The trade volume between Egypt and the United States approached $3bn during the period January-April 2019, up 27% when compared to the same period in 2018, the new President of the American Chamber of Commerce in Egypt (AmCham Egypt), Sherif Kamel, said.
“Egypt and the US have been enjoying a long strategic partnership for many years and we have a good, evolving and promising economic story to share with the US business community which can lead to more cooperation in different sectors of the economy,” he noted, adding that the bold reform measures taken by the government of Egypt coupled with the improving macroeconomic indicators are encouraging US companies and others to look at the various opportunities in the marketplace.
Daily News Egypt interviewed Sherif Kamel for his first interview with the media since assuming office.
How do you assess Egypt’s relations with the US with a particular focus on the business side?
The Egypt-US relations date back a very long time. The collaboration between the business community in specific in both countries is diverse and is actively present in different sectors creating business, trade and employment opportunities. Moving forward with the steadily improving business and investment climate, I expect US companies already operating in Egypt to increase their investments as well as other US companies becoming interested because of the massive opportunities that Egypt offers given the size and the potential in the market. This is usually manifested during the regular AmCham visits to the US as well as during the business missions organised by the US-Egypt Business Council to Egypt.
What is the amount of trade exchange between Egypt and the US during the first four months of 2019?
The US is among Egypt’s largest trade partners with a value of $6.9bn in 2018, ranking second after China. This accounted for nearly 3% of the GDP in fiscal year (FY) 2017/18 and 4% of the Middle East and North Africa (MENA)-US trade volume in 2018, registering double-digit growth supported by a 52% increase in exports to the US and a 27% increase in imports from the US to Egypt. It is worth noting that Egypt is the US’s 40th largest importer and ranks 64th among exporters to the US. The trade volume between Egypt and the US approached $3bn during the first four months of 2019, up 27% from the corresponding period of 2018. The trade deficit widened by 14% as a consequence of imports surging by $400m (22.5%) from $1.69bn to $2.1bn, while exports rose by only $228m (34%), from $664m to $892m. Non-petroleum exports comprised of 80.2% of total Egyptian exports to the US, increasing by 44% over the same period. Egypt’s top non-petroleum exports to the US are textiles and clothing, iron and steel, and aluminium products. Egypt’s top imports from the US are soybeans (mainly from Louisiana), civilian aircraft (mainly from Washington), and wheat (mainly from Louisiana and Texas). According to Egypt’s Ministry of Investment and International Cooperation, the stock of US direct investment in Egypt stood at $22bn in 2018. The Apache Corporation is the largest American investor in Egypt, with current investments totalling over $18bn. In 2018, there were a total of 1,576 companies with US capital operating in the Egyptian market, of which 91 companies were new entrants in that year. Around 92% of total US investment in Egypt is concentrated in energy and mining. American firms are active in most non-petroleum economic sectors as well, with their greatest participation in financial services and manufacturing. According to the Central Bank of Egypt (CBE), the US ranked the third largest (after the UK and Belgium) in terms of investment inflows with a value of $1.07bn or 16% of total foreign direct investments (FDIs) inflows to Egypt over the first half (H1) of FY 2018/19.
Can you shed some light on your background and how you see the direction of AmCham Egypt in the next few years?
I started my career working for the Cabinet of Egypt Information and Decision Support Center, then moved to work in consulting for the private sector and international organisations while engaging with several private sector initiatives and projects then I made the switch to academia. In academia, besides teaching, I have been leading executive education then became the dean of the school of business at the American University in Cairo. The way I see it, a dean of a business school in today’s time and age is in fact a CEO of an enterprise; that is the only way to make the school current, competitive, and agile. The ecosystem of a business school is not only about on campus academic programmes but more importantly, it is about serving and extending different activities and offerings to the community. There are four key areas to serve the young and growing community in Egypt which are entrepreneurship and innovation as a mindset–which is extremely important for our economy and to encourage and boost the private sector– responsible business–which is how to give back to the community and to engage with a value-added impact–while the fourth interest is inclusive development which cuts across the whole economy and improves its indicators with a positive impact on the population at large as we move forward. Throughout my career, I was fortunate to have had a diversified experience having worked in academia, the private sector, and the government as well as having served both in Egypt and in other countries in several board of directors of funds, companies, banks, NGOs, and universities. I have been part of AmCham for many years, and have previously served as executive vice president, board member, and chaired several of the chamber’s core committees including Information and Communication Technology, Entrepreneurship and Innovation, International Cooperation and Education many years and now being AmCham president is just a continuation of the engagement that I already have. As for the direction for the next few years, I would be focused on building upon the efforts of my predecessors in the AmCham board of governors including to continue to promote Egypt as a destination for business for US companies and to support Egyptian enterprises in identifying business opportunities in the US market; the annual Doorknock mission, where a delegation of top-level executives representing companies and businesses that operate in Egypt visit Washington, DC to meet with the US business community and others to share different opportunities and prospects about Egypt’s economic and business environment.
How many members does AmCham include?
We have over 900 AmCham corporate members and close to 2,000 individual members.
AmCham recently announced the establishment of an advisory council for AmCham Egypt Inc in the US; Can you please elaborate on its future plans?
AmCham Egypt is always looking to create business, trade, and investment opportunities for Egyptian companies in the US and for US companies in Egypt and to promote Egypt as a destination for business for US companies. Accordingly, the regular coordination with AmCham Egypt Inc, the chamber’s permanent representative in the US, led by Hisham Fahmy as CEO, is focused to further bilateral economic ties; and the planning and organisation of sector-specific business missions for AmCham members to identify business, trade, and investment opportunities with their US counterparts. Furthermore, AmCham Egypt Inc. is expanding its scope of work and operations in Washington, D.C., including stakeholder outreach efforts, taking part in speaking engagements across the US, hosting roundtable meetings and events, and issuing the AmCham Inc. quarterly newsletter. Earlier in April 2019, DNE reported that Hisham Fahmy announced the establishment of AmCham Egypt Inc. Advisory Board in the US Its mission is to work towards enhancing the organisation’s mandate and scope of activities. The advisory board includes a number of key US business leaders and executives with extensive and diversified experience and are highly reputed in the circles of decision-making. The advisory board aims to amplify the role played by AmCham Egypt Inc in supporting and maximising the benefit of the strategic relations between the two countries, in addition to increasing the volume of investment and trade exchange between them. Greg Lebedev, senior adviser to the president and CEO at the US Chamber of Commerce, said that this advisory board helps facilitate the chamber’s functions in America, especially with regard to pushing US investments into the market and enhancing cooperation in different fields, according to DNE previous reports. Lebedev also noted that Egypt has a fertile soil for investment which is advantageous for US investors through the injection of new investments in the country.
Will AmCham Egypt host ministers soon?
AmCham regularly organises events with cabinet members and government officials so that they can share with the AmCham members the different developments taking place in various sectors and in the economy at large. On July 2nd, we hosted Minister of Electricity, Mohamed Shaker, who gave an overview of the sector and the title of the talk was “Energy Transition in Egypt”.
What are the updates of AmCham reports?
We release a variety of reports including the business monthly magazine, the industry insight series, Egypt watch bulletin, Egypt economic profile, Egypt economic indicators, and others including sectoral reports, in addition to the documentations that are released on the occasion of some events including the Door-Knock missions and others.
What do you think of Egypt’s economic performance?
The government took several decisions as part of an overall reform programme to improve the economy. Currently, the economic numbers are improving offering opportunities for foreign investors from around the world to invest in Egypt. The macroeconomic indicators are encouraging companies to look at the market as an opportunity in addition to its traditional advantages as a large market. If we look at the indicators, we find that we have gone through a difficult period of time and we have come a long way to a steady, improving economy. Figures were very difficult at some point of time, but the important thing is the gradual improvement taking place now. For example, inflation recorded a high figure in July 2017 and now it declined, which is promising. Inflation is expected to rise again because of the movement of subsidy, yet the most important thing is that the economy is in the right direction. Moreover, GDP growth records more than 5% with an even more positive outlook for the FY 2019/20 which is another extremely healthy sign. Unemployment rates are still high, but the overall direction is positive. The structural reforms included some tough decisions, but they were key to move forward and in parallel the government took multiple actions to try to mitigate their impact on the community and I think that the society will start realising the benefits of these reforms in due time.
I believe that economic reforms are a journey, not a destination. Egypt has been working with the IMF for the past three years to grow its opportunities across all sectors. The continuation of the IMF’s technical support to the Egyptian economy is welcomed. We need to look at the sectors that have the biggest potential and align efforts, strategies, and decisions to try to strengthen the benefits. The ultimate objective is to offer an environment that is encouraging to local investors first, but which will also positively impact the foreign investors’ decisions. If we as Egyptians are increasingly supporting and endorsing our economy, that will give a sign of trust to foreign investors that are aiming to come to Egypt and invest in the market. We are thankfully seeing increasing numbers of tourists in the market which is very important for the economy because all sectors are related to each other and impact each other. This is a huge opportunity for Egypt and could be a game changer for the economy.
The Egyptian government launched several initiatives to support the small and medium-sized enterprises (SMEs) sector; How can these initiatives positively impact economic growth?
Egypt’s population is about one hundred million. About 60% of the population is under the age of 25. The population’s connectivity hours per day is massive with an increasing appetite in starting-up their own businesses. The government, together with the private sector, and the civil society, are pushing the SMEs sector through financing in addition to raising awareness, support, mentorship, and more. When the government encourages SMEs to increase their numbers, more job opportunities are created. SMEs and startups usually focus on solving the issues that face the society. Recently I attended an event where 18 startups were pitching their businesses in different fields in sports, healthcare, construction, interior design, and podcasting knowledge in Arabic. This sectoral diversifying is very healthy for the economy. Furthermore, the multiple initiatives that were announced by the different constituents in the ecosystem to create more jobs and making the market more competitive is important. We need more SMEs support in the different governorates not only in Cairo. For the past 10 years, I have been a strong advocate that each and every university in Egypt should have an incubator where students would early on be involved in startups and that would encourage creativity, innovation, and discovery and the private sector in general. Fresh graduates are always very ambitious to start their own businesses and they always need a platform to try their ideas and get the right support, advice, and mentorship.
What are your recommendations to attract more US companies?
Every country around the world tries to make its investment environment easier, simpler, open, and welcoming to investors and different businesses. There is a worldwide competition out there. We always need to reach out and offer an inviting ecosystem to investment opportunities that come from the US and around the world. I think that the nature of Egypt, including its geographical location, the size of the market, its diversified opportunities just to mention a few is a huge advantage. However, we have to admit that despite all the efforts and actions that were taken to facilitate and improve the business climate in Egypt, there is still some way to go to make the environment not just more attractive but ahead of the pack and leading all our peers as a model destination that works as a magnet to business opportunities. As AmCham, we try to always play a role as a platform to share the concerns of US companies operating in Egypt with the government and to try to help in any way possible to help solve those issues. The government always tries its best to address those issues and shows continuous support. Given the competition that I mentioned earlier, there will always be issues that will appear as in any other market, the key is to handle them effectively and timely. Investors are always looking for a healthy environment to expand their business and I truly believe Egypt is a unique opportunity to create such an environment.