The Arab-German Trade Directory - Ghorfa

Hisham Zazo, the country's first assistant
tourism minister, said that the sector
comprises 11.3% of Egypt's GDP and
19.3% of the total investment made in
foreign currencies. Zazo said, "Egypt plans
to attract 14 million holidaymakers and
boost hotel capacity to 240,000 rooms by
2011." Leisure tourism is the largest
segment, with business and conference
tourism coming in second. Hotel capacity has
been increasing by 5% per year. More
development is on the horizon and the
ministry of tourism is working to make
licensing and land purchasing easier, focusing
on the northern coast for both residential and
foreign tourists.
Construction & Real Estate
The last two years have been good ones for
the construction and real estate sector with
increased activities ongoing in the sector.
Accounting for some 7.1% of GDP in
2008/2009, high-profile real estate projects
and improvements in the country's tourism
sector drove the industry. The need for lowcost
housing and infrastructure development
should help to push the industry onwards.
Rapid population growth has created the
need for 22 new cities in 2008/09, all of
which will need a considerable amount of
real estate. The introduction of mortgage
facilities will give a boost to the real estate
sector and as businesses and investors start to
look beyond Cairo the real estate boom looks
set to spread outward beyond the capital.
IT & Telecoms
Along with other major infrastructural
changes, telecommunications in Egypt have
come a long way in the past 10 years. The
private sector is just starting to emerge,
allowing for more competition in terms of both
prices and services. Call charges for mobile
phones have been dropping significantly for the
last five years and the entrance of a third mobile
operator, Etisalat Misr, is increasing competition
even more. The issuance of 3G licenses is also
causing waves in the industry and the country
is bracing itself for a more open market. IT is
also becoming a more important sector.Outsourced
call centres are becoming major employers and
a new emphasis is being placed on computer
literacy both in schools and workplaces.
Foreign Trade
Egypt has a large structural trade deficit,
The Egypt section
is sponsored by
which reached $25.2bn in 2008/2009, up
from $23.4bn in 2007/2008. Merchandise
export decreased in 2008/2009 to $25.2bn
from $29.4bn in 2007/2008. The import bill
decreased by 4.7% to $50.3bn in 2008/2009
from $52.8bn in 2007/2008. The invisibles
surplus of $25.4bn was insufficient to offset
the trade deficit, and the current account
recorded a deficit of $4.4bn in 2008/2009.
Forecast
The Economic Intelligence Unit (EIU)
shows that all categories of Egypt's
business environment rankings are forecast
to improve.
The categories that are expected to
improve the most are: foreign trade and
exchange controls, as imports tariffs
continue to be lowered; financing, as small
and medium-sized firms gain greater
access to the stock-market, banking
regulation improves and banks step up their
risk-assessment strategies; taxes, because of
ongoing improvements to the tax administration;
the macroeconomic environment, as robust
economic growth is expected to continue;
infrastructure, as the government invests
heavily in road, rail and sea facilities; and
government policy towards private enterprise
and competition, as privatisation continues
and competition legislation is improved.
Market opportunities will also improve in
the future as a result of greater economic
diversification and better foreign investment
policies. After slowing sharply in 2008/09
and 2009/10, economic growth is projected to
strengthen over the remainder of the forecast
period, to an average of 6.7%, slightly below
the growth rates recorded between 2005/06 and
2007/08. The government's infrastructure
programme and continued economic reform
will increase growth potential in the longer
term and productivity.
Investment
The prime drivers of the economy are
foreign direct investment (FDI), remittances,
Suez Canal fees and tourism.
Changes in economic policy have been
made to minimise the state's role. FDI
inflows reflect extremely positively on
global investment sentiment in Egypt. Data
released by the Central Bank of Egypt
reveals that Net FDI inflows increased from
$509.4 million in FY 2000/01, to reach
$11.1 billion in FY 2006/07 and $13.2
billion in FY 2007/08, approaching $21bn in
July 2007 to June 2009. According to the
World Investment Report published in 2008
by the United Nations Conference on Trade
and Development (UNCTAD), Egypt was
ranked first in North Africa and second in
the African continent in attracting foreign
direct investments.
Modernization has brought a great deal of
investment, with the year 2006/07 seeing
$7.48bn worth of funds flowing into the
industry sector.
Purchases of new cars are increasing,
indicating greater wealth and confidence
among consumers. Following global trends,
economic zones and industrial parks are
offering generous advantages to companies,
boosting trade and attracting even more
investment.
A sudden reduction in import taxes and a
growing middle class has also created a
healthy environment for the retail sector
and the Global Retail Development Index
ranked Egypt at 14th place in terms of
potential.Meanwhile,new shopping complexes
and malls are appearing along with the
introduction of international brand names.
Germany-Egypt Trade
Egypt is one of the principal trade partners
for Germany in the Arab world. Bilateral
trade rose considerably in 2008, reaching
€3.9 bn. German exports to Egypt came to
€1.42bn in 2004, €1.7bn in 2005, €1.87bn
in 2006, €2.07 in 2007 and mounted up to
€2.68bn in 2008.
They contained primarily machinery,automotive
equipment, electronics and pharmaceuticals.
German imports from Egypt came to
€1.17bn in 2008, rising up from €0.78bn in
2007.
Egypt principally exports fuels, textile products
and steel products. From January to September
2009, German exports to Egypt slightly
decreased to €1.89bn (-2.8%) and German
imports from Egypt decreased to €0.68bn
(-28.7%) as a result of the economic downturn.