What Are the Investment and Trade Opportunities in Egypt?

Egypt, which ranks as the third largest economy in Africa and the 42nd largest in the world, offers trade opportunities in the African market with its rapidly growing population, advantageous geographical position as a bridge between the Middle East and Africa, and its rapidly developing economy. Egypt hosts the Suez Canal, a crucial trade passage between Asia and Europe, and one of the key arteries of the global economy.

In 2019, Egypt recorded a total export of $30.6 billion and an import of $78.6 billion. With a trade deficit of $38 billion, Egypt ranks among the countries with the highest trade deficits in the world. Egypt's closest trading partners, America, China, and Germany, have established commercial relations with Egypt, while Turkey is the 5th country from which Egypt imports the most. In 2019, Turkey provided $3.5 billion in exports to Egypt while importing $1.9 billion from Egypt. With a bilateral trade volume of $5.4 billion in 2019, Egypt is Turkey's 19th most important trading partner. In the last 5 years, Egypt's exports have risen at a lower rate compared to imports. The reason for the low rate of export growth is the economic policy implemented in Egypt in 2016 to reduce imports.

How is the Distribution of Investment in Egypt by Sectors?

Agriculture, Livestock, and Fishing

In the 1980s, Egypt initiated a reform process in the agricultural sector. The state aims to reduce its control and share in agricultural areas. Today, the agricultural sector in Egypt is entirely provided by the private sector under market conditions and for export. Egypt continues to be a net importer of agricultural and food products. Among the most well-known agricultural products of Egypt are; cotton, tomatoes, rice, wheat, corn, potatoes, onions, garlic, olives, sugar cane, dates, citrus fruits, mango, and horticultural products. Especially, long-staple Egyptian cotton is a highly sought-after product in global markets. With 33% of the total workforce in the agricultural sector and the agricultural sector holding approximately 14% share in national income, it maintains its priority in the state's economic policies. 55% of the total population is located in rural areas. However, due to only 4% of the country's geography being arable land, it is crucial to evaluate the existing agricultural lands in the most efficient way and also to undertake new projects for acquiring agricultural lands. Moreover, as Egypt receives less rainfall outside its Mediterranean coast, the country's agriculture is dependent on irrigation. Therefore, the development and management of irrigation techniques become increasingly important.

Services:

Banking and Finance banks operating in Egypt and their branches abroad are required to be registered with the Central Bank. The minimum capital expected for a bank to be established is not less than 500 million Egyptian pounds. The minimum limit for branches of foreign banks is $50 million. Banks have become free to determine pricing and interest rates.

Transportation and Telecommunications

The total length of highways in the country is 193,841 km. Although the sections in Cairo, Alexandria, Suez, Port Said, and Fayoum appear to be in good condition, a significant portion is largely neglected and of poor quality. Additionally, given that the majority of freight transportation in Egypt is done by highways, it is expected that various investments will be made in this area in the coming years. Furthermore, the country has a railway network of 9,570 km in length. In Cairo, there are three metro lines, one of which has a total length of 81 km. Most of the goods entering the country come through important ports such as Alexandria, Damietta, Port Said, and Suez. The Alexandria port is the largest and widest port in the country, handling 55% of Egypt's foreign trade. Approximately 90% of the external trade volume is conducted through sea transport. Egypt has 42 ports, including 15 major commercial ports and 27 private ports. The state is working on increasing the capacity of the ports. On the other hand, Suez Canal revenues represent one of the most valuable sectors in Egypt for foreign currency earnings.

Tourism

Tourism has a key service network in Egypt and provides significant benefits to the workforce. It has become an important source of foreign currency earnings for Egypt. Authorities responsible for tourism activities are responsible for making arrangements and implementing regulations for tourism projects and investments by facilitating access to credits to further develop land procurement and infrastructure projects.

Mining

Another important natural wealth of Egypt is marble. The total investment amount in the marble sector in the country is approximately $420 million. Egypt ranks as the 5th largest country in the world in the marble industry, following China, India, Iran, and Italy. In this context, there are also potential investment and job opportunities in the marble and granite sector.

Energy

Egypt is organizing strategies to meet energy needs from renewable energy sources, aiming for 20% of all energy production to come from renewable sources by 2022. The proposed share of this rate is 12% for wind energy, 5.8% for hydroelectricity, and 2.2% for solar energy.

Oil and Natural Gas

The oil industry constitutes about 40% of export revenues and holds a significant share of 8.6% in national income. Oil revenues have become one of the four main sectors that generate foreign currency. Egypt's crude oil reserves are estimated to be around 4.4 billion barrels. Egypt has 9 refineries with a daily capacity of 750,000 barrels. Oil production in Egypt is around 600 kb/day, and with Egypt's growth and development, the demand for both gas and refined fuels is increasing. In addition, there have been significant increases in Egypt's LNG exports in 2021 due to the rise in gas spot prices in Europe and Asia. This increase is expected to continue in 2022. From an oil perspective, taking into account the recently planned investments for refining capacity, it can be anticipated that oil product exports will be on the rise.

What Are the Reasons for Establishing a Company in Egypt?

Egypt is known as one of the oldest civilizations on the planet. After long structural, political, and economic reforms, Egypt has become a highly attractive country for investors. Egyptian entrepreneurs believe the desert is not as dry as it seems and that there are very profitable opportunities for investment in this geography. Here, investors have grown wealthy by investing. In Egypt, it is quite easy to make agreements with people while doing business. The official language of Egypt is standard Arabic, which is the national and spoken language. English and French are also predominantly spoken in business sectors.