Why Egypt?
Egypt is, with
an annual GDP growth of 6.61 % (2022), a major emerging market economy and a
key member of Goldman Sachs' Next Eleven economies (N-11). Egypt recently joined the New Development Bank
(NDB), created by BRICS member states. Due to the ancient Egyptian civilization and its remarkable historical
attractions, like the Great Pyramids and the Nile, the tourism industry is a
major contributor to the GDP of Egypt. With 106 million potential consumers and
an annual population growth of 1.58 % (2022), Egypt is a huge and growing
market for consumer goods and an attractive market for any business.
The
Egyptian Government is also committed to achieve the Sustainable Development
Goals (SDGs). These are reflected in the framework of Egypt’s national strategy
“Sustainable Development Strategy (SDS): Egypt Vision 2030’’. The focus are
three dimensions: The Social Dimension (Health, Education and Culture), The
Environmental Dimension (Environment Urban Development) and The Economic
Dimension (Energy, Knowledge and Economic development). There is a potential
for green transition overall.
Egypt is among
the largest energy producers and suppliers in Africa. During COP27, hosted by
Egypt in Sharm el-Sheik, important initiatives, as the NWFE-program (Nexus of
Water, Food and Energy), was signed in order to advance the green transition
within the country. The local government and industry is aware of the climate related
challenges the country is facing, and their initiatives during the COP showed
their willingness to secure a more sustainable future for Egypt.
In December
2022, the IMF Executive Board approved a 46-month agreement under the Extended
Fund Facility (EFF) for Egypt in an amount of US$3 billion. The program
presents a comprehensive policy package to preserve macroeconomic stability and
a wide-range of structural reforms to reduce the state footprint and ease
inclusive and private-sector-led growth.
Egypt is
centrally located and well connected to the European, Middle Eastern, Asian and
African markets. 12 % of the world trade passes through the Suez Canal.
Below are
highlights from four very promising sectors:
Health
The health
sector in Egypt is interesting with a growing market, primarily due to the
demand from the constantly increasing population combined with strong
commitment from government. For example, Egypt aims to adopt inclusive
healthcare coverage, improve the quality of healthcare and develop the
pharmaceutical sector through Egypt Vision 2030. This presents great
opportunities for Danish companies, especially in non-communicable diseases
including diabetes and obesity, digitalization, blood safety and family
planning.
Energy
With a
plan to become a regional energy hub, Egypt is building wind farms, solar
power plants and increasing its hydroelectric capacity, aiming to increase the
share of renewable energy to 42% of the total electricity generated by 2035. In
addition, energy efficiency and green transition is more and more in focus.
Some of
Egypt’s mega projects includes the world largest solar park, Benban Solar Park,
located in Upper Egypt and the Zafarana Wind Farm, which is the first large-scale wind farm in one of the
windiest sites, in this part of the world.
Denmark has
been through a similar transition and is keen to share know-how with Egypt
through the Energy Section at the Embassy. Egypt is the fifth largest oil
producer in Africa and the third largest natural gas producer on the continent.
In addition, 9% of the world’s LNG trade passes through the Suez Canal.
Water
and environment
The Nile
River is the backbone of Egypt’s industrial and agricultural sector and the
primary source for drinking water, but there is a growing need to look for new
ways for water resources management in order to satisfy the national need.
Noticeable progress has already been made by increasing access to drinking
water from 90% (2015) to 97% (2019) and expanding the access to sanitation from
50% (2015) to 70% (2019). However, there is still an urge to ensure water
security. This creates great opportunities for companies and investors working
in this field.
Food
and agriculture
With a young population, representing one third
of the country, Egypt is the largest and potentially most dynamic and
fast-moving consumer goods market in the Middle East. The revenue of the
Egyptian food market amounts to US$ 183bn in 2023. The market is expected to
grow annually by 7.32% (CAGR 2023-2027). The Egyptians continue to show rising
demands for Food & Beverages, and with a growing population of 2.5% per
year who spend over 30% of their income on food, the Egyptian market offers
fruitful opportunities for potential investors.
Within its
Vision 2030, Egypt aims to increase the volume and productivity of both the
land and water units, raising the degree of food security of strategic
commodities, increasing the competitiveness of agricultural products in local
and international markets and improving the climate for agricultural and
aqua-cultural investments. All of these factors boost the need for Danish
high valued products.