Planning Minister reviews the Industry and Communication Sector Targets for FY 23/2024 before the Senate

The Minister of Planning and Economic Development discussed, today, the financial, economic, and investment affairs committee report for the approval of the economic and social development plan for the fiscal year 2023/24 in front of the general assembly of the Senate, in the presence of the president of the Senate, councilor Abdel Wahab Abdel Razik, and members of the council.

During her speech, Dr. Hala El-Said clarified that the 2023/24 plan directs Egyptian Pounds 100.7 billion in investments to the industry sector, both petroleum and non-petroleum. This is a 20% increase from previous years’ forecasted investments in this sector, EGP 84.2 billion. It is expected that these investments will generate EGP 393 billion in the same year. This is with a growth rate of 21% compared to the industry return for the previous year, EGP 325 billion.

El-Said added that the industry development plan FY 2023/24 incorporates 4 principal projects with a wide range of sub-programs emanating from them, each with specific goals and mechanisms. The principal projects include industrial investment incentivization and deepening local industry projects, the competitiveness improvement of the industrial sector project which focuses on the development of a comprehensive system of standards, quality, and control, the program for the development of industrial exports, and finally, the program for the development of economic clusters by focusing on many promising industries with a competitive advantage.

El-Said pointed out the 2023/24 plan’s projects within the framework of the program to stimulate industrial investment and deepen local industrialization, including the establishment of two industrial complexes to serve high-tech industries within the framework of the plan to establish 7 industrial clusters, the completion of the facility for the city of Al-Rubiki for leather tanning, and the completion of the facilities of the industrial zones in Sohag governorate (west of Tahta and west of Girga), ending the escort works for the industrial zones in Qena Governorate, raising the operating efficiency of the industrial zones in Sohag and Qena, in addition to legalizing the conditions of two thousand factories from the informal sector, and transferring 300 of them to industrial regions and complexes, as well as continuing to modernize the infrastructure in a number of industrial complexes to take advantage of the savings of aggregation, specialization and integration, including the plastic industries complex in Merghem in Al-Amriya, Damietta Furniture City, and the textile industries zone in both Al-Mahalla Al-Kubra and Kafr Al-Dawwar, as well as completing the development work in the Safaga Port to serve the transportation movement.

Furthermore, El-Said addressed the strategic direction towards deepening the local manufacturing of many components and intermediate commodities included in the import lists, in light of the availability of ingredients for their local production, intending to reduce the volume of imports from them, and develop the productive capacities of national companies, taking into account strict adherence to international standards and quality considerations to enhance international competitiveness, indicating the trend towards the development of environmentally friendly industries, such as the manufacture of electric cars, the manufacture of solar panels and cells, the green hydrogen industry, sewage treatment plants and seawater desalination plants, and water and electricity saving devices used in residential, commercial and tourist facilities.

Meanwhile, within the framework of the program for the improvement of the competitiveness of the industrial sector, El-Said explained that the plan aims to issue 700 standard specifications to comply with international standards, obtain quality accreditations for about 260 industrial products, and bring the number of registered ISO certificates to 4,200 certificates.

As for the industrial export development program, El-Said confirmed that it occupies a special interest in light of the state’s aim to achieve $100 billion in commodity exports within three years, explaining that the efforts made in this regard aim to increase exports by at least 15% annually while continuing to expand the program for export support for companies, to broaden the umbrella of repaying the burdens by adding commodity groups and new companies, especially small and medium-sized enterprises. As well as providing support and incentives in the field of port services and expanding the organization of internal and external exhibitions, with special attention to promoting promising markets on the African continent, which aims to develop Egyptian exports to increase from about $6 billion to reach $10 billion in 2024, and then to reach $15 billion by the end of 2025. Besides, she added that within the framework of the program for developing the skills of workers in the industrial sector, the plan includes providing vocational training for about 51,000 students and that the number of graduates from training programs is about 18,000 individuals, with the development and preparation of seven centers and updating their curricula.

Dr. Hala El-Said confirmed that the plan pays significant attention to the telecommunications and information technology sectors. This is considered a vital sector given its dynamic nature and its ability to grow and keep pace with recent technological developments in the world of communications. About EGP 83.4 billion were allocated as investments for this sector in 2023/24, with a growth rate of 49% over the expected investments for the previous year 2022/23, which amounted to about EGP 56 billion. The private sector plays a major role in accelerating the growth of this sector, as it receives about EGP 52.4 billion, or 63% of the total investments directed to the development of the sector, and it is expected that the sector’s output will reach about EGP 346 billion, which constitutes more than 5% of the gross domestic product (GDP) in 2023/24, compared to 3.4% in 2021/22, making it the fastest growing sector among all the country's sectors, for the fifth consecutive year.

Meanwhile, El-Said explained that the telecommunications sector has accomplished many achievements during the year 2022, as the digital government readiness index for 2022, issued by the World Bank, indicates Egypt’s classification among the group of leading countries in digital government with the classification (A), in addition to the progress of Egypt’s ranking, moving forward 4 spots, on the financial centers in the readiness index reaching the 73rd position, compared to the 77th position in the previous year. While the Egyptian Competitiveness Center advanced in the government readiness index for artificial intelligence to rank 65 in 2022, compared to the 111th position in 2019, and at the level of the general classification for the future of the technological business environment in Africa for the year 2021/22, Egypt ranked third among the best 17 African countries.

Besides, El-Said added that the investment plan for FY 2023/24 includes completing the development of Egypt's digital services system, completing the automation of the technological infrastructure of the state's administrative apparatus, establishing a closed government network to connect all government buildings, issuing the electronic visa and the digital insurance system for foreigners, and completing support for projects to develop cybersecurity solutions for facilities and vital sectors, in addition to replacing bandwidth and raising the efficiency of using the internet in the state’s administrative apparatus.

In the field of localizing the electronics industry, El-Said illustrated that the plan aimed to deepen local manufacturing and provide facilities and incentives for foreign companies to manufacture smart mobile phones and tablet computers in Egypt. In this regard, 26 local and foreign companies, specializing in electronics design and complex programs, were contracted to present at the Knowledge City in the New Administrative Capital. Besides, 48 companies were contracted in 2022 to establish outsourcing centers or expand their centers, totaling 56 centers.

Additionally, the 2023/24 plan aims to increase the sector’s exports from these industries to $8 billion, compared to $4.5 billion in 2020/21, and an expected $4.9 billion in 2022/23, within the framework of Egypt’s strategic strategy for the outsourcing industry (2022-2026). Likewise, in the field of building digital capabilities, the plan aims to complete support for digital skills development and capacity-building projects through the implementation of a set of initiatives, including the Egypt Digital Clubs initiative, the Digital Egypt Builders initiative, and the IT club projects, to increase the number of trainees at a rate of 20% annually, to boost the number of trainees from 200,000 in 2021/22, to about 265,000 in 2023/24.