The Report: Egypt 2016

Economic growth resumes after presidental elections New constitution includes more checks and balances Investments from regional allies help to foster stability Cooperation with neighbours to share Nile resources

Country Profile

Lying astride trade routes linking West, East, North and South, Egypt has long been at the heart of regional and global commerce. For the past century and a half, the Suez Canal has been a major conduit for international trade, including oil. Building on decades of leadership in the Arab world, Egypt is undergoing major governmental transformation in the aftermath of the 2011 revolution. Presidential and parliamentary elections in recent years have served to stabilise the country politically, reforming the constitution and the responsibilities and scope of Egypt’s leading institutions. While 2015 was characterised by greater political stability and growth, Egypt still faces challenges. Creating jobs and building homes for its growing population and improving living standards for the poorest are among the most pressing, and closely linked to stability in the long term.

This chapter includes interviews with President Abdel Fattah El Sisi; Carlo Calenda, Deputy Minister of Economic Development of Italy; and Ambassador David Thorne, Senior Advisor to the US Secretary of State. It also includes a viewpoint from Manuel Valls, Prime Minister of France.

Explore chapter


After several years marked by turbulence and uncertainty, Egypt’s economy received two welcome boosts in 2015. The first was the successful conclusion to the Egypt Economic Development Conference (EEDC) in the first quarter of the year. The second was the successful passage of the 2015/16 budget, which builds upon delicate but necessary reforms to improve Egypt’s public finances. The combination of the two – along with a range of efforts including new economic zones and power plants to improve industrial production and energy output, and a slate of public works projects including an expansion to the Suez Canal – means that Egypt is proceeding along an increasingly smooth, if still occasionally pot-holed, road to growth. There are challenges still to be tackled, but the country’s outlook is brighter than it has been since the 2011 revolution.

This chapter contains interviews with Hany Kadry Dimian, Minister of Finance; Alaa Omar, CEO, General Authority for Investment and Free Zones (GAFI); Anis Aclimandos, President, American Chamber of Commerce in Egypt (AmCham Egypt); Sindiso Ndema Ngwenya, Secretary General, Common Market for Eastern and Southern Africa (COMESA); and Karim Awad, CEO, EFG Hermes.

Explore chapter


Benefitting from the nation’s increasing economic stability over the past year, Egypt’s banks have enjoyed both ratings upgrades and continued profitability. Thanks to an ambitious government development strategy and new investment legislation, the project finance pipeline is returning to form after a period of muted activity. Elsewhere on the aggregate loan book, competition is heating up to serve a largely untapped retail segment and the nation’s challenging, but potentially rewarding, small and medium-sized enterprise (SME) segment. With only 14% of the adult population owning or sharing an account at a formal financial institution, according to a 2014 survey by the World Bank and Gallup, the banking sector has much potential. A low median income plays a part in modest banking penetration. Yet the Egyptian economy contains significant investable liquidity, as was shown in September 2014 when LE64bn ($8.7bn) was raised in Suez Canal development certificates in a week, mostly through individuals. How banks approach this largely untapped market is a very compelling question

This chapter contains an interview with Dante Campioni, CEO and Managing Director, ALEXBANK. 

Explore chapter

Capital Markets

It has been an interesting year for the Egyptian Exchange (EGX). In 2015 the main board featured the highest number of listed companies since 2010, while products such as the nation’s first exchange-traded fund (ETF) provided a deeper market and new investment options. After years of crisis management in the wake of the 2011 revolution, the exchange authorities have re-established an outward-looking stance, adopting an aggressive promotional strategy aimed at attracting new, solid companies, as well as institutional and foreign investors. This is a long-term ambition, and the fluctuations of the main index over the year are a reminder of the extent to which regional and global economic conditions weigh on the domestic exchange. Still, with increased economic stability and a government development strategy more ambitious than anything seen in Egypt for decades, the EGX is becoming an increasingly attractive proposition for investors both at home and abroad.

This chapter contains an interview with Mohamed Omran, CEO, Egyptian Exchange (EGX); and a viewpoint with Hussein Choucri, Chairman and Managing Director, HC Securities & Investment.

Explore chapter


Despite political and economic difficulties in the country in the past few years, Egypt has a growing and attractive insurance market. Penetration is low, and people are becoming increasingly aware of the need to cover risk. They are especially positive on insurance given the turmoil of 2011 and the fact that insurers made good on their policies despite the damage caused by the upheaval. The sector is well placed at present and emerged from the events of 2011 in better shape than it went in, having earned the respect and confidence of clients and prospective clients. The sector is fighting headwinds, in terms of the lack of spending power in the country and broader economic pressures, but is being helped considerably. The regulators are working to keep the sector well managed and competitive, and investors are showing an interest.

Explore chapter

Energy & Utilities

Egypt is one of the oldest energy producers in the Middle East, with a history of commercial oil production dating back more than a century. The country benefits from low production costs and a relatively large volume of both onshore and offshore oil and gas fields. Developed infrastructure has allowed the country in past decades to maintain a sizeable export market, through shipped products and pipelines, as well as a sizeable downstream sector. However, recent years have seen production subject to more external pressures. Declining output from older fields, a traditional lack of investment in downstream sectors and a jump in domestic demand has led to the country wavering between being a net exporter and a net importer, while power plants and large-scale electricity consumers face load-shedding. The Egyptian energy sector is starting to turn the corner. After a number of years of supply and demand imbalances, the market is coming back into line. Egypt is a challenging environment, given the fixed prices, but it is also importantly, a potentially rewarding environment.

This chapter contains interviews with Tarek El Molla, Minister of Petroleum and Mineral Resources; Hesham Mekawi, Regional President, BP North Africa; Khaled Abu Bakr, Executive Chairman, Taqa Arabia; Hesham El Amroussy, Chairman and Managing Director, ExxonMobil Egypt; and Tamer El Mahdi, Deputy CEO, Orascom Telecom Media and Technology Holding (Orascom TMT).

Explore chapter


In the years since the 2011 revolution, the industrial sector has been put at the forefront of government plans for economic growth. New industrial zones, substantive training programmes and development plans along the Suez Canal corridor have all been committed to paper as part of a strategy to boost the manufacturing sector’s contribution to economic output over the next decade. The proposals and initiatives are of considerable value, particularly given that Egypt’s industries have had to face headwinds over the past few years, both globally and domestically. In the shorter term, industrial growth is likely to be constrained by electricity and dollar shortages, but the government is working to address these issues and conditions should ease over the medium term. This would clear the way for more robust industrial expansion, as the growing population and rising incomes ensure that demand in segments from building materials to FMCGs remains strong. This will, in turn, result in significant opportunities for growth over the next decade.

 This chapter contains interviews with Ahmed Abou Hashima, Chairman and CEO, Egyptian Steel; and Hani Berzi, Chairman, Edita Food Industries.

Explore chapter


As the Arab world’s most populous country, and one of its largest economies, Egypt has always had to work overtime to ensure that infrastructure capacity keeps up with demand. While the past few years of political and economic uncertainty have slowed capital spending on infrastructure, 2015 has seen that trend reversed in dramatic fashion, with President Abdel Fattah El Sisi aggressively prioritising the completion of major infrastructure projects as part of his policy agenda. While exogenous pressures – including muted global shipping volumes and slow growth in major tourism source markets such as Europe – will have an impact on the volume of traffic through Egypt, the high level of domestic demand for both passenger and freight services across all transport modes will sustain growth for years to come.

This chapter contains an interview with Yehia Zaki, Director of Operations, Egypt, Dar Al-Handasah.

Explore chapter

Telecoms & IT

The fundamental demand drivers of Egypt’s telecoms sector are very appealing, by any measure. The country has a large and growing population, increasing purchasing power and high media consumption. However, operators still have had to navigate some tricky challenges. Price competition in the voice market has eased after aggressive discounting in recent years, but data usage and value-added services, which are seen as key revenue earners, still remain modest. Unlike many other sectors of the Egyptian economy, the ICT industry has remained remarkably resilient in the face of the political uncertainty and macro-economic instability wrought by the 2011 revolution. Beyond the basics of national internet infrastructure, Egypt offers a number of benefits for potential ICT investors, not least among which is its proximity to the lucrative European markets.

This chapter contains interviews with Yasser El Kady, Minister of Communications and Information Technology; Hazem Metwally, CEO, Etisalat Misr; Yves Gauthier, CEO, Mobinil; Walid Gad, Chairman, Telecom Egypt; and Ahmed Essam, CEO, Vodafone Egypt.

Explore chapter

Construction & Real Estate

The government’s push to stimulate the economy after a turbulent post-revolutionary period is good news for Egypt’s construction sector. Dozens of planned mega-projects and public works initiatives mean that the contracting industry is facing a sizeable project pipeline across all segments of the market. Large-scale plans for a new capital city and the expansion of the Suez Canal, coupled with rather more prosaic infrastructure upgrade requirements, promise a welcomingly busy few years for Egypt’s construction firms. As the problems facing material producers subside, it is expected that prices will also flatten out. Property is one of the few areas that has benefitted from the uncertainty and instability of post-revolutionary Egypt. As investors have become jittery and the government has introduced capital controls, money has flowed into real estate. It is unsurprising then that the sector has witnessed strong growth in 2014-15. However, the market is bifurcated, showing two distinct dynamics at opposite ends of the spectrum. Rising prices and increased supply in the upper end of the market combined with the apparently growing appetite for flipping properties could pose as an early warning sign of a bubble forming.

This chapter contains interviews with Hassan Allam, CEO, Hassan Allam Construction; Mohamed Mohsen Salah El Din, Chairman, The Arab Contractors; Magued Sherif, Managing Director, SODIC; and Tarek Abdel Rahman, Co-CEO, Palm Hills Developments.

Explore chapter


While Egypt has faced several challenges in recent years, tourism remains one of its leading foreign currency exchange providers and the sector is a key contributor to both GDP and job creation. This breadth in the tourism offering has helped the country develop into one of the most prominent destinations in the region, which is no small feat when one considers the competition. The Egyptian tourism sector has performed well over the long term, and recent declines in terms of numbers employed and share of GDP are not characteristic of the sector’s performance. Tourism still contributes greatly to the economy and it has considerable potential. However, it may take time to win back some potential visitors, as many international tourists will want to see a period of stability before committing to a trip to Egypt. 

Explore chapter


The retail environment in Egypt is set for a transformation over the coming decade. While it has always been a key facet of the country’s economy, with household consumption expenditure accounting for 82.8% of GDP in 2014, it is likely to become all the more formalised over the next 10 years. The sector has remained intact in the face of economic uncertainty because it has largely been geared to mass-market essentials and value products fuelled by the informal sector. However, given the strong demand fundamentals in the market, a number of international brands, retail franchise operators and mall developers are now targeting the market. With a young and technologically literate population, many retailers are expecting to generate an increasing proportion of their sales online in the years to come. 

Explore chapter


Characterised by the predominance of smallholders, Egypt’s agriculture sector is currently witnessing greater investor interest, including capital injections for large-scale projects and a nationwide emphasis on land reclamation for agricultural development. Constraints on Egypt’s agriculture sector over 2015 include evolving subsidy reforms (beginning in July 2014), which has meant a rise in fertiliser prices of between 33% and 50%, along with the impact on distribution due to the higher cost of natural gas, leaving domestic production of fertiliser unprofitable. Inconsistent Customs procedures add to inefficiencies and delays. Insecurity, though improving, has also added to delays. However, high-quality exports are expected to lead the way. The agriculture export sector has come out healthy following the political unrest beginning in January 2011 and is still standing on its feet. It remains well positioned within the wider Egyptian economy as a sector that commands a competitive advantage and significant future potential.

This chapter contains an interview with Alaa Diab, CEO, Agriculture Group - PICO; and Member of the Board, Agriculture Export Council.

Explore chapter


With a looming demographic bulge and a need for higher youth employment, Egypt’s education sector is the focus point of much attention. Egypt’s public education system is the largest in terms of student populations in the Middle East and North Africa (MENA), yet its levels of public spending have only seen nominal increases in the last five years.

With new constitutional obligations, Egypt’s current public spending campaign, if executed correctly, should support the improvement of education levels, in terms of quality as well as access. The country’s broader stability should also help to increase attendance figures. Moreover, with its substantial population, sizeable middle class and interest in education, Egypt makes an increasingly attractive prospect for a broad range of private education providers going forwards.

This chapter contains an interview with Prof. Ismail Abdel Ghafar Ismail Farag, President, Arab Academy for Science, Technology & Maritime Transport.

Explore chapter


As one of the largest health care markets in the MENA region, Egypt is looking to meet rising demand for services driven by its growing population. While efforts are being made to extend care to all citizens, the health care system remains strained by a rising population and structural weaknesses such as fragmentation, low government expenditure and reliance on out-of-pocket spending. Although notable progress has been made in basic public health, further expansion will require greater investment from both the state and private industry. There is rising interest in supporting primary health care, and Egypt is moving towards a health model emphasising prevention and primary care over inpatient treatment.

This chapter contains an interview with Hend El Sherbini, CEO, Integrated Diagnostics Holdings.

Explore chapter

Media & Entertainment

The 2011 revolution in Egypt led to a flurry of new private entrants in the print media and TV markets, with many of them seeking to compete with public broadcasters and long-established traditional print titles for market share. The revolution was also a catalyst for changing viewing and reading habits. With a large youth population, an increasing number of Egyptians are choosing to consume information and entertainment online. As a result, TV networks and newspaper groups are grappling with dwindling subscription and sales figures as customers once taken for granted are migrating online. As such, the industry is at a critical juncture and – in the short term at least – as elsewhere in the world, the ability of outlets to adapt to digital mediums and a more fragmented audience will prove crucial.

Explore chapter


In conjunction with Deloitte, OBG explores the taxation system, examining Egypt’s investor-friendly environment. 

Explore chapter

Legal Framework

OBG introduces the reader to the different aspects of the legal system in Egypt, in partnership with AB & David. OBG talks to David Ofosu-Dorte, CEO, AB & David, on a new legal regime for nuclear energy.

Explore chapter

The Guide

This section includes information on hotels, government and other listings, alongside useful tips for visitors on topics like currency, visas, language, communications, dress, business hours and electricity.



Explore chapter

Table of Contents

There are no articles in this chapter. To view the table of contents, please open click the "View in online reader" link above.