Egypt’s City of Gold

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Fri, 07 May 2021 - 11:11 GMT

Gold Jewellery- CC via Egypt Today/ Samar Samir

Gold Jewellery- CC via Egypt Today/ Samar Samir

In a bid to revive the gold industry and attract investments, and building on 3,000 years of civilization, Egypt has recently announced the establishment of a new city for the manufacture and trade of gold. 

Following the directives of President Abdel Fattah El Sisi, the city of gold is set to include units of delivery and storage, factories, workshops, gold shops, a gold-craft school,  as well as services like a branch of jewelry stamping and scales, a museum, an educational park for children, a dining area and a logistics center. 

Head of the Authority for Jewelry Stamping and Scales Major General Abdullah Muntaser tells Business Today Egypt, “[Equipped] with highly modern technology, the city will be a world destination where traders from Italy and the UAE can exhibit their pieces of jewelry.”

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Envisioning the city of gold

The new city will be built on about 60 feddans; and the government is currently considering two locations, either the New Administrative Capital or Obour city. According to Executive Manager of the New Administrative Capital Major General Shaaban Dhahy, the final decision regarding the location is up to the Ministry of Housing.

Officials have, however, indicated that the New Capital is the more probable choice. 

Dhahy clarifies that the area allocated for the new city in the Administrative Capital would be near a mall called Souq El Dahab (the Market of Gold). The eight-floor mall will cover an area of 8,300 square meters, and is built to stimulate El Sagha, Egypt’s most famous district for gold jewelry shopping located in Fatimid-era old Cairo.  “It [the mall] will include five commercial floors and three other administrative areas,” Dhahy says.

The gold city is set to host the big workshops in El Saghah of Khan el Khalili, Secretary-General of Gold Branch at the Federation of the Egyptian Chambers of Commerce Nady Naguib tells Business Today Egypt. “We will be an open market for the world as the products will not be expensive.”

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Additionally, a school dedicated to teaching gold jewelry industry skills will be established, Naguib says. The new school will have many branches, he explains. CEO of Egypt Gold company Mohamed Mustafa Nassar further shares that his company, which has a school focusing on the jewelry industry, can offer its expertise as a consultant, as they are working on developing new cadres for the profession.

The new city will also host a factory for refining gold ore. “This new plant would save a large amount of hard currency and offer a great quantity of gold, enough for producing jewelry for exporting,” Naguib says.

Naguib further affirms that the city seeks to relocate gold merchants and workshops from El Sagha, as part of the national project targeting the development of Old Cairo. However, the relocation is not mandatory. “Some gold merchants will benefit by opening new branches in the new city to expand their business. However, as far as I can see, the number of those merchants would not be large” because the majority prefer keeping their old shops which their clients are accustomed to, particularly in the governorates like Tanta or Mansoura, Naguib explains. 

A trader at El Sagha shares that facilities should be offered to traders if they are moved to the Administrative Capital, such as a free-duty industrial city in order to compensate for the cost of moving their business.

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According to head of the Authority for Jewelry Stamping and Scales, they are already coordinating with the Ministry of Finance on this matter, seeking to introduce facilitations such as eliminating some fees. 

Taking a firmer position, another trader believes that people will refuse to leave their areas, further wondering how the government can compensate them. “Relocating people is not an easy way. I personally reject this matter. I have been living in Cairo for 40 years,” he says. He further adds that opening the door to exporting gold jewelry to foreign markets is more urgent than establishing a new city in order to get new clients and consumers. “The current market is much bigger than its targeted local clients. The local market cannot bring considerable revenues in order to expand the investments in a new city,” he continues,  calling for providing facilitations to export gold products first. 

Gold merchants have been complaining about some hurdles that come in the way of exporting their jewelry products, such as imposing added-value tax and stamp fees, in addition to the long procedures that take six days, compared to a few hours in other countries like Dubai.

According to a January report by the Export Council for Building Materials, Refractory & Metallurgy Industries (ECBM), Egypt’s exports of gold, jewelry and gemstones jumped in 2020 to $2.982 billion, compared to $2.036 billion in 2019, with a growth of 46 percent. These precious products were exported to about 36 countries, including four new ones: Croatia, the Czech Republic, Austria and South Korea. 

 

The feature was published in April issue of the Business Today Magazine

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