industry has been busy working internally to bolster the country’s industrial capacity, and externally to enhance trade relations with countries around the world. German companies have taken note of Egypt’s improvements with industrial giants such as Mercedes Benz returning after a five-year hiatus and Siemens undertaking one of the largest projects in the company’s history. Here, Amr Nassar, Egypt’s minister of trade and industry, explains what has been done to make Egypt a more attractive investment destination for industrial companies, as well as his strategy to boost FDI and trade going forward

You were sworn into office in June 2018. What have been your greatest milestones in this role so far? 

The government has made great strides in the execution of an ambitious economic roadmap that includes necessary reforms aiming at putting Egypt back on the world economic map. These measures have borne fruit; including a lower budget deficit, increased employment rate, better GDP, and higher foreign reserves in the Central Bank of Egypt. As a result, Egyptians have reaped the benefits of these reforms through higher economic growth and bigger foreign and local investments, in addition to more jobs for the youth.

What are your top priorities for 2019? 

The ministry is now seeking to implement an ambitious three-pillar plan to develop the trade and industry sectors to promote Egypt’s economy. The first pillar of our plan focuses on boosting productivity via horizontal growth of the national industry. This means making use of idle industrial capacity, promoting Egyptian products and enhancing their competitiveness locally and globally, as well as targeting the markets where the Egyptian product has a competitive edge. The second pillar aims to create new and good jobs for our youth, and the third is to complete national megaprojects and meet challenges facing the industrial sector with a special focus on competitive and economically viable sectors.

Germany ranks as approximately the 20th largest investor in the country. What are your thoughts on the importance of German trade and investment?

Egyptian and German relations are strategic and based on mutual interests. Egypt is seriously keen to boost cooperation with Germany in terms of trade and investments. In 2018, trade with Germany totaled $4.7 billion, with an 11.2 percent increase in Egypt’s exports to $663 million. Germany is the 20th top investor in Egypt with a total of $7.1 billion in 1,215 projects. These figures are low, however, and more effort is needed to bring the investments up to the strong level of relations between both countries. Still, Germany is one of the key partners for Egyptian industry.

Likewise, Egypt offers advantages for German investors. Big companies like Siemens are engineering companies, broadly speaking, and many of their components don’t come from Germany. Egypt can help them combat demographic challenges in Europe and the high cost of labor in manufacturing different components. The African Continental Free Trade Agreement (AfCFTA) has also just gone into effect, which reinforces yet further Egypt’s status as a platform to enter the African and other regional markets. I believe that Egypt could be very attractive in terms of automobile manufacturing, for instance, making brands and models that are targeted to the region. We have a great supply chain platform. Industry in Egypt started in 1930, so the knowledge and facilities are already here.

What is your strategy to attract more German FDI? 

To boost investment, our government exerts great efforts to formulate a sustainable legislative framework that streamlines investment procedures and reaffirms our country’s obligation to protect foreign investments. To this end, the government has undertaken a number of measures, including issuing new investment, industrial licensing and bankruptcy laws, all with the goal of creating a more stable business environment. On the other hand, the government is enhancing the role of the private sector and welcoming foreign investments for the sake of achieving an overall development, raising employment rates, boosting economic growth, along with fighting corruption. Another key part of the strategy to boost trade and investment is recognizing our competitive advantages in trade and industry, and supporting those sectors. Egypt seeks to benefit from German expertise and modern technology in the field of industrialization, automation and digitalization to improve national industry. That’s why the Ministry of Trade and Industry has recently signed with Siemens an operational plan for the signed five-pillar MoU to boost industrial competitiveness. This aims at enhancing infrastructure, supporting digitalization in the industrial zones, assisting factories with power efficiency and automation, raising the training and vocational education capacity, along with providing the funding tools for industry. Another of our targets is to offer good proposals and packages for FDI.

The auto industry has been a key focus of increased trade and investment in recent months, with Mercedes Benz announcing it will not only resume operations in Egypt that were withdrawn in 2012 but invest in new technologies such as electric cars and autonomous vehicles. BMW has also expressed interest in manufacturing in Egypt. Tell us about the auto industry as a growth sector and what other opportunities you are promoting for German auto companies.

We must consider that the automotive business is going through a revolution right now. Egypt wants to be part of this, cooperating with German companies, especially in terms of e-mobility and electric vehicles. Electric vehicles will retain around 10 percent of the components used in traditional vehicles. Luckily, Egypt manufactures things that will remain like wiring, automotive glass, paint, seats and tires. We can complement the new industry. We also have a strong IT industry and a platform that can help develop autonomous driving. Egypt is eager to promote electric cars, as they are the future of the global auto industry. That’s why the government is working to equip new cities with the necessary infrastructure, especially following the presidential decree to lift customs duties on imported electric cars. The decision aims to encourage Egyptian consumers to use such eco-friendly vehicles, to economize energy consumption and protect the environment. One of the key players in this field in Egypt is the Bavarian Auto Group (BAG), which manufactures and markets BMW cars in Egypt, and seeks to lead the electric automotive market in 2019. BAG conducted numerous studies, for over two years, on how to introduce electric vehicles (EVs) into the Egyptian market, train workers in the field and complete electric vehicle service centers. The government is keen on developing the automotive and its feeder industries, in order to meet the market’s needs at home and export to countries Egypt has agreements with. Still, more investments are needed to boost this vital sector, and manufacturers could well benefit from the huge potential of the local market and its investment advantages, which include free access to regional markets, qualified labor and a wide range of trade agreements with the world’s top countries and economic blocs.

You recently met with Ivan Surkos, ambassador and head of the European Union Delegation to Egypt to explore increasing Egypt-EU cooperation, and specifically the launch of the European-Egyptian sustainable economic development committee. How do you rate Egypt’s relationship with the EU?

The ministry is giving top priority to boosting relations with the EU. It is Egypt’s biggest trade partner. We are also prioritizing enhancing cooperation among the business communities to adopt mutual projects and make good use of the trade agreements signed by both sides. The committee on promoting Egyptian-European sustainable economic development is one of the fruits of the Euro-Mediterranean Partnership. It aims to discuss the promotion of cooperation between both sides in terms of industry, trade, agriculture, investments and services. To that end, the government has recently approved investment incentives set out in the New Investment Law in order to motivate companies to pump new investments into Egypt, all of which is a big opportunity for the European companies. As chair of the African Union for 2019, Egypt seeks to enhance cooperation with the EU as Africa is full of opportunities through which we can attract EU companies to invest in the promising African market. There is harmony between Egypt and the EU in terms of how to achieve development in Africa, especially in the fields of entrepreneurship, SMEs and supporting woman and youth.

Egypt has 65 million people under 40. Can you tell us more about your plans to integrate Egypt’s young people into SME growth and the labor market?

Developing the SME sector is high on our agenda and a top priority for the government in the current period, being the basic structure of the Egyptian economy and the major job provider for youth and women. The ministry and all of its bodies – including its Industrial Development Authority, Export Development Authority, Industrial Modernization Center and the SME Development Authority – are committed to cooperating with their German partners in this area, within the Egyptian-German Promotion of Small and Medium Enterprises (PSME). We now have a good opportunity to make a quantum leap through the information economy, creativity and innovation, and youth empowerment. In this respect, Egypt boasts great potential in a number of creative industries like fashion design, textiles and handicrafts. The ministry also attaches great importance to implementing advanced joint vocational training programs for the youth to produce a qualified workforce capable of dealing with state-of-the-art technologies. Moreover, it is currently expanding in industrial parks, while putting idle manufacturing capacity to good use. Within its comprehensive economic reform program, the government is laying out policies and implementing radical reforms both in the medium and long term to meet the growing job demand among the youth.

What new or emerging industries is your ministry targeting for growth?

Developing the industrial sector and increasing its competitiveness top the government’s agenda at the current time. Industry is a key driver of sustainable development, especially in the fields of engineering industries, textiles, EV manufacturing, petrochemicals, mining, light industries, as well as solar and new energy projects.

The 22nd Arab-German Business Forum will be taking place this summer in Berlin, and Egypt is this year’s partner country. What are your thoughts on the importance of this event?

The Arab and German business communities play an important role in strengthening bilateral economic cooperation. Joint business forums offer a platform for dialogue and fruitful partnerships, which eventually boost mutual trade and investments. The 22nd Arab-German Business Forum is a good example of that. I encourage business leaders in Germany and the Arab world to further invest in Egypt over the coming period. Egypt is in the middle of everything; it’s in the heart of everywhere. Egypt is the country of opportunities.