The need for increasing dependence on national industries and production becomes greater at times of crises, wars and pandemics.
Global production and supply chains have been drastically disturbed by Covid-19 and ongoing geopolitical changes.
This is why Egypt is turning to localisation in almost all sectors, including textiles, medicines, electrical appliances and furniture.
Industry localisation does not necessarily mean confining all production stages within national borders.
Achieving the best economic efficiency is, however, at the core of this process, since it is illogical to fulfill full localisation at a moderate production cost.
Meanwhile, national industry localisation efforts are being applauded by industry specialists.
Investors and the members of the Federation of Industries have recently praised President
Abdel Fattah El Sisi’s initiative to localise industries.
This initiative, they said, would open the door for more reliance on local products and less dependence on imports.
The president launched the initiative against the background of global inflation and the rise in the prices of raw materials in the international market.
It aims to offer support to different industries by strengthening the role of the private sector, especially in large and medium-sized industries.
The Ministry of Industry has already unveiled 83 investment opportunities for the substitution of imported goods with locally-made ones.
The ministry also took steps to support small industries, having allocated 6 billion Egyptian pounds (roughly $326,000) in annual support to the initiative through the Enterprise Development Authority.
The Ministry of Industry has established 17 industrial parks in 15 governorates that combined contain 5,046 factories, with 10 billion pounds (about $543,000) in investments.
Nonetheless, those closely following national efforts to increase dependence on locally-made goods still call for speeding up the provision of plots of land for industrial investors, removing industrial licensing hurdles, facilitating the import of production requirements and raw materials, and canceling out the documentary credit system.
The same people call for reinstating tax exemptions to encourage local manufacturing and attract foreign investments.
“It is important to ease the issuance and renewal of licenses,” a local newspaper quoted Ahmed Abdel Hamid, head of the Building Materials Chamber at the Industries Federation, as saying.
“We are also badly in need of easing access to financing for industrial projects,” he added.
Sherine Helmy, the head of a major pharmaceuticals company, said almost 93 per cent of pharmaceuticals sold in the local market in 2020 were locally manufactured.
“However, over 90 per cent of the raw materials of these pharmaceuticals came from abroad,” she added.
She said Egypt has started increasing the pace of medicine industry localisation since producing the Hepatitis C drug.
“Yet, there is an urgent need for localising the manufacture of drug raw materials,” Helmy said.
Egypt boasts 150 pharmaceutical factories. Nevertheless, only two of these factories produce their own raw materials.
