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With a market of 92m consumers and growing, Egypt is a natural fit for manufacturing industries. The sector spans a diverse range of activities, largely led by the private sector, that range from building materials and downstream processing, to long-running textile factories, as well as competitive food and fast-moving consumer goods segments. Yet the government hopes to further expand, and its goals for the sector are ambitious. Manufacturing accounted for approximately 16.6% of the country’s GDP in 2015, with medium-term plans to create 3m jobs and increase its share to 25% by 2020, in part through the development of new industrial zones. Egypt’s industrial sector features substantial attractions for long-term investment, including a large consumer base, low labour costs and a potential gateway to the growing African middle class. Short-term obstacles remain, however, starting with the Egyptian pound’s struggle to stabilise against major international currencies and continued instability in gas supply; yet the goal of long-term growth remains the key priority. Egypt’s retail market is competitive and highly fragmented. The maturing formal retail sector features a range of shopping malls, supermarkets, hypermarkets and smaller franchised competitors, as well as the more informal options that have traditionally served Egypt’s shopping needs, such as souqs, street vendors, independent high-street shops and neighbourhood corner stores. The country’s modern retail segment grew at a compound annual growth rate of 6.3% from 2013 to 2015, and is expected to grow by of 10% in 2017, potentially doubling by 2021. Despite the instability of recent years, retailers remain focused on the long-term opportunity that Egypt’s fast-growing population presents, as evidenced by the country’s return to the top of AT Kearney’s global retail index, notwithstanding the challenges presented by Cairo’s urban density, downward pressure on the pound and other obstacles. This chapter contains interviews with Mohamed Zaki El Sewedy, Chairman, Federation of Egyptian Industries; and Hassan Nouh, Managing Director, Ezz Steel.

Egypt is one of Africa’s main oil and gas producers, but it is also the continent’s largest consumer of energy. Both oil and gas are found throughout the country in multiple onshore and offshore regions, including the Mediterranean Sea, which is emerging as a major new gas basin. Nevertheless, sourcing enough supply to meet demand is the sector’s central challenge, even as these discoveries are expected to contribute significantly to meeting demand within the next few years. With discoveries in 2016 and the expectation of future upstream findings, Egypt is well on its way to addressing the supply side of its energy provision problem. Managing demand increases through subsidy cuts is a longer-term proposition, and Egypt is working to become a net energy exporter again. This chapter contains an interview Tarek El Molla, Minister of Petroleum and Mineral Resources.

The Egyptian insurance industry, one of the oldest in the region, has shown a welcome degree of resilience in recent years. Despite its long history, however, the market remains at a relatively nascent stage of growth compared to those in more advanced economies, characterised by a low penetration rate and modest insurance density. While this means that growth opportunities abound, questions remain as to how they will be achieved. Despite these obstacles, there is significant potential for development in Egypt’s insurance industry. Oil importing economies in the MENA region, such as Egypt, are likely to see premiums grow in excess of GDP growth where governments are able to maintain their determined development plans. This chapter contains an interview with Corneille Karekezi, Group CEO, Africa Re.

The year 2016 was a difficult one for exchanges across the MENA region, due in large part to persistently low oil prices and political unrest. Egypt’s main index reflected the regional malaise for the first half of 2016, with a currency crisis and seemingly intractable fiscal deficit impacting investor confidence. By the second half of the year, however, the index was climbing once again as negotiations regarding an IMF lending programme were nearing a successful conclusion. While significant challenges remain, not least the direction of Egypt’s economy over the coming years, the Egyptian Exchange (EGX) and its regulator continue to develop one of the region’s most important exchanges. While the ability of the EGX to attract both new listings and investors is tied to the wider question of Egypt’s macroeconomic performance and the vicissitudes of global politics, the exchange is well positioned to grow should circumstances allow. This chapter contains interviews with Sherif Samy, Chairman, Egyptian Financial Supervisory Authority; Hussein Choucri, Chairman and Managing Director, HC Securities & Investment; and Omar El Maghawry, CEO, FEP Capital.

Egypt’s banking sector has shown itself capable of weathering difficult economic circumstances in recent years. However, profitability has been challenged by a range of forces, including significant changes made in 2016 to the regulatory framework surrounding lending activity and a shortage of foreign currency that negatively affected the daily operations of banks and wider investor sentiment. The sector is also undergoing something of a shake-up in terms of ownership, following an announcement in 2016 by the Central Bank of Egypt that the country intends to sell stakes in two state-owned lenders. Egypt’s banking sector is likely to continue to face some significant changes in 2017-18. The country’s lenders are still well placed to weather volatility, and are generally in good health, but the coming months will test their ability to adapt to changing circumstances. This chapter contains an interview with Khalid Elgibali, Division President, Mastercard MENA.

Egypt’s GDP per capita of $3615 in 2015, according to the World Bank, is considerably lower than the world average of $10,058, and establishes the country as lower-middle income. The nation’s transition from an energy exporter to a net importer of gas has resulted in a stubborn current account deficit. Nevertheless, Egypt entered 2016 on the back of some encouraging economic data. According to the Ministry of Planning, real GDP for FY 2014/15 grew by 4.2% at market prices, the most rapid rate of expansion since the 2011 revolution. Improving Egypt’s investment credentials will remain a key concern for the government over the coming year, as it seeks to shift the burden of development from the state to the private sector. The promulgation of the new Investment Law will bring much-needed clarity to important investment factors such as free zones, tax exemptions and the purchase of state-owned land. In the short term, however, the government is likely to continue to face considerable economic challenges. The possibility of Egypt establishing a functioning foreign exchange market after a currency flotation also promises to bring a number of substantive improvements to the business environment. This chapter contains interviews with Mohamed Khodeir, Chairman, General Authority for Investment; Anis Aclimandos, President, American Chamber of Commerce in Egypt; and Abdulwahab Al Bader, Director-General, Kuwait Fund for Arab Economic Development.