Six months into the US-Iran war, regional shipping remains disrupted and the world is rethinking where things get made. President Xi Jinping arrives in Cairo today on his first state visit in a decade, with industrial investment high on the agenda. Will Egypt capture real value chains and technology or become an assembly platform? Joining me is Dr. Mohamed Hamza El-Husseini, economist and president of the Egyptian Association for Industrial Development. Doctor Mohamed, welcome to the show.
Thank you so much. My pleasure.
You have argued that $50 billion in exports means little if it takes $40 billion in imported inputs to produce them, leaving a real return of maybe 7 to 10 billion. Walk us through that math. How much of Made in Egypt is genuinely made in Egypt today?
We need to distinguish between gross exports and value Egypt actually retains. Egypt's non-oil exports have reached around $48.6 billion — a strong performance. But if you export a product for $100, and $60 of that product is imported components, raw materials, and technology, then the Egyptian value added is closer to $40. We are assembling in Egypt but 60% of the content is coming from abroad. My example of $50 billion of exports requiring $40 billion of imported inputs illustrates the problem — it is not an official calculation but it shows the challenge. Our industrial target should be to move selected industries toward 75% local content. That means more Egyptian components, materials, engineering, technology, and suppliers.
President Xi is in Cairo. What is the one concrete industrial deliverable that would make this visit a success in your own eyes?
I do not measure the success of President Xi's visit by whether we sign ten or twenty or thirty MoUs. I want to see China and Egypt agree to relocate at least one complete industrial ecosystem to Egypt. An anchor investment of $1 billion or more, surrounded by perhaps 20 to 30 Chinese and Egyptian supplier companies working together. That could be in electric mobility, renewable energy equipment, textiles, electric equipment, or another export-oriented manufacturing sector. I want commitments that allow Egypt to transfer technology and build real supply chain relationships between Egyptian and Chinese suppliers. That is what 70 years of relations should now deliver.
Should agreements signed during this visit carry measurable targets like local content percentages and technology transfer milestones?
I would not tell an investor they must achieve 75% Egyptian content from day one — that would be a gamble. But what we could create is a five-year localisation roadmap. Year one, increase local content from 30 to 35%. Year two, reach 40%. By year four or five, reach 60 to 70% — depending on the category of industry. Currently most companies importing into the Egyptian industrial market are importing almost everything and only assembling 25 to 30% of value here in Egypt. Moving from 20 to 30% Egyptian content toward 60 to 70% is a genuine motivation opportunity for investors — it signals Egypt is not stuck in assembly but is open to real industrial development.
The Suez Canal Economic Zone contracted 117 projects worth over $7 billion last year and a major Chinese textile complex just broke ground. How do you connect these foreign factories to Egyptian SMEs instead of letting them operate as export enclaves?
This is one of the most important questions for Egyptian industrial policy. The investment figures are excellent for attracting investors. But now we need to measure the multiplier effect. Imagine one Chinese factory spending $100 million per year buying components, chemicals, maintenance, and logistics — and $80 million of that purchasing is imported. Egypt loses an enormous industrial opportunity for each large factory. What we should do is identify 50 to 100 Egyptian SMEs that could become suppliers to each major factory, help those companies achieve the required quality standards, certification, financing and production capacity, and target having each major foreign manufacturer secure 50 to 60% or more of its eligible imports locally. That is how a large factory that employs 3,000 people also becomes a multiplier for the broader Egyptian industrial economy.
Doctor Mohamed, thank you very much for joining us today.
My pleasure. Thank you so much.
