Daily News Egypt sat down for an interview with Minister of Trade and Industry Amr Nassar to know more about his strategies and policies in achieving the desired industrial development after a period of three months being in charge of the ministry. The transcript for which is below, lightly edited for clarity:
Can you talk about your strategy for promoting industry in coming period? The strategy mainly based on Upper Egypt’s development, along with adopting industrialisation for others and the exploitation of idle productive capacities, as well as the development of an ambitious export plan focused on certain export markets, aimed at enhancing the competitiveness of the Egyptian product, in addition to the reformulation of import restriction procedures.
What happens to be our ministry’s plan to increase Egypt’s exports?
The ministry has developed a policy to identify manufacturing opportunities in Egypt and gain all the benefit from them, especially, the value-added industries with a competitive advantage that is positive for export rates.
Furthermore, the increase in exports is linked to an increase in industrial production, which is associated with the increase in establishing new factories or the exploitation of available production capacity and operate them. By the way, Egypt can manufacture everything, even rockets.
I praise the industrial investment map launched by Tarek Kabil, former Minister of Trade and Industry, in October last year. The map contributed to the availability of a comprehensive database of the industrial sector in Egypt.
How many operating factories, number of stumbling factories present currently?
We have about 14,000 operating factories, 4,000 factories under construction, and 4,500 stumbling factories.
The operating factories run within 60% of their production capacity and 40% of their capacity is not exploited.
Can you elaborate on your plan to exploit available manufacturing capacities?
The ministry is working on exploiting the available manufacturing capacities through two axes. The first is the vertical expansion through the exploitation of idle production capacities and the search for the mechanisms of operation. The second axis is to exploit the current capacities of existing factories and stimulate them to work at full capacity.
Nevertheless, the ministry is seeking, in cooperation with the Industrial Modernisation Centre and the Industrial Development Authority, to utilise unused productive capacities and the operation of three to four factories from idle factories before the end of the year.
What latest updates on ministry’s efforts to expand in launching industries in remote areas?
The ministry is in the process of expanding the idea of “your factory next to your home”, an idea based on setting up factories in remote and rural areas to reduce labour migration and job creation.
Qualification of workers is an important process that is not difficult at all, on the contrary, especially, as the Ministry of Investment and International Cooperation with the Ministry of Education and vocational training, are collaborating to provide programmes for qualifying workers during the period of only six to eight months.
One of the first areas we are heading to be Upper Egypt on the basis of providing hob opportunities and development of Upper Egypt. We focus on setting up prefabricated complexes with 300 sqm for every unit, serving small and medium- sized enterprises (SMEs) and developing feeding industries sector.
The role of the ministry depends not only on the establishment of these complexes, but also help in marketing, management, and linking their products which need large factories, as well as to reduce foreign imports, and increase their added value.
Additionally, the ministry is keen on expanding in establishing prefabricated complexes before the end of the year.
The prefabricated complexes adopted by the ministry are a powerful weap on to confront industrial land brokers. How to stimulate SMEs?
The ministry seeks to expand in SMEs and micro industries sector, especially, the handicraft sector, and can be two to three people to establish a handicraft project; to grantee that each year 7-8 million has a handcraft project to ensure a steady income for those individuals.
We are focusing on Upper Egypt and women to set up such projects, by which the ministry will provide them with training programmes and will help them in the provision of raw materials, and marketing their products.
Can you shed light on your plan for Egypt’s foreign trade issue?
Regarding the foreign trade, the ministry has drawn up a plan to identify target export markets, which included three regions, Africa, including the eastern and western parts and the centre, and the southern and northern regions excluded due to weak competitiveness of Egyptian products.
Among the target export markets in Central Asia, especially, Kazakhstan,Uzbekistan, Azerbaijan, Eastern Europe, Syria and Iraq, we expand in the African market with five countries in the west and two in central Africa. That plan along with the continuation of regular exports such as ready-made clothes for the United States of America.
In addition, the ministry does not consider the African market only as an export market, but we seek to provide service, advice, and export. This is done through cooperation with a number of ministries, the Industrial Modernisation Centre and the Industrial Development Authority to transfer manufacturing expertise, integrate, and cooperate with them in the development of transport and health systems and equipping hospitals, roads and infrastructure through the largest Egyptian companies such as the Arab Contractors company.
Egypt’s exports to Africa represent 0.007% of Egypt’s total non-oil exports annually and account for only 1% of Africa’s imports from the world. Consequently, through our export plan, we seek to increase Egypt’s exports to Africa to 2% of its imports from the world.
The ministry focuses on a number of export industries that are most popular and capable of doubling exports and have added value, namely engineering, food, chemical, pharmaceutical, building materials, and ready-made garments.
What type of ministry’s efforts available to pay exporter’s dues?
The state is committed to pay financial supports to exporters. The ministry works with the Ministry of Finance to pay exporters’ dues arrears and seeks to create an attractive export support system.
Two years ago, the Ministry of Trade and Industry approved new export support controls, including incentives for exporters to African markets. The government’s most recent incentives was to provide 50% support for shipping costs to Africa and the Export Development Authority would provide some logistical incentives to African countries’ pro- motional missions. As well, opening new markets and linking export incentives to the ratio of local component in products.
Do you intend to review recent import procedures taken by former ministers?
The ministry is reformulating imports mechanisms to maximise benefits of imports by focusing on importing goods and commodities for the purpose of industrial development and not importing consuming products that are useless. Egypt’s non-oil imports increased by 14% during the first half of the current year.
Egypt has the right to negotiate on identifying the quality of imports. I think the regulatory measures of imports that have been taken during the last period are incorrect and globally impede Egypt’s exports.
The ministry is studying reconsidering decree No 43/2016 concerning the registration of foreign factories exports to Egypt in the General Organisation for Export and Import Control (GOEIC).
In 2016, Kabil issued a decree No 43/2016, which stated that foreign factories exporting to Egypt should create a record at the GOEIC to restrict low quality imports.
On the other hand, the ministry also examines mechanisms to combat smuggled imports because they drain foreign currency. Furthermore, the ministry is considering reviewing all trade agreements signed by Egypt to achieve the maximum benefit from them.