Egypt Positioned to Become a Manufacturing Hub as Top Mobile Phone Makers Set Up Factories

Egypt is rapidly positioning itself as a major manufacturing hub, with four of the world’s top five mobile phone manufacturers—Samsung, Vivo, Oppo, and Xiaomi—agreeing to establish factories in the country. This strategic move is a significant step towards transforming Egypt into a regional powerhouse in the technology manufacturing sector.

Prime Minister Mostafa Madbouly highlighted these initiatives during a recent tour of the 10th of Ramadan, Egypt’s largest industrial zone. During his visit, Madbouly emphasized the government’s ongoing efforts to attract the fifth global tech giant, Apple, which would further solidify Egypt’s status in regional manufacturing.

The prime minister’s tour included stops at several factories, notably one that produces high-standard sanitary devices for various international brands. This visit underscores the Egyptian government’s unwavering commitment, championed by President Abdel El-Sisi, to expand and strengthen the industrial sector.

Madbouly pointed out that the government is actively working to attract prominent global companies to Egypt. The goal is to create high local value-added goods and foster a supportive environment for foreign investment. By enhancing communication with international investors and manufacturers, the government aims to offer the necessary support to help them realize their expansion plans within the Egyptian market, particularly those targeting export activities.

This aggressive push to diversify Egypt’s industrial base and enhance its export potential is a key component of the nation’s broader economic strategy. The strategy aims to secure a more prominent position in the global financial landscape and reduce the country’s reliance on imports, thereby alleviating pressures on liquidity and foreign reserves.

Earlier in May, global ratings agency Fitch revised Egypt’s outlook from stable to positive, affirming the country’s rating at “B-.” This improvement reflects reduced external financing risks and stronger foreign direct investment. Since announcing the International Monetary Fund loan program, Egypt has seen a significant influx of foreign investment in its treasury bills, bolstered by support from the UAE. Consequently, Egypt’s net foreign assets deficit shrank by $17.8 billion in March.

Fitch noted that initial steps to contain off-budget spending should help reduce public debt sustainability risks. Meanwhile, Moody’s also revised its outlook on Egypt to “positive” in early March while affirming its ratings, despite the high government debt ratio and weaker debt affordability compared to its peers.

Egypt, which straddles North Africa and West Asia, has been grappling with an ongoing economic crisis linked to persistent foreign currency shortages. In the fourth quarter of 2023, the country’s foreign debt climbed by $3.5 billion to $168.0 billion. These economic challenges underscore the importance of the government’s efforts to attract foreign investment and enhance its manufacturing capabilities.

The establishment of manufacturing facilities by leading mobile phone manufacturers is expected to create numerous job opportunities, boost the local economy, and strengthen Egypt’s position as a key player in the global manufacturing sector. By continuing to attract top-tier international companies, Egypt is set to advance its economic growth and development, paving the way for a sustainable and prosperous future.

About Egypt’s Economic Vision

Egypt’s economic strategy aims to diversify its industrial base, enhance export potential, and secure a more significant role in the global financial landscape. The government is committed to fostering a conducive environment for foreign investment and supporting initiatives that promote innovation and sustainability in the manufacturing sector.