Formulating clear manufacturing policy tops agenda at National Dialogue Tuesday

Amr Kandil , Tuesday 23 May 2023

Industrial experts and officials at the National Dialogue discussed Tuesday formulating a clear manufacturing policy and eliminating unnecessary bureaucracy to reverse the decline in the role of industry in the economy.

National Dialogue
Industrial experts and officials at the National Dialogue discussed Tuesday formulating a clear industrial policy and eliminating unnecessary bureaucracy to reverse the decline in industry's contribution to the Egyptian economy.


During the second meeting within the dialogue's economic axis, the participants discussed reviving the industrial sector.

They stressed the need to achieve the localization of industry by removing obstacles facing investors.  

The participants also held a session to discuss the opportunities available to local and foreign investors and the challenges facing the investment climate in Egypt in light of the international indicators.

Eliminating bureaucracy

“The cost of bureaucracy in Egypt is higher than the cost of taxes, and investors add what they incur as a result of bureaucracy to the price of the goods,” Alaa El-Saqty, head of the small and medium-sized enterprises (SMEs) federation, said during the National Dialogue session.

El-Saqty urged the state to eliminate unnecessary bureaucracy to increase the competitiveness of industrial products.

The participants in Tuesday's session discussed, too, increasing the level of industry's contribution to the economy.  

Bahaa Dimitri, the rapporteur of the Industry Committee in the National Dialogue, highlighted that, in Egypt, the industry contributes to only 16 percent of the gross domestic product (GDP) – a meagre contribution compared to several countries.

Dimitri added that the industry's contribution to the GDP should be around 33-35 percent.

He noted that achieving such a goal requires a sincere political and economic will to establish a sound investment environment that encourages investors to add to the national economy.  

During the session, the participants called for a clear policy and vision that outlines the state's industrial priorities.

They also called for a quick implementation of the State Ownership Policy Document, in which the state has pledged to withdraw from many industrial sectors.

“There must be a clear plan for the state to focus on specific industries,” El-Saqty said during the session, adding that the absence of such a plan baffles the investors.

Localizing industry

Localizing industry ranked highly on the agenda of the session. 

Hossam El-Khosht, a member of the Justice Party, affirmed that the programmes and plans set by the government to localize industries overlook the requirements to do so.

Therefore, El-Khosht called for reviewing and activating several laws and decisions to promote local industries, including decision 3265/2021 on localizing industries.

Several participants have also called for integrating raw materials into local industries instead of exporting them unprocessed.

Mohamed Khalil, a member of the Egyptian Social Democratic Party, stressed the importance of limiting the exportation of raw and intermediate materials.

“We should export raw materials only after they undergo a manufacturing process, and we should provide opportunities to exploit them,” Khalil stated.

He also affirmed that intermediate materials should be exported only after meeting the local demand.

Moataz Mahmoud, head of the House of Representatives Industrial Committee, said that using the country's raw materials in manufacturing rather than exporting them should relieve the import bill. 

Implementing State Ownership Policy Document

Ahmed Fikry Abdel-Wahab, an industry expert and member of the Board of Directors of the Federation of Egyptian Industries (FEI), noted that the State Ownership Policy Document contains neither a specific timeframe nor a list of the investments that the state will withdraw from.

Abdel-Wahab added that investors need to see these parts of the document.

Obstacles facing investors

He also stated that one of the major obstacles facing investors is the unpredictability of the exchange rate, which makes investors uncertain about the future of their investments in the Egyptian market.

Moreover, Abdel-Wahab maintained that though the state has a clear policy on the automotive industry, the means of implementing such a policy still needs to be clarified.

Mahmoud Essam, a Reform and Development Party representative, called for the state to quickly and efficiently provide lands for industrial investors and ensure a fair price for these lands.

On the other hand, Mohamed Khalil of the Egyptian Social Democratic Party called for developing a mechanism to allocate lands for industrial sectors.

For his part, El-Saqty described the issue of allocating the industrial lands as thorny.

He added that the state needs around EGP 10 trillion to increase industrial lands –  and industrial production – twofold.

El-Saqty noted that Egypt currently needed more resources to achieve such an increase.  

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