Egypt

Egypt is situated in North Africa with 2,900km of coastline on the Mediterranean Sea, which links to the Red Sea through the Suez Canal. With GDP of US$447bn it is the second largest economy in Africa after Nigeria. It also has the second largest stock exchange after South Africa based on number of listings, which is 190 companies.\r\n\r\nThe former British colony, which gained independence in 1922, had an estimated population of 111 million which the UN expects to grow to 153 million by 2052). Egyptian army chief general Abdel Fattah al-Sisi came to power in 2013 following a military coup and has since embarked on a number of economic reforms to make it easier to start a business, pay taxes, get access to electricity and protect minority investors.\r\n\r\nThe Egyptian pound lost 70% of its value against the US dollar between May 2022 and January 2023. To curb inflationary pressures, the CBE increased interest rates three times between March and August 2023.\r\n\r\nThe fiscal deficit decreased slightly to 6.0% of GDP in 2022/23, buoyed by higher tax revenues that raised the primary surplus to an estimated 1.6% of GDP. Central government debt increased to 95.7% of GDP in 2022/23, due largely to the devaluation of the Egyptian pound. The current account deficit narrowed to 1.2% of GDP in 2022/23 thanks to higher tourism receipts and Suez Canal revenues. Gross official reserves recovered slightly to $34.8 billion at the end of June 2023 (5.6 months of import cover).\r\n\r\nThe structure of the Egyptian economy remained unchanged over the period 2012–2022, dominated by services (51% of GDP) and industries (34%). Manufacturing, estimated at 16.3% of GDP for the same period, has not yet emerged as an engine of structural transformation. Although employment in agriculture decreased by 9 percentage points over the period, employment shares in agriculture (19%) and services (53%) in 2022 remained higher than their output shares, indicating low productivity. The Egyptian economy benefits from a large consumer base, diversified economy, strategic geopolitical location, and several free trade agreements. \r\n\r\nEgypt has always benefited from strong support from international financial institutions. A strategic partnership worth $8 billion was signed with the European Commission in March 2024, while the $3 billion International Monetary Fund program approved in December 2022 was increased to about $8 billion.\r\n20% of Egypt’s import bill is spent on food and the food retail sector is dominated by independent small grocers, kiosks and market stalls which account for 98% of the nearly 119,000 stores, but only 80% of food retail sales volumes.\r\n\r\nThese traditional retailers are increasingly losing share to the growing formal sector, which makes up the remaining 2% of the market, but 20% of sales. Major players, which include France’s Carrefour in partnership with UAE-based Majid Al Futtaim, Turkish retailer BIM, Egypt’s Mansour group and the UAE’s Abraaj group are growing their investments and their footprints.\r\n\r\nThe rural economy is complex and there is no formal supply chain structure. Small-scale farmers with farms of approximately one hectare each make up the majority of farms in the agricultural sector. They are the primary suppliers of vegetables in the country and sell to local and small traders, who sell to consumers.\r\n\r\nThe banking sector is dominated by state-owned banks which have about 50% market share by deposits and lending. CIB, followed by QNB Alahli are the large private banks in Egypt. The government owns three commercial banks – the National Bank of Egypt (NBE), Banque Misr and Banque du Caire (which is owned by Banque Misr). The state also has a 20% share in the Bank of Alexandria, which is majority owned by Italy’s Intesa Sanpaolo, while NBE owns an 8.3% share in Commercial International Bank (CIB).\r\n

Sources: Who Owns Whom sector reports, CIA Factbook, African Development Bank, World Bank, Trading Economics, African Statistical Yearbook and IMF.