Egypt Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

(only for non-EU countries) General comment on trading with EU countries, comment on the numbers in the table, reasons for a positive or negative balance.

The results of mutual trade between the EU and Egypt prove the positive effect of the implementation of the Association Agreement, which has been in force since 2004. Thanks to Egypt’s status as an associated country, the EU is the country’s main trading partner. In recent years, the Egyptian government has been trying to emphasize its own domestic production and is setting up administrative obstacles for the import of some goods from the EU. Egypt’s goal is to reduce the negative trade balance.

  • Allcountrylist: Overview of major industries in Egypt, including mining, construction, transportation, tourism, and foreign trade.
2017 2018 2019 2020 2021
Exports from the EU (million EUR) 18,417.40 18,012.70 19,019.80 18,152.40 21,541.70
Imports into the EU (million EUR) 7,397.40 7,648.90 8,302.30 6,365.80 9,052.40
Balance with the EU (million EUR) -11,020.0 -10,363.8 -10,717.4 -11,786.7 -12,489.3

Source: European Commission

Trade relations with the Czech Republic

Comment on the numbers in the table, the reasons for the positive or negative balance, comparison with the EU and what causes the differences.

Trade exchange between the Czech Republic and the EAR shows a consistently high active balance in favor of the Czech side. The Czech Republic traditionally exports to Egypt, and this type of goods ranks first in the export tables: motor vehicles, tractors, bicycles, etc., reactors, boilers, electrical appliances. recording, reproduction, sound etc., glass products and iron and steel products. Imports from Egypt are dominated by woolen products, yarns and fabrics, clothes and fruits and vegetables, nuts.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 2 8.5 9.1 10.1 ON
Imports to the Czech Republic (billion CZK) 6 2.1 2.5 2.2 ON
Balance with the Czech Republic (billion CZK) 4.1 -6.4 -6.6 -8 ON

Source: CZSO

Trade relations with countries outside the EU

Comment on the numbers in the table, the reasons for the positive or negative balance, comparison with the EU and what causes the differences.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 1,421.1 5,826.2 5 181.5 3 139.3 9,151.0
Imports to countries outside the EU (million EUR) 43,479.2 48,302.8 47,762.9 46,345.5 57,684.8
Balance with non-EU countries (million EUR) -42,058.1 -42,476.5 -42,581.4 -43,206.3 -48,533.8

Source: EIU, Eurostat

Foreign direct investment

Foreign direct investment in Egypt reached USD 9 billion in 2019. This is the highest volume since 2010 and an 11% increase compared to 2018. It constitutes a stable share of approximately 0.3% – 0.6% of global foreign investments. The most significant investors are companies from the EU, accounting for up to 53% of foreign investments, followed by the Gulf States, accounting for 22%. The FDI portfolio is poorly diversified in the long term: 62% consists of investments in the oil industry, 20% in agriculture, 9% in engineering and approx. 5% in construction. Foreign producers based in Egypt purchase significantly more from local producers than in other countries in the Middle East region. In the case of Egypt, the low uptake of imported goods by foreign producers may reflect lengthy import procedures. Restrictions on the import of material into Egypt have been tightening in recent years,

Since 2017, a new investment law has been in force, which has created better and more favorable conditions for investors in Egypt. The new law guarantees international investors a number of protections, for example: ¨

– Foreign investors are supposed to have the same treatment as Egyptian nationals by law.

– Foreign investors can now receive preferential treatment with the approval of the Council of Ministers.

– No administrative authority can revoke or suspend investment project licenses without due warning, due process and time to correct any problems.

– Foreign investors have a guaranteed stay in Egypt for the duration of the project.

– Investors have the right to transfer their profits abroad.

– Investment projects can include up to 10% of foreign employees and up to 20% of investment companies.

– Foreign employees of investment companies have the right to transfer their compensation abroad.

FTAs and treaties

Treaties with the EU

Any FTAs ​​and bilateral or other agreements, list the important contractual basis and comment on the most important ones and describe what this means for mutual trade.

Contracts with the Czech Republic

Contract base + commentary in general and commentary on the most important contracts and what follows from them.

Treaties with the EU

  • In the case of Egypt, an Association Agreement has been signed between the EU and this country since June 25, 2001, which regulates, among other things, the rules of mutual trade between Egypt and EU member countries.
  • The association agreement entered into force on 1 June 2004 and applies to all member countries of the European Union, including the Czech Republic.

Contracts with the Czech Republic

  • Agreement between the Czech Republic and the Arab Republic of Egypt on the prevention of double taxation and the prevention of tax evasion in the field of income and property taxes dated 19 January 1995. The agreement entered into force on 4 October 1995.
  • Agreement on cooperation in the field of agriculture and food industry. The contract was signed on March 23, 1997.
  • Agreement between the Czech Republic and the Arab Republic of Egypt on the support and mutual protection of investments of 29 May 1993.
  • Agreement on cooperation in the veterinary field between the governments of the Czech Republic and the Arab Republic of Egypt dated 13 April 2000.
  • Agreement on scientific and technical cooperation of 20 February 1966.
  • Agreement on cooperation between the Czech-Arab Chamber of Commerce and the Federation of Egyptian Chambers of Commerce. Signed on 3/5/2000.
  • Memorandum on cooperation between the Ministry of Industry and Trade of the Czech Republic and the Ministry of Energy and Electricity EAR of 27 November 1993.
  • Memorandum on cooperation between the Ministry of Industry and Trade of the Czech Republic and the Ministry of Industry and Trade of the EAR, including the establishment of the Mixed Trade Commission from May 2013 (the first meeting took place in Cairo in April 2016).
  • Memorandum of Cooperation between the Union of Industry and Transport and the Egyptian Federation of Industries, signed on 31/01/2016 in Cairo.

Developmental cooperation

Is the country a provider or recipient of development aid + brief comment. Information on the Development Cooperation Guarantee. (where relevant)

If the country is a provider, describe how Czech companies can get involved.

Development cooperation with the Czech Republic

In the years 2011 – 2014, projects of transformational cooperation were implemented in the field of vocational and apprenticeship education and ecology, renewal of the teaching of jewelry making, artistic blacksmithing and metalsmithing. The total amount of Czech aid thus reached CZK 1 million.

Until 2019, ZÚ Cairo cooperated with the Association to help cancer patients in the Egyptian oasis of Dakhla, 900 km south of Cairo. Through it, within the framework of small local projects, he provided funds from the official development aid of the Czech Republic to the sick. In particular, health facilities have significantly facilitated access to examinations and full-value care, for which they previously had to travel hundreds of kilometers. The annual contribution to a small local project in Dakhla is around 300,000 CZK.

Egypt is a suitable country for the Development Partnership Program with the private sector and the ČMZRB Development Cooperation Guarantee, as the financial sector in Egypt is sufficiently developed and the local private sector already has experience with foreign partners.

Development cooperation with the EU

The EU considers Egypt to be a developing country and provides it with consistent assistance under several development programs through various financial institutions and instruments. A number of EU member states are implementing their own development projects in Egypt. These relate to a number of topics in the areas of transformation and economic cooperation. Currently, the most interesting opportunities for Czech business entities to promote in Egypt are water management development projects, both the management of the use of water resources, the supply of the population with drinking water and wastewater treatment, and development projects in the field of the environment (waste management, introduction of low-emission and waste-free technologies in production, etc.).

Current information on EU development projects in Egypt is available on the website of the EU Delegation in Cairo.

Prospective fields of study (MOP)

Transport industry and infrastructure

The construction of new cities offers opportunities mainly for ITC solutions for traffic control systems. With a network of 28 civilian airports and an ever-increasing number of passengers transported annually, the government perceives the need for their expansion and modernization. Egypt is interested in navigation systems, air traffic control systems and radars. The trend of expanding the transport infrastructure with new railway lines, trams and the ever-expanding Cairo metro continues. The government is also preparing dozens of projects for the development of so-called Smart Cities.

As part of Egypt’s National Strategy 2052, the government aims to build new sustainable urban communities, modernize existing ones and contribute to a higher quality of life for a population of more than 100 million and still growing rapidly. At the same time, it aims to install new environmentally friendly solutions, among other things, within the transport infrastructure. Over the next few years, the Egyptian government plans to introduce 38 new smart cities across the country as part of a long-term strategy to develop the national infrastructure. The largest smart city projects include New Administrative Capital, New Alamein, El Gallala, New Mansoura and New Sphinx. Basic construction work on the above-mentioned and 10 other new smart cities is currently being completed. This will be followed by the construction of another 17 new cities such as New Suez, New Rosetta or New Beni Mazar. The construction of these cities was supposed to start already in 2021, currently the beginning of construction work is expected in 2022-2023. There are opportunities here mainly for smart systems of transport, parking or road traffic management.

Plans for the high-speed electric railway began to be implemented in 2021. The high-speed railway will connect the Red Sea with the Mediterranean Sea, and the government has signed a US$billion deal with several companies to install and maintain the first 660 km line, which is expected to take two years to complete years. Meanwhile, work continues on the two planned monorails that will connect the 6th of October City to Giza and Nasr City to the new administrative capital. These projects offer extensive opportunities for Czech companies for consulting work, electrical systems on railway lines, construction of railway depots, ICT systems for managing railway traffic, etc.

Defense industry

The government aims to increase its own production of military equipment and gain a share of the African market. This presents opportunities for the supply of CNC machines, rolling mills and other technology to increase domestic production of simpler products. The current security situation in Libya and its long unprotected border with Egypt represent a great challenge, but also an opportunity for Czech companies and their intelligent systems and radar technologies for border protection.

In the field of defense, the Czech Republic can build on a long tradition of mutual cooperation in Egypt. This is not only a defense-industrial context, Czech researchers and scientists in the country helped establish, for example, a military university, whose technical courses are still among the best available tertiary education in the region. Egypt is currently in demand for research capacities for the implementation of defense-industrial research and development. Among Czech products, the country has long been showing interest in hand and light firearms, ammunition, land equipment including landing gear and selected products of the aviation industry. We still find great opportunities for the servicing of old Soviet equipment – these are primarily armored vehicles or tracked vehicles. Even in times of crisis, the defense industry is one of the few industries that enjoy a steady flow of funding in Egypt. Several Czech companies have already managed to penetrate the Egyptian market, on which manufacturers from all over the world apply. These are mainly small hand weapons (pistols and assault rifles), ammunition of all kinds, products of a dual nature for mining needs (mining explosives, special chemicals, etc.). Strategic locations such as the Red Sea and the Suez Canal, as well as vast desert areas near the borders with Israel and the Gaza Strip, require increased protection and represent opportunities for Czech passive defense technologies. Egypt shows great interest in the supply of products for chemical and biological protection. Even the COVID-19 pandemic has shown that Egypt is not prepared for cases of this magnitude. For this reason, interest in protective suits, masks, decontamination equipment, as well as mobile hospitals and auto-injectors has increased. State military factories produce not only military material, but are also significantly involved in civilian production. The government aims to increase its own production of military equipment and gain a share of the African market. The plan includes the development of production lines for all kinds of ammunition and explosives in a total of 8 state factories. It is planned to increase the capacity of ammunition for small arms to about 73 million pieces compared to the current 50 million. This presents opportunities for the supply of CNC machines, rolling mills and other technology to increase domestic production of simpler products.

Mining, mining and oil industry

Oil and gas extraction is one of the most important sectors in Egypt and their further development is expected in the next 10-20 years. Egypt has not yet mapped all mineral resource locations and expects to distribute additional concessions in the coming years (for example, large-scale lignite mining is expected to begin). Furthermore, for example, the phosphate industry of Egypt is interesting for Czech companies in terms of the supply of anti-corrosion materials for the transport and storage of phosphoric acid, for the supply of equipment for crushing, sorting and refining of phosphate ores. Among the most sought after commodities are critical minerals, Egypt has deposits such as niobium and tantalum and rare earths. These deposits have not yet been fully explored.

Egypt has significant reserves of mineral resources: metals, precious metals and non-metals, including 48 million tons of tantalite, 50 million tons of coal and million ounces of gold, concentrated mainly in the Eastern Desert and the Sinai Peninsula. The drive to expand the industry is accompanied by new regulation introduced by the government in 2020, which serves to create new rent, royalty and tax systems, facilitate licensing procedures, develop financial and investment models for contracting with investors, and offer more investor-friendly conditions. for mining activity and practice. Czech companies could also establish themselves in subcontracting for upcoming transmission system development projects, the most important of which is probably the strategic interconnection of the energy systems of Egypt and Sudan. Thanks to the Czech tradition in the energy use of coal, the project of investing in coal mines and power plants is an interesting opportunity. Due to the development of oil and gas production in new fields, new capacities for processing (refineries) and transportation of these raw materials are being built or prepared, a number of existing refineries are technically obsolete and work is being done on their reconstruction with a total budget of 9 billion USD.

Opportunities are thus offered both for suppliers of complex technological units, who must of course solve their financing, and for their subcontractors. Another interesting project being prepared, from the point of view of potential subcontractors, is the ongoing construction of gas pipelines and distribution systems for the gasification of Egyptian housing estates with the planned connection of million customers.

Water management and waste industry

The Egyptian government is trying to minimize the effects of the crisis due to the construction of the GERD dam and is modernizing the management of water resources – the aim is to make the irrigation of the Nile basin more efficient and to ensure the responsible management of water resources by Egyptian farmers. Egypt already relies on wastewater recycling as well. Extensive projects are being prepared for desalination plants, irrigation of large agricultural areas and installation of water pumps and treatment plants. Czech companies have the opportunity to use their know-how as part of consulting work or the actual delivery of entire equipment.

Egypt is a nation suffering from water shortages due to a rapidly growing population and outdated water management. The country needs to secure 114 billion cubic meters of water per year, while it has only 74 billion cubic meters available. Egypt is concerned about the potential negative impact of Ethiopia’s GERD dam construction on the river’s flow. To meet these challenges, Egypt has established a plan to develop the irrigation system, replace and rehabilitate drainage and irrigation stations, and build desalination plants. Egypt, for example, has earmarked US$5 billion for 43 clean water development projects. At the same time, it allocated USD billion for the construction of new desalination plants. In total, 17 facilities will be built by 2026, all of which will be powered by solar energy to reduce environmental impact and operating costs. The goal is a daily production of 2, 8 million cubic meters of water. By 2050, 67 more plants are planned to be built in the governorates of Matrouh, Red Sea, North and South Sinai, Ismailiyah and Suez. Egypt also introduced the Clean Oceans initiative, under which it will support projects to reduce ocean pollution and protect corals, with a special focus on the disposal of plastics.

Czech companies can offer modern solutions for dealing with plastics and other harmful materials, disposal of harmful waste, or consulting services in these segments. The government is also emphasizing the modernization and development of Upper Egypt, which is characterized by outdated methods of irrigating fertile land.

Healthcare and pharmaceutical industry

As a result of the COVID-19 pandemic, the government is investing in the expansion and modernization of healthcare facilities (expansion of capacity, modernization of current technology, training and service), and the trend is expected to continue in the coming years. Czech companies can supply medical equipment to new hospitals or offer special equipment for biological and chemical protection.

The main strategic goal of Egypt is the implementation of the Haya Karima project. These are large-scale investments in the development of the Egyptian countryside, which represents up to 85% of the Egyptian population. In addition to the development of transport infrastructure or water management, this also involves extensive construction and modernization of medical facilities. The goal is to develop a total of 1,250 medical facilities, build more than 300 new outpatient facilities and 300 buildings for public services. The estimated investment in the Haya Karim project is more than 44 billion USD. The project is implemented as part of Egypt’s Vision 2030 in cooperation with the United Nations. Similar to the international Agenda 2030, the Egyptian version aims to modernize the country in line with the UN Sustainable Development Goals.

Cairo University has announced the groundbreaking for the largest pediatric medical complex in the Middle East. It is the largest medical complex for children with a total project cost of about USD 220 million for initial construction alone, including electrical networks and transportation infrastructure. The complex project will include 10 operating theaters equipped with state-of-the-art medical technology, 5 nursing units with a total of 140 beds, 7 intensive care units serving approximately 67 patients, 44 outpatient clinics for all pediatric specialties, an integrated radiology department, a laboratory section and an emergency department, a dialysis department, a central pharmacy, clinical pharmacy, two large lecture halls and 8 classrooms. One of its main features will be green and smart architecture on a total area of ​​70,000 square meters.

Chemical and biological protection is also an important sector. Primarily as a result of the COVID-19 pandemic, the Egyptian government has committed to equip strategically important hospital facilities with the necessary equipment for severe pandemics. These are protective suits, masks, mobile medical equipment, security and modernization of infectious disease departments or an increase in the number of medical equipment for field needs.

Egypt Trade