GAFI positions Egypt as a global hub for logistics and tech, Heiba Says

Zawya

4 days ago

Arab Finance: Egypt's economic landscape is undergoing a significant transformation, with the government actively working to attract foreign direct investment (FDI) and create a more dynamic business environment.
At the heart of this effort is the General Authority for Investment and Free Zones (GAFI), Egypt's primary facilitator for both local and international investors. The country has set ambitious goals, such as doubling the industrial sector's contribution to the gross national product (GNP) over the next five years. The government has identified key strategic sectors, including ICT, renewable energy, and logistics, as pivotal to this growth.
In an exclusive interview with Arab Finance, Hossam Heiba, President of GAFI, shares insights into the authority's new investment promotion strategy. He discusses GAFI's efforts to create a more efficient business environment, its focus on digital transformation, and its plan to promote Egypt's unique competitive advantages to investors worldwide.
1- What are the main pillars of the new investment promotion strategy, and what is its guiding philosophy?
The investment promotion strategy is based on Egypt Vision 2030, which serves as our comprehensive roadmap. When we started developing this strategy, we focused on Egypt's core assets and capabilities and how to best leverage them.
This process allowed us to identify several target sectors, such as the new and renewable energy sector, also known as green energy.
2-What advantages does Egypt possess in the new and renewable energy sector?
Egypt has significant advantages in the new and renewable energy sector, particularly in wind and solar energy, due to our favorable climate. Egypt is a wind-rich region, especially along the northern coast and even more productively on the eastern coast. Regarding solar energy, the area from the south of the valley to the Sudanese border enjoys the highest solar radiation levels in the country, allowing for substantial solar power generation.
Therefore, new and renewable energy is a key target that extends beyond energy production, as we are also looking to manufacture the components for these power plants. Our extensive coastlines and our well-developed ports also aid in hydrogen production, which relies heavily on water.
3-Beyond renewables, what other sectors is GAFI targeting?
We are also heavily targeting the industrial sector because of its high added value. It creates job opportunities and attracts diverse investments, especially in light of global changes since the COVID-19 pandemic. This aligns with the "nearshoring" policy, which moves production closer to markets. Many countries are shifting their operations to other nations to be closer to their target markets.
Due to its strategic location, Egypt is one of the closest markets for both buyers and sellers, which gives our industrial sector a great opportunity to flourish. We have set a target to double the industrial sector's contribution to national GNP within the next five years, which requires us to inject more investment into this sector.
4-What specific industries are you targeting?
Egypt has the industrial foundations and resources needed for rapid and sustainable expansion. This is thanks to local expertise, a large skilled labor force, available land, and existing production capacities.
We have identified existing industries with significant growth potential like home appliances, electronics, textiles, pharmaceuticals, and automotive manufacturing. The automotive industry, in particular, has a long-standing presence in Egypt but has yet to reach its full potential.
We are now giving these specific industries more specialized focus with the goal of positioning Egypt as a regional and potentially international hub. We also have food and engineering industries, but our primary focus is on the aforementioned sectors.
5-The logistics and ports sector is strategic for Egypt. What are the key features of GAFI's plans to capitalize on it?
We are focusing heavily on this sector. In the past, we did not fully leverage Egypt's strategic location. While the Suez Canal has always been an asset, we can now capitalize on the surrounding land to transport goods and make Egypt a trade corridor, both by both sea and land, from the Red Sea to the Mediterranean.
Currently, about 12.5% of total global trade passes through the Suez Canal. Our goal is to increase that figure to 20% of global trade. This growth will be achieved through land transport from the Red Sea to the Mediterranean. This is not competition for the Suez Canal; rather, we are aiming to capture a larger volume of trade overall. This is because the largest volume of trade takes place between the South and the North, which makes Egypt's location exceptional for this sector. Of course, this requires us to expand our logistics facilities, such as ports, railways, and roads, which the state has been doing over the past 10 years.
The development of our road network, ports, and high-speed train lines has already begun to attract investors. They see that Egypt has the necessary infrastructure to establish their projects here. The logistics sector is one of the most promising in Egypt, as it can create a very large number of jobs. It features diverse activities, such as logistics yards, warehouses, and re-export, which all generate significant activity in global trade.
6-What about investment in the agricultural sector?
The agricultural sector is vital. Our goal is to reclaim 2.5 million feddans, with plans to expand this area further in the short and long term. We are not just focusing on harvesting agricultural products; we are targeting the entire supply chain, including agricultural manufacturing.
This also involves implementing different irrigation systems and increasing agricultural productivity. The agricultural sector includes sub-sectors like livestock, poultry, and fisheries, where we are seeing many expansion efforts.
7-Health and education are also vital sectors. What investments have been directed toward them?
These two sectors were in need for significant development. We have injected investments into them over the past period and are currently focusing heavily on improving their diversity and the services they provide.
8-How has Egypt leveraged the advantages of the Information and Communications Technology (ICT) sector, particularly its human resources?
The ICT sector is currently the most promising in Egypt. We are exporting a significant number of services in this sector. Egypt is distinguished by its promising, ambitious, and well-educated young workforce, who are highly skilled in this field. These young Egyptian professionals are being employed by international companies. They are often multidisciplinary and speak several languages, which gives them a competitive edge.
For example, we discovered that Egypt has over 500,000 German speakers, which is a major advantage when working with German companies. Egypt is considered one of the largest German-speaking countries outside of Germany. When French President Emmanuel Macron visited Egypt, the French embassy mentioned that more than five million Egyptians speak French. These are all huge competitive advantages for our human capital.
With approximately 65% of our population under 35, our young demographic is a huge asset. We are currently expanding in the ICT sector, which has diverse activities and attracts many investments.
9- What about investment in data centers in Egypt?
We are currently exploring investments in data centers with investors, as this sector represents the next wave of global investment. Many companies want to deploy data centers across different countries to avoid concentrating data in one location, which reduces risk. The global shift towards digital transformation is driving this trend.
So, why is the world turning to Egypt for data center investment? First, data centers require a reliable energy supply, and with our focus on green energy, we have a clear advantage. Second, Egypt is a gateway for fiber optic cables that come from Europe and supply Africa, Asia, and the Gulf states. Egypt serves as a crucial hub for this advanced technology.
This makes Egypt a top choice for many companies and investors to establish data centers here. These are massive investments, often valued at hundreds of millions of dollars. In addition to data centers, we also aim to attract investments in software, artificial intelligence, and semiconductors. Egypt is well-known for semiconductor design and has a large number of startups in this sector that export their services abroad.
10-How do you plan to attract investors to these sectors?
We have been working to create a sustainable business environment. Our goal is not just to hit specific annual investment figures but to prepare the necessary environment for both foreign and Egyptian investors.
This includes making it easier for them to enter the market and providing the data they need to make informed investment decisions. Our core objective is to address the challenges that investors face.
11- Have any specific measures been taken to improve the investment environment?
Yes, we have already started. Since I was appointed as the head of GAFI two and a half years ago, we have been working intensively on simplifying procedures for investors. We began by identifying the challenges, which were often long-standing issues, most were procedural or related to conflicting laws enacted over the years. These laws were created without considering previous legislation, which caused conflicts.
President Abdel Fattah El-Sisi has directed the formation of a committee from the Ministry of Justice and other ministries to review these conflicting laws to avoid future problems. At GAFI, we have started reviewing procedures to reduce them and have already succeeded in cutting about 66% of the procedures required to establish and authenticate companies. We will handle the rest through digital transformation, which is our most important tool for facilitating business.
12-What measures have been taken to facilitate company formation?
Company formation is now done electronically. We recently launched a licensing platform in partnership with all state authorities, allowing investors to apply for a company license online. We have completed the first phase, and the second, more advanced phase is currently underway. This is a major project that will take about 18 months to fully implement, as we are dealing with over 270 licenses and approvals from around 90 different entities.
To bring all these under one platform without human intervention, we need to re-engineer the procedures for each authority. Our key partner in this massive digital transformation project is the Ministry of Communications and Information Technology.
We are also working on the new World Bank-led "Business Readiness" index, which aims to further streamline business for investors.
13-Beyond creating a better business environment, what steps are being taken to promote investment opportunities?
We have achieved about 40% of our goal in preparing the business environment, with 60% remaining. Simultaneously, we are actively promoting investment opportunities to countries worldwide. Egypt now hosts companies from Peru, Mexico, Argentina, Brazil, and Australia. We share our vision, our plan, and the challenges we face, along with our strategies for overcoming them. Some targets have been accomplished in the short term, while others are set for the medium and long term.
Investors want a clear vision and a record of achieved targets. When we explain our vision, they are more willing to cooperate. An investor's primary concern is whether we have clear monetary and fiscal policies. They want to know if our commercial policy is being restructured and if the state is still competing with the private sector.
Investors will observe and monitor for a period to verify the Egyptian government's vision before making a decision. Over the past year, Egypt's monetary policy has led to lower inflation rates, a stable currency, and the availability of foreign currency for production needs. In the last nine months, the Ministry of Finance has also made tremendous efforts to restructure the tax system and the state's financial policies. This harmony between fiscal and monetary policies is crucial for investors.
Regarding trade policy, the Minister of Investment and Foreign Trade has laid out a plan with export targets and goals to simplify imports. He has also focused on activating commercial agreements with many countries, which gives us a potential export market of more than 3 billion people.
The results of these efforts are already appearing, with exports doubling in the first quarter of 2025 compared to the same period in the previous year. Investors are watching these results, and once they see progress, they will enter the Egyptian market.
14-What recent investment offers have been directed toward Egypt?
This year has seen a noticeable increase in foreign investment. Recently, we have received investment offers from the Gulf, Europe, China, East Asia, including Japan, South Korea, India, Sri Lanka, and Vietnam, as well as from the US, Turkiye, and Central Asian countries like Pakistan and Azerbaijan.
We are not just focused on attracting investments into Egypt; we are also encouraging Egyptian companies to invest in these countries. This mutual investment sustains trade relations. When Egyptian companies invest abroad, they create a source of foreign currency for our country while also meeting their own foreign currency needs.
15- What is the plan for dealing with startups in Egypt?
GAFI has been very focused on startups for over 10 years. We are a partner in one of the first investment funds established to finance these companies. We also have the "Your Idea, Your Company" initiative, which is about a decade old. An entrepreneurship unit has been established under the Prime Minister's Office, with GAFI managing it.
We are part of the ministerial group for entrepreneurship, headed by the Minister of Planning, so we are deeply involved in this sector. We have even created a fast track, a "VIP" service within our centers, to serve startups. This service facilitates procedures like company formation and other processes, and it waives all financial fees.
16- What is the latest on the development of Egypt's free and investment zones?
Free zones serve as investment and export incentives. They are divided into public and private free zones. We are working hard to expand the public free zones. We already had nine zones, and four new ones are currently under development and expected to be completed within the next year. We are also expanding private free zones for projects that need to be located outside a public free zone, for instance, near a port or raw materials.
Investment zones also act as an investment incentive. They are administrative entities with a board of directors that oversees multi-activity projects. We bring all the necessary government entities together as members of the investment zone's board, which is headed by GAFI. Any licenses or procedures an investor needs are submitted to this board, which then obtains the approvals through a one-stop-shop approach.
Two years ago, we had 11 investment zones. Now, that number has doubled to 18. Our investment zones cover an area of more than 180 million square meters. For example, the Ras El Hekma project has been designated as an investment zone, which shows the success of this model.
17-What progress has been made in converting Gulf deposits into investments in Egypt?
We do not dictate specific terms to investors. We present various opportunities and give them the freedom to choose. We have received diverse investment offers from Saudi investors across the agricultural, real estate, and industrial sectors.
Additionally, we have received offers from Kuwaiti investors concerning the logistics, real estate, ICT, and financial services sectors.
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