FILE – Mahmoud Soliman, Head of Investment Committee at FEI
CAIRO – 2 December 2017: The investment’s growth rate in the industrial sector hikes up by 30 percent in 2017, the Head of Investment Committee of the Federation of Egyptian Industries (FEI), Mahmoud Soliman, told Egypt Today on Saturday.
Soliman added that there are a number of reasons behind the increase, such as the issuing of the Industrial licensing Act, the pound flotation, and restrictions placed on non-basic imports.
“Reducing imports resulted in a domestic industrial growth because it enables Egyptian manufacturers to produce local alternatives with home components,” Soliman explained.
He pointed out that the additional investments in the industrial sector helps to increase the production output, increasing the gross domestic product (GDP), which ultimately leads to greater economic growth rate.
Talking about the challenges facing the industrial sector, Soliman noted that the sector suffers because of the 20 percent interest rate on finance. The interest rate should not be higher that 12 percent, or else government support would be required, he elaborated.
Soliman called on the Central Bank of Egypt (CBE) to consider the exceptionally high interest rate and reduce it to around 12 percent.
Furthermore, Soliman called on the government to eliminate administrative blockages when dealing with investors.
According to a statement by the Head of the Industrial Development Authority (IDA), Ahmed Abd el-Razek, 2085 new factories have opened since 2016 with a total investments value of LE 58 billion ($3.3 billion).
Abd el-Razek attributed the rise in the establishment of new factories to law No.
15/2017 that facilitated the procedures of licensing industrial establishments and its executive regulation. Abd el-Razek suggested that the law caused a revolution in industrial investment rates in Egypt during the recent period.
The Egyptian government is applying a comprehensive economic reform program that aims to improve the tough economic situation that has been continuing since 2011. The country is targeting $10 billion in foreign direct investments (FDI).