Egypt’s industry and manufacturing sector, which accounts for around 15% of total GDP, plays a prominent role in the country’s economic development agenda, which emphasises innovation, sustainability and enhanced ties with the African continent. Indeed, scaling up investment in manufacturing is a policy priority as the country accelerates industrialisation and shifts from low-value-added to high-value-added, technology-intensive manufacturing segments.

Structure & Oversight

The Ministry of Trade and Industry (MoTI) oversees the sector, with the mission to promote sustainable and inclusive industrial development; enhance export growth and competitiveness; accelerate sector diversification; promote innovation and knowledge; and generate employment opportunities. According to the minister of trade and industry, Nevin Gamea, key growth priorities in the post-pandemic recovery period include increasing non-traditional exports; improving Egypt’s global competitiveness and attracting more foreign direct investment; deepening local industrialisation; and securing bilateral and multilateral trade agreements.

The Industrial Development Authority (IDA), which operates under the umbrella of the MoTI, is responsible for implementing policies and development plans, allocating industrial land, and granting approval for industrial facilities and licences. The General Authority for Investment and Free Zones (GAFI) functions as the country’s investment promotion agency and acts as a one-stop shop for foreign investment. GAFI regulates and facilitates investment procedures and promotes the adoption of new investment regimes, such as public and private special economic zones (SEZs). The Micro, Small and Medium Enterprises Development Agency (SMEDA), meanwhile, is tasked with nurturing micro-, small and medium-sized enterprises (MSMEs) by enhancing the business environment and easing access to finance. GAFI, IDA and SMEDA are all responsible for attracting investment in the manufacturing sector.

Development Plans

The sector is broadly guided by the National Structural Reform Programme (NSRP) 2021-24, which is the second phase of the National Economic and Social Reform Programme, launched in 2016. The NSRP is aligned with Egypt Vision 2030, the country’s long-term economic development strategy, which aims to advance digital and green technologies and promote Industry 4.0, among other objectives.

The NSRP’s overarching goal is to sustain growth and foster economic diversification via structural and legislative reforms. Its pillars include improving the efficiency of the labour market and bolstering technical and vocational education and training; improving the business environment by giving the private sector more flexibility and easing investment procedures; making public institutions and state-owned enterprises more efficient; promoting financial inclusion; and facilitating access to finance. In particular, the programme aims to increase manufacturing’s contribution to GDP and investment in the sector in a sustainable manner.

“The programme targets food industries, the pharmaceutical industries and medical supplies, the textile and ready-made garments industries, and the engineering industries that include cars and household appliances,” Gamea said in July 2021. The minister noted that legislative, procedural and digital efforts were under way to reduce the costs and time of importing and exporting to bolster the industrial and trade sectors.


The government is working to strengthen industrial capabilities, with a focus on localisation and specialisation in certain segments, particularly textiles and pharmaceuticals. Development plans concentrate on positioning the country as an industrial and manufacturing centre by leveraging its geographic location and affordable labour and operational costs.

The MoTI has pursued programmes to foster trade and integration into regional and global value chains – especially in light of the African Continental Free Trade Area – and to target local value addition, investment and MSME development. Among these are the Industry and Trade Development Strategy 2016-20 and the Inclusive and Sustainable Industrial Strategy 2020-24.

Notable legal reforms include the Investment Law of 2017, which gives foreign investors preferential treatment like Customs and tax exemptions and special incentives, and the MSME Law of 2020, which aims to increase formalisation through tax incentives and marketing and training support. The government is also working to reduce administrative burdens and catalyse private sector investment. For example, the National Single Window, created in 2021, aims to simplify Customs procedures via an online platform.

Additionally, through the Digital Egypt ICT 2030 strategy, the government has focused on capturing the gains of Industry 4.0 by upgrading digital connectivity via investment in 4G, 5G and fibre-optic networks; modernising digital economy regulations; fostering start-ups; supporting and incentivising research and development (R&D) and establishing innovation hubs; and funding education initiatives to increase digital literacy, particularly among youth (see ICT chapter).

“A lot of focus within industry is on improving efficiency through technology and automation, but changing management culture can bring significant benefits and is often the bigger challenge, particularly in the public sector,” Hany Aman, CEO of Eastern Company, an Egyptian tobacco producer, told OBG. “It is also important to balance economic growth and business efficiency with social understanding, particularly in circumstances of a pandemic or economic volatility.”


The government’s efforts to optimise the regulatory environment have been key to stimulating investment in the manufacturing sector. Additional targeted policies will be necessary to build more capacity in Industry 4.0 sectors and achieve higher levels of value addition across industrial segments. According to the latest available statistics from the Ministry of Planning and Economic Development (MPED), in FY 2020/21 total investment in the non-petroleum manufacturing sector amounted to $5.2bn. Of this, public sector investment represented close to 64% of the total, at approximately $3.9bn, and foreign direct investment (FDI) represented 36% of the total, at $2.3bn.

Since FY 2017/18 the share of public investment has climbed steadily, from 53% to 64%, driven by the recent structural reforms in the industry. The total value of FDI in the sector, meanwhile, has also increased, reaching $1.3bn in FY 2017/18 and accounting for 10% of total FDI that year; $1.6bn and 9.9% in FY 2018/19; $1.9bn and 12% in FY 2019/2020; and $2.3bn and 16.6% in FY 2020/21, according to the most recent figures from the Central Bank of Egypt (CBE).

In August 2021 the minister of planning and development, Hala El Said, stated that the non-petroleum manufacturing sector was targeting LE109.1bn ($6.9bn) of investment in FY 2021/22, a significant jump from the previous fiscal year. Part of MPED’s most recent Medium-Term Sustainable Development Plan, running to the end of FY 2021/22, is the establishment of 13 industrial complexes for SMEs, a new offering of approximately 10m sq metres of industrial land for investors, and advocating for the development of companies and factories involved with textiles and garments, aluminium and steel, and fertiliser. The ministry noted that it wanted to increase its focus on investment in high-value-added, environmentally sustainable manufacturing segments, including electric cars and the production of renewable energy components such as solar panels and cells.

In March 2022 the minister of trade and industry announced that the MoTI had prepared a list of 83 investment opportunities for local production and identified 131 products that could be manufactured domestically, reducing the country’s overall import bill. In a further move to increase localisation, Gamea announced that the ministry would provide special assistance to investors looking to manufacture typically imported products and that it had established 17 industrial complexes with more than 5000 industrial units in 15 governorates – at an investment cost of around LE10bn ($635.4m) – to assist with this.

Performance & Size

The comprehensive plans to improve local manufacturing and increase exports, in line with long-term economic reforms, are a reflection of the size and importance of industry, which employs around 15% of the labour force. According to the CBE, manufacturing industries, including oil refining, contributed LE586.7bn ($37.3bn) to GDP in FY 2020/21, accounting for approximately 15% of the total. Of this, manufacturing activities amounted to LE425.7bn ($27.1bn) – around 75% of the sector’s total – and oil refining activities amounted to LE161bn ($10.2bn).

In terms of growth, the industry contracted by 5.8% compared to FY 2019/20, when the sector contributed LE622.9bn ($39.6bn) to GDP, representing 16% of the total. This contraction was due to the ongoing impact of the Covid-19 pandemic, which dampened demand in several segments, and to lockdowns affecting some areas of industrial production. The industry posted several years of growth leading up to the pandemic, however, up 2.8% in FY 2018/19 and 1.4% in FY 2019/20. While in FY 2020/21 oil refining activities and other manufacturing activities posted contractions of 3.8% and 6.5%, respectively, in FY 2019/20 oil refining grew by 17.3% and other manufacturing fell by 3.5%. This was due to large-scale investment and activity in petroleum facilities as part of a strategy to achieve energy self-sufficiency (see Energy & Utilities chapter). According to MPED, manufacturing was up 15.2% in the first quarter of FY 2021/22, with the ministry forecasting higher-than-expected growth for the year.


Fostering industrialisation and boosting manufacturing, exports and economic diversification are among the principal goals for the sector going forwards. While manufacturing value added per capita increased by 27% between 2000 and 2017, as a percentage of GDP it decreased from a high of 18% in 2000 to just over 16% in 2020. Medium- and high-tech industries, in which higher levels of R&D are spent as a percentage of manufacturing value added, have also seen declines in the past two decades, from 36% in 2000 to 21% in 2020. According to the UN Industrial Development Organisation (UNIDO), the top-performing segments in terms of manufacturing production in the fourth quarter of 2021 were skewed towards lower- and middle-value-added products rather than technology-intensive activities. These included beverages, with growth of 192.8%; paper and paper products (25.4%); tobacco products (23.8%); fabricated metal products (22.9%); food products (20.3%); computer, optical and electronic products (18.9%); electrical equipment (16.5%); and apparel (14.2%), among others.

In terms of manufactured exports by technology intensity, in 2019 high-tech manufactured products made up 32.9%, mid-tech 37.7% and low-tech 29.4% of the total, according to French research body CEPII. The top-five industrial exports that year were chemicals, with a 22.2% share; basic metals (14.7%); fuels (13.5%); food and beverages (10.8%); and textiles (8.2%).

Industrial Zones

Under Egypt Vision 2030 and other sector development plans, Egypt has relied on industrial parks, free zones and SEZs to foster localisation, increase formal employment, boost exports and attract FDI. The current policy for these zones is more targeted and prioritises attracting companies operating in the same value chain to develop specialised industrial clusters. Egypt has nine public free zones in which investors can take advantage of specific incentives and privileges. According to GAFI, 205 projects operate under private free zones in the country. Between January and April 2021 GAFI approved 13 free zone projects, with investment amounting to $748m, and in September and October of that year another 10 projects were approved at an investment cost of $148m.

The Suez Canal Economic Zone (SCZ one) is Egypt’s primary SEZ, spanning over 460 km and including four ports. The SCZ one aims to become a major global investment centre by leveraging its location as a gateway to African markets. To attract FDI, it allows for 100% foreign ownership, and foreign firms located in the zone are exempt from Customs duties and sales tax on imports. The four industrial zones in the SCZ one – Sokhna Industrial Zone, East Port Said Industrial Zone, West Qantara Zone and East Ismailia Zone – focus on a variety of manufacturing segments. While maritime-related services are a major focus, the zone authorities are working to attract investment in light-, medium- and heavy-manufacturing industries, and higher-value-added activities such as renewable energy components, ICT, pharmaceuticals and agri-business.


Although manufacturing value-added growth has been sluggish compared to other emerging economies, Egypt has made considerable progress on improving industrial development though diverse reforms to attract FDI and boost productivity. Looking ahead, additional targeted polices would serve to increase focus on technology-intensive, higher-value-added manufacturing, helping to build capacity in Industry 4.0 sectors and achieve greater value addition in segments with high export competitiveness, including textiles, apparel, fuels, minerals and basic metals.