Moamen Salim writes | Made in Egypt

"We are, therefore, gentlemen, working for industry. We take it by the hand while it's still young in Egypt, nurturing it until it grows and matches the major industries abroad."

With these simple words, Talaat Pasha Harb, whose death anniversary was last month, expressed his vision of the role of finance in industry. No one can deny the importance of industry in the economy. It's enough to note that whenever we face an economic crisis, voices rise, calling for the search for and stimulation of industry. Industry, which intersects with all economic sectors: there’s no agriculture without the industry of irrigation equipment and pesticide production, no healthcare without the manufacture of medical devices and pharmaceuticals, and no education without the industry of educational technology and school supplies, and so on.

Over the past seven years, the government has worked on boosting the industrial sector through vertical and horizontal policies, ranging from establishing industrial complexes and cities to legislative amendments. The most notable among these were the amendment of the Industrial Licensing Law and the Law on Preference for Local Products in Government Contracts, along with several revisions to customs duties. This effort culminated in a historic export value of $32.4 billion last year. We aspire to reach $100 billion before 2030, and we have the potential to exceed that number—especially with the devaluation of the Egyptian pound, which boosts exports. However, several obstacles delay us from achieving this ambition, and they can be summed up in one word: bureaucracy.

“Bureaucracy”—those silly, complicated, and humiliating procedures that have persisted for more than half a century—faced by anyone dealing with the government. Generations have passed, praying and working to rid the country of this bureaucracy. While the government has made efforts to reduce it, and there are noticeable improvements in accessing some services, especially with the digitization measures nearing half of all public services, we still have the ambition to completely eliminate bureaucracy, particularly in the fields of investment and industry.

In its quest to develop the industrial sector, the government has worked to eliminate industrial randomness by reorganizing and consolidating workshops for various industries. This led to the creation of cities like Damietta for furniture, Robbiki for leather, and the ongoing development of Mahalla for textiles. However, despite the correctness of this direction and the consensus around it, there were flaws in execution. These decisions were not widely discussed with the relevant stakeholders. Moreover, the high costs of relocation were not met with adequate support or soft financing from banks. These industrial cities also need new projects that create jobs and increase production, reflecting positively on development indicators. This has led to amendments in the Law for the Development of Small and Medium Enterprises, and in 2020, a new version of the law was issued. Additionally, the issue has received presidential directives to support and encourage young people to venture into small and medium-sized enterprises. The world has come to agree that this sector will drive the economy in the coming years, especially with the growing population and the insatiable demand for consumption, as large corporations cannot meet all individual needs for jobs and consumer goods. Yet, to this day, no young person can start a company or factory and return the same day with any significant achievement—bureaucracy strikes again.

Finance is the backbone and primary resource of industry. Most factories face financing problems, and newly established ones struggle to secure bank loans. So how can industry and exports grow without the creation of new factories? And how can new factories operate without funding? How will they get funding if bank credit rules require years of experience in the business? The new Central Bank Governor, whom Egyptians are counting on to guide them through this economic crisis, could reorganize the rules for granting industrial sector loans, prioritizing industries that target imported products to reduce the import bill. Alongside this, the export support program should be restructured, with clear timelines for refunding export burdens.

We are in dire need of a strategy to incentivize industry, where the state facilitates procedures, eliminates bureaucracy, provides funding, and supports the industrial sector for three years by waiving some fees, granting tax exemptions, offering land leases in exchange for paying only utility costs, and reviewing energy prices for factories. Lastly, I call on the government to open a genuine and honest dialogue about the future of industry in Egypt—an initiative called "Made in Egypt" as a global brand. If we agree, success is inevitable.

Momen Selim, member of the Coordination of Youth Parties and Politicians.