Interview: Hassan Allam
How will the development of upcoming new cities help solve Egypt’s housing deficit?
HASSAN ALLAM: There is a housing deficit in the country. This requires building accommodation with the necessary infrastructure, as well as sufficient transport to allow citizens to move to these new and often remote locations. Hence, the country’s construction effort is being led by the government, under the leadership of President Abdel Fattah El Sisi, to not only build affordable housing, but also to make these places habitable as soon as possible.
Previously, the government set out on multiple construction endeavours to build accommodation for the average citizen. However, the building of necessary infrastructure did not follow suit. This in turn led to the existence of ghost towns.
On the other hand, the mortgage market in Egypt is almost non-existent. Therefore, mortgage implementation is definitely a necessity. The affordability of houses can also be met with much lower land prices. It’s the government’s role to ask for premiums with respect to land sales and land prices because it directly affects the affordability of the unit. A regulator could be put in place by the government to ensure that prices are managed, and if developers get hold of cheap land, they must in turn offer affordable housing.
What impact has the devaluation of the currency had on the ability of local construction firms to import housing materials?
ALLAM: There is very little material related to the housing industry that cannot be sourced from Egypt. Affordable housing has never been a problem. Most of the basic commodities are available here, including cement. Imported materials are generally associated with upscale housing, and more complicated and sophisticated buildings. Construction companies working in that segment have faced issues related to the float of the currency, however, the market is currently stabilising.
How will planned infrastructure and transport projects impact the local construction sector?
ALLAM: The construction sector employs a significant percentage of the workforce, and the current government’s expenditure in infrastructure and housing is very important. Concurrently, there is plenty of work for most local contractors, who have been specifically targeted.
In fact, it is a mission of the government and its agencies to allow local companies, rather than regional and international ones, to benefit from this construction boom and employ local labour and resources. This benefits the country enormously. Most companies have seen massive growth with doubling revenues, and this has significantly increased employment in the sector.
What opportunities can neighbouring countries offer to Egyptian companies?
ALLAM: Eventually the construction market here in Egypt will start normalising, not because the economy isn’t healthy, but because you can’t continue maintaining an infrastructure boom forever. By 2019 the government’s infrastructure expenditure will stabilise, and more focus will be given to industrialisation. Egyptian companies will then be faced with two clear opportunities: the first is that they will benefit from the growth of industrial construction work, and second, they will benefit from the rebuilding of neighbouring countries damaged by recent wars. Egyptian companies will likely move and expand their portfolio in construction efforts in countries like Libya, Syria, Iraq, Yemen, among others. Hopefully the same will happen in sub-Saharan Africa, not because they need rebuilding, but because they are developing and growing.
Read More from OBG
Focus Report: How Special Economic Zones are shaping Africa's industrial landscape
En Français As Africa embraces the transformative power of the African Continental Free Trade Area (AfCFTA), Special Economic Zones (SEZs) emerge as pivotal catalysts for regional economic growth.The impact of AfCFTA on SEZs on the continent is a key part of Africa’s growth, through improved market access, reduced trade barriers, and participation in regional value chains, which all enhance overall competitiveness. ESG considerations take centre stage, highlighting the imperative for …
Community development: Hamad Hareb Al Muhairi, Director-General, Abu Dhabi Housing Authority (ADHA), on financially and environmentally sustainable initiatives to meet rising demand for housing
Interview: Hamad Hareb Al Muhairi In what ways has recent population growth affected the housing market, and what strategies can address increased demand? HAMAD HAREB AL MUHAIRI: Abu Dhabi is committed to maintaining growth in all economic sectors, including government housing. Based on its role in developing and implementing housing programmes for UAE citizens, and setting related regulations and legislation, ADHA has adopted a flexible business strategy that considers the impact of popula…
Focus Report: Exploring the role of women and youth in Africa's agriculture sector
En Français The last few years have seen marked developments in the dynamic landscape of African agriculture. The continent's cultivated land has expanded significantly since 2020, contributing to 52% of the global increase in cultivated area, with sub-Saharan Africa leading agricultural output growth. This report highlights the importance of transitioning to knowledge-based farming systems through initiatives from organisations seeking to achieve sustainable, inclusive and productive g…
“High-Level Discussions are Under Way to Identify How We Can Restructure Funding For Health Care Services”
Popular Sectors in Egypt
Popular Countries in Construction
Recent Reports in Egypt