events

Arab-British Export Club: Opportunities in Egypt

Dates:

23 Oct 2008 - 23 Oct 2008

The Arab-British Chamber of Commerce hosted its latest Export Club, held on 23rd October, to shed light on business opportunities in Egypt. The event provided an excellent insight into the up-to-date economic development in Egypt’s dynamic and diverse market.

The business and investment opportunities in Egypt’s growing market were addressed by a group of outstanding speakers, and in presence of over 90 guests in the audience, including A-BCC member companies and other UK business representatives.

The distinguished panel of speakers included Counsellor Mr Ali Ellaithy, Head of the Commercial Office of the Embassy of Egypt in London, Dominic James from British Expertise, John Davies from UKTI, David Berneye from Barclays Bank, Peter Grimsditch from Oxford Business Group, and Edward Rose from Trowers & Hamlins LLP. The panel was chaired by Sir Roger Tomkys, the A-BCC Chairman.

To view images of the event please go to the ABCC Photo Gallery.

Ali Ellaithy, Egyptian Commercial Affairs Counsellor, thanked the A-BCC for its support to promote and encourage bilateral trade and investment between Egypt and the UK. Speakers all stressed the importance of Egypt as a prominent part of the Arab world and a very important country for the West. Egypt is the highest populated Arab country with around 75-80 million people, and is witnessing continued rapid growth in population. The country also enjoys a dry and moderate climate.

Egypt today is one of the world’s most attractive business locations due primarily to its richness in highly educated and cost-effective labour force. The country is regarded as having a strong position based on its young population, sustainable and abundant talent pool of technologically skilled and multi-lingual university graduates. English is widely spoken by the majority along with French by the educated classes. Egypt’s geographical position close to Europe and Asia coupled with strong government reforms are also key factors which contribute to Egypt being attractive for outsourcing. In addition, Egypt is also an excellent place to start business due to its relatively stable currency, and its markedly reduced customs and tariffs.

Since the mid-1990s, Egypt has embarked on serious economic reform aiming to attract foreign investment. However, in late 2003 and early 2004, the government proposed new privatisation and customs reform measures.

The impact of the economic reform is shown positively on Egypt’s macro economic indicators. At the present time and in spite of the global economic and the financial crisis, the economic opportunities in Egypt continue. Egypt’s banking sector is safe from crisis because it is under the Central Bank's monitoring. The sector generally remains sound with continued improvements in prudential indicators and strengthened banking supervision, although liquidity pressures have emerged in a few countries.
Ali Ellaithy, outlining the position of Egypt in the Middle East and North Africa region and its importance to the West, stressed that Egypt is among the first nations in the region to sign an agreement to ease and facilitate foreign investment in the industrial and agricultural sectors. Its economy is among the most diverse in the region, as growth is witnessed in a number of its economic sectors. Its GDP growth is 2% above the global level.

Egypt’s exports to Europe are increasing in number of goods. Its export to the UK reached over £517 million in 2007, while UK exports to Egypt reached over £692mn in 2007. The UK was the largest non-Arab investor in the country in 2007, with Arab investors, especially from the GCC, increasing massively in recent years.

Dominic James introduced British Expertise to the audience as “a trade association representing 20-30 British companies mainly dealing in the Middle East and North Africa. It also speaks on behalf of UKTI”. James said that “the latest report on the region from the World Bank puts Egypt at the top ten in doing business and implementing economic reform”. Egypt is one of the main UK business partners, ranking as the UK’s 40th largest market, and the UK is the largest foreign investor in Egypt, with approximate worth of £10bn (including gas and oil sector). Egypt’s tourism sector is the most growing sector, and considered as the major tourist destination for British.

John Davies from UKTI stressed that “Egypt has good economic infrastructure such as roads, bridges and electricity”. Most notably “it is rich in labour force and enjoys a good education system”. The UKTI encourages potential UK investors to visit Egypt more than once in order to get a clear idea about starting a business there. For potential UK investors in the Egyptian market, it is also important to look at the experiences of other investors and attend workshops in Egypt and the UK. Major opportunities for the UK companies in Egypt are concentrated in infrastructure, the industrial and communications sectors, especially due to low cost and educated labour force. Davies said, investment opportunities also exist in the fastest emerging sub-sectors, such as transport, E-learning skills, energy, and environmental sustainability. Egypt ICT sector is emerging as a role model of deregulation and privatisation as well as a catalyst for reform in other sectors. Egypt's IT infrastructure has evolved dramatically in the last few years.

British investors and exporters need to be familiar with the financial and banking system. This very important issue was addressed by Barclays Bank expert, David Berneye, pointing that “Egypt is very attractive business environment, especially due to its educated labour force, and confident and experienced business community”. However, potential UK investors or exporters in Egypt must carry out the required market research using external resources, gain awareness about local business practice e.g. language and culture, set-up clear sales/export strategy (budget, time, packaging, etc), and identify potential buyers. It is also equally important to consider all risks, i.e. status of the buyer, position of the goods with regards to delivery, clearance, documentation, shipping, etc.). The following step is to study i.e. how to open an account/documentary collection, letter of credit/ documentary letter of credit, issue of a contract guarantee by a bank in Egypt.

In this regard, Barclays Bank Egypt as active member of the international Barclays conglomerate, offering high value and unique products and services across the Egyptian market. It has a long history of world class financial servicing in Egypt.

Finally, Peter Grimsditch, from OBG, and Edward Rose, from Trowers and Hamlins, spoke confidently of their experiences in the Egyptian market. They were convinced that economic reform which aims to encourage foreign investment in Egypt has successfully resulted in attracting massive investment, especially in communications and physical infrastructure. The openness of Egypt to foreign investment has also resulted in raising living standards and creating more employment opportunities for Egyptian citizens. Economic reforms have led to the adoption of an important body of investor friendly commercial legislation. Trowers & Hamlins in association with its local association, Nour Law Office, with its international standards and it local knowledge offers UK investors the necessary guidance they require.

The question and answer session reflected, through the lively and interactive discussion, a profound level of British business society’s interest in Egypt, and its diverse and dynamic market. The A-BCC Export Club is welcoming British companies and individuals seeking to benefit from the numerous opportunities offered by the Egyptian market. Certainly, the A-BCC, with its highly professional data-base, is also ready to assist UK companies looking for establishing new business in Egypt.