Egypt Business Overview

Business and Economic Overview

Alongside moderate growth forecasts, the current inflation rate of 23.5% is expected to rapidly decrease and average 7% by 2022, although inflation has been historically unstable. Despite having a diverse export economy and currently manageable debt, Egypt continues to remain heavily reliant on imports and runs a twin deficit: its imports account for roughly 2.5 times its export earnings. Egypt, however, retains the political and financial support of Western Countries and the majority of the Gulf nations, who in the past have provided large injections of foreign currency.

Meanwhile, the sluggish nature of resolving disputes is a foremost obstacle to doing business, and outside of the Petroleum Ministry, the government is unwilling to include international arbitration clauses in commercial contracts. Alongside high corruption levels, the high poverty rate, rising unemployment and lack of bureaucratic transparency all prove to be obstacles to business and investment. As such, Egypt is ranked 128 of 190 in the World Bank’s Doing Business index and 103 of 190 in the Starting a Business Index.

Egypt does, however, offer numerous opportunities. Egypt is the largest oil producer in Africa outside of OPEC and the government actively encourages international investment in the oil and gas sectors, which equate for 16% of GDP. As such, there are opportunities in exploration, engineering, procurement and petrochemical projects relating to the hydrocarbon sector. 

The Egyptian government has also committed to supplying 20% of generated electricity from renewable sources by 2022, thus there is a great push for the procurement and expertise relating to wind and solar energy. The construction sector has rapidly grown for the past 30 years and is likely to continue to do so because of the demand boom for residential houses, and the subsequent infrastructure needed to support population growth. 

Meanwhile, the ongoing Suez Canal Area Development Project offers a large variety of opportunities for government and private contracts as well as investment. The project seeks to enhance the region through the improvement of five ports as well as the construction of new industrial, agricultural zones, technology centres and a city. Furthermore, demand in the security sector is forecast to grow by 15-20% over the next few years, with the Ministry of Interior and Defence providing much of this demand.