The government’s economic policies are still shrinking, while the Egyptian industry sector is suffering sluggish activity. The economy has to be encouraged to overcome the challenges of aggravating budget deficit and inflated debt, according to Former Federation of Egyptian Industries Chairman Galal Al-Zorba.
He added that industrial sector reform is the only means to eliminate increasing unemployment, which is the main reason for the rise in poverty rates. Lack of energy supply for factories halts the industry completely and causes production shortages, which may lead to layoffs.
The Egyptian government has to quickly find solutions for the energy issue which would help the country to recover and gain its power. Al-Zorba added that the Economic Summit will include development partners, providing an excellent opportunity for the country to promote its policy in dealing with the energy issue.
The government has to also encourage all economic sectors, in addition to the current national projects because they are not enough (Suez Canal axis project), according to Al-Zorba.
He believes the government should leave investments in renewable and new energy to the private sector. This would occur after facilitation of land and procedures to enter the market, helping the sluggish industrial situation to recover.
“Agricultural industry without having to export is a solution to the government, instead of exporting primary products as an easy choice,” said Al-Zorba. He added that Egypt has a great opportunity in cultivating the seeds it imports. Seed companies achieve income exceeding weapon companies significantly.
Al-Zorba believes that the summit is a huge opportunity for Egypt to present its image correctly in front of business and financial communities as well as the development partners. This is especially regarding the real political, security, and economic situation in the country, which would make it easier for huge investments to flow into the industrial sectors. This way, it would contribute to growth rates and provide more job opportunities, increasing employment rates.
Although Al-Zorba said the recent government policies are weak, he agrees with most items. Of particular importance is the decree on lowering energy subsidy to relieve burden on the state budget. However, he also believes these reforms have to be accompanied with some social procedures to protect citizens from the price increases.
Al-Zorba demanded the government quickly revise all economic legislations making market entrance and exit procedures easier. Quick legal action in case of any investment conflict between the government and the private sector is also needed.
“Re-gaining trust in the economy will speed up the flow of direct foreign investments which have dropped ever since overthrowing ex-President Hosni Mubarak especially in the industry sector. Egypt used to attract direct foreign investments at roughly $8m annually,” said Al-Zorba, quoting data from the Central Bank of Egypt (CBE).
Mohamed Eliafy, Regional Manager at CPC Products Holding Company, and a significant figure in the Egyptian industrial development sector, said that since the 25 January Revolution, the Egyptian government did not offer land to developers. Eliafy added that issues are mainly because procedures take too much time. The group, which is also affiliated to Saudi Binladin Group, needs facilitations and procedure speed-up.
Singapore and Malaysia are currently the strongest global foreign investment attractors because of their fast procedures for establishing companies and for land licences and all the other procedures, Eliafy said. Egypt needs to overcome its own problems on this score for the industrial sector to recover, which is the main sector of work.
He added that the group leaders have a good plan to build industrial complexes in Egypt soon.