Business in Egypt is on the rise, exponentially growing from only a couple thousand new businesses registering in 2008 to more than 14,000 in 2020.
It was the 8th largest contributor to global growth in 2019, according to Bloomberg. Geographically speaking, it is a prime location for proximity and access to markets in Europe, Northern Africa, and the Middle East.
As the TMF Group concisely captures the narrative of this data: “In just a few years, Egypt has transformed itself from a nation struggling with political and civil unrest into a rapidly growing economy which is a hub for businesses across the Middle East and North Africa. There are investment opportunities in a variety of sectors, attracting interest from around the world. However, the business environment remains complex, and companies should seek the advice of local experts before entering the market.” So how can you and your business make the best use of possibilities in Egypt?
First and foremost, Egypt’s population is growing at the rate of about 2 million people per year. With less civil unrest and more emphasis from the government on expanding the local economy and trade, the country is prime for tapping into a growing market and growing workforce. “Young people are powerful catalysts for social and economic development and change. In Egypt, approximately 60% of the population is under the age of 30, and 40% is between the ages of 10 and 29” (Source). The workforce potential in Egypt is staggering!
According to TMF Group, “Egypt’s GDP grew by 3.6% in 2020 and 3.3% in 2021, while the pace of growth is expected to surpass 5% in 2022 and remain strong in the coming years”. Additionally, “Egypt is the one the region’s largest recipients of FDI (foreign direct investment), which is attracted by Egypt’s enormous domestic market, strong GDP growth, strategic geographical position, and large and educated talent pool.” The government, with monetary support and encouragement from the International Monetary Fund (IMF) ($20 billion in the last 6 years alone) and the World Bank, has feverishly been developing and upgrading public public infrastructure such as roads, railways, and ports have been upgraded. Getting goods in and out of Eygpt, therefore, is easier and more cost-effective than ever before.
However, New York Times cautions the government is borrowing too heavily, quadrupling the national debt over a decade. The article warns will lead to debts Egypt will not be able to pay, putting it into a precarious position with Chinese investors, nearby nations at war, and countries wanting to take advantage of its economic viability. to fund the megaprojects, as well as billions of dollars in international arms purchases, helping to quadruple the national debt over a decade. Egypt is making too little to cover its debts. They state, “Foreign investors have mostly stayed away from Egypt, deterred by the military’s tight grip on the economy. That, combined with a lack of focus on developing domestic industries, has meant the private sector, outside oil and gas, has contracted every month for nearly two years.” New York Times advises investors looking to Egypt for business keep an eye out for signs of positive change that will bring more financial security to investing in Egypt’s economy such as Egypt “loosening the military’s economic grip and jump-starting private industry.”
On the other hand, points to improved security as a main driver in attracting more investment and tourism to Egypt. They claim the security situation has “improved significantly in recent years. The government has stepped up security measures, which have improved personal safety and ensured that Egypt’s crime rate is now relatively low” (TMF Group). The Oxford Group’s data clearly shows things are certainly improving in Egypt: “In the “Doing Business” 2016 report Egypt was ranked among the best-performing countries in the MENA region in terms of starting businesses, with eight days to register a company, compared to 40 days 10 years ago.” Overall, TMF Group advises those looking to expand their business into Egypt consider the following: “Despite recent reforms, the tax and regulatory environment remains much more complex than in other countries within the region. For example, Egypt has many different forms of taxation, and companies must file separate returns for corporation and property taxes and stamp duty.
The country’s labour laws and its social security system are also complicated, and dealings with the administrative authorities are further hampered by the fact that Arabic is the sole language used in official government portals for tax, social insurance, customs and the commercial register.” Thus, those considering taking their business to the Egyptian market should consider partnering with or consulting with an agency that knows the ins and outs of the current Egyptian economic atmosphere.
Our data intelligence platform can help you understand the ongoing trends in Egypt and in 20 other countries in Africa. This provides you with valuable insights that can help you or your business make fast data-driven decisions. It is certainty a place primed for opportunity but knowing exactly when to take on that opportunity may make all of the difference.
Contact our team today to explore how our economic intelligence can empower your decision-making process. Win with confidence with Kasi insights https://www.kasiinsight.com/thehub
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