The Egyptian government will partner with Siemens, Europe’s largest industrial manufacturing company, continuing its aggressive drive to make local industries competitive. As part of the deal, Siemens will set up specialized industrial zones matching the available resources in that location. The project will also connect these industrial establishments with local job markets, use best-practice technologies to improve problem-solving as well as reduce dependence on human intervention.
Noting the project’s urgent necessity, Hisham Kamal, chairman of the Industrial Organization of New Cairo said, “The situation of Egyptian industry has become complicated because of the deterioration of services in industrial zones, which runs counter to investment trends in infrastructure. If the Ministry of Industry wants to develop industrial zones, it should ensure that all parties that deal with investors are computerized and digitized.”
With its more than 121 industrial zones, Egypt probably expected to be further along in its industrialization journey. But potential investors have been held back by hefty bureaucracies in big sectors like water, insurance, and electricity, as well as irregular timelines in completing projects. For instance, Egypt’s only specialized area for the leather industry in Badr, northeast of Cairo, is yet to be finished, with delays in installing basic facilities preventing the transfer of tanneries from elsewhere to Badr. According to Ahmad Shami of the Suez Investors Association, more than just sitting industries, there needs to be a “clear will from the officials.” Badr has 129 industries, with some 350 under construction.
The Siemens agreement is designed to develop infrastructure, automate and digitize industrial zones like Badr, help factories optimize energy efficiency, increase the capacity of local machinery producers, as well as raise the industrial skill and technical proficiency of business owners. This kind of environment will ensure faster completion rates for projects, with the technical know-how already near and locally-sourced. This would also intensify competition between markets, making Egypt’s smart economic zones a choice destination for foreign investments.
Under President Abdelah Fattah El Sisi, Egypt has taken significant steps towards making these goals align. It spent a reported $2.2 billion to expand its road network, adding 3.4km, increasing connections between important industrial and commercial cities in the country. This has seen Egypt’s position on the global road quality list improve by forty-three places, jumping from 118th to 75th. But one list where the country needs to make an Olympian’s jump is the Ease of Doing Business Report, which ranked Egypt 128th of 190 last year. The efficient installation of these smart economic zones could go some way to making that happen.
Beyond the economy, Egypt is attempting innovations in other areas such as electricity, public transportation, and education. This coordinated, multi-sector approach to improving efficiency suggests Sisi’s administration is invested in wholesome transformation.
Meanwhile, about 50 high-profile Egyptian businesspeople and industry captains will travel this week to Germany for discussions with German investors on increasing investments in Egypt, according to a statement by Siemens Egypt CEO, Emad Ghali.
By Caleb Ajinomoh