The land of the Pharaohs has experienced some changes over the years.
Its economic activities however still revolve around the same sectors. With a huge part of the population being youthful, there is both potential and a demand for more growth.
What Are Egypt’s Strategic Industries?
Despite being mostly a desert country, Egypt has a number of industries driving it’s economy. Here are the top three.
1. Oil and Gas
As a significant player in global oil production and estimated to have almost 4 billion barrels of oil in reserves, Egypt heavily relies on this industry. The country’s twelve oil refineries are intended to make it self-sufficient as far as oil processing is concerned.
Egypt is also a producer of natural gas and exports some of it to the Middle East through the 1,200 km Arab Gas Pipeline.
Tourism is a big part of Egypt’s economy with the Pyramids of Giza being the main attraction. Other tourist attractions in Egypt include the Egyptian Museum which houses at least 120,000 Egyptian antiquities; Abu Simbel, an archaeological site with two rock-cut temples; and cruising the Nile.
The vast desert that is Egypt gets some needed relief from the Nile river. The country’s agricultural sector thrives on the fertile grounds of the Nile valley and delta.
With millions of acres of productive land, Egypt produces rice, wheat, cotton, sugarcane, tobacco and onions. All the same, as impressive as the industry is, it doesn’t satisfy the local demand.
Business Opportunities in Egypt
Egypt offers unique opportunities for business investors although these might not be in the traditional fields.
1. Tours and Travels
As a major contributor to the country’s GDP, any tourism-related business is sure to have good returns. One very viable investment option is in the travel and tours sub-sector.
A smart way of winning the game would be to advertise in countries like Russia, Saudi Arabia and Europe where most tourists come from. Businesses can also partner with international tours and travels companies and “exchange” tourists to guarantee business flow.
There is a huge demand for food in the local market. With grains being a staple among Egyptian households, investors who can produce these with minimum water resources can thrive.
Not only is there a ready market for the produce, government support is sure since such a business would help attain food security.
3. Information Communication Technology
Over 50% of Egypt’s population is below 25 years. This population group is tech-savvy and is a potential supply of talent for tech-related businesses. Egypt is also a leader in outsourcing services in the region.
The government is working to improve the country’s ICT infrastructure. This creates a ripe environment for IT-related businesses to grow.
4. Financial Services
With efforts to grow the economy, financial services are necessary. From banking and insurance to leasing, there is a need to encourage innovation by providing funding and financial advice.
Financial assets also need to be priced and the overall economic development determined. Since capital markets accurately reflect an economy’s performance, providing these services makes business sense.
Challenges Facing the Economy of Egypt
The biggest challenge that Egypt’s economy faces is desertification. Over ten thousand hectares of agricultural land is estimated to be lost every year due to desertification. This leads to an increase in food imports, negatively affecting the country’s trade balance.
Corruption has also affected businesses in Egypt. Favoritism pushes businesses to engage in corruption so as to survive. Middlemen provide “connections” to help navigate the complex government bureaucracy making it challenging for new or small businesses to succeed.
Egypt’s Business Location Hubs
Business in Egypt thrives mostly in the tourism and agriculture sectors. The best areas for tourism-related business are Cairo, Giza and Luxor. Sugarcane production is also a business option in Luxor.
Suez is good for oil-related business due to its refineries. Tanta and El-Mahalla El-Kubra are the best locations for agriculture and textile manufacturing businesses.
About Market Research in Egypt
Unlocking key insights about a market is a step businesses must take before making an investment. At SIS International Research, we help businesses carry out market research through methods such as surveys, focus groups, online communities and voice of the customer research.
Our aim is to empower businesses to start well and have a growth strategy in place.