Ministry of Planning, Economic Development and International Cooperation Reviews Manufacturing Sector Targets for the FY 2025/2026 Plan

Dr. Rania Al-Mashat: Manufacturing is a key sector for the structural transformation of the Egyptian economy towards tradable and exportable sectors.

 

The state gives utmost importance to the industrial sector to increase its contribution to the GDP, expand the export base, and boost foreign currency revenues.

 

 EGP 252.8 billion in targeted investments for the manufacturing sector in the fiscal year 2025/2026 plan, a 154% annual increase.

 

The private sector accounts for more than 83% of the sector's investments, compared to about 17% in public investments.

 

 Non-petroleum manufacturing accounts for more than 65% of the sector's total investments.

 

 

In a report, the Ministry of Planning, Economic Development and International Cooperation reviewed the targets for the manufacturing sector in the fiscal year 2025/2026 plan. The fourth section of the plan details the sectoral targets, starting with commodity sectors, which include agriculture, irrigation, manufacturing, extractions, and electricity. This is followed by productive services sectors, including transportation, information and communication technology, tourism, and the Suez Canal Authority.

 

H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development and International Cooperation, emphasized that the manufacturing sector is characterized by its dynamism and diversity, which enables it to adapt quickly to technical developments in production and keep pace with changes in international supply chains and trade.

This also helps diversify the productive structure by introducing a variety of industrial products.

In addition, the industrial sector is distinguished by its high levels of productivity, allowing it to achieve consistently high growth rates.

The sector is also characterized by its strong interconnectedness with other economic sectors, its growing capacity to absorb labor, and its export potential in foreign markets.

 

Sector's Contribution to GDP

 

H.E. Dr. Al-Mashat pointed out that manufacturing holds the first rank in terms of its contribution to the gross domestic product (GDP), with a share of no less than 16%, and to the total workforce, with a share of 14%.

 

The sector also contributes more than 85% to national exports from the total non-petroleum commodity exports, thereby enhancing its role in mitigating structural imbalances in the trade balance. In addition, the sector is effective in driving development efforts and accelerating growth in other economic sectors due to its interconnected market transactions.

 

H.E. Minister Al-Mashat added that given the great importance of the manufacturing sector, it is considered one of the key priority sectors in the National Program for Structural Reforms, which aims to diversify the economic base and increase its flexibility and ability to keep up with global knowledge and technological developments, thereby enhancing the international competitiveness of the Egyptian economy.

 

H.E. Dr. Al-Mashat stressed that manufacturing is the engine of economic development in Egypt and a key driver of growth for all other economic sectors through its forward and backward linkages and the general effects resulting from the development and diversification of the sector's activities.

 

According to the sector's development strategy and plans, it is targeted that by 2030, Egypt will become a leading country in the Middle East and North Africa region and a major center for exporting medium-technology industrial products.

 

H.E. Minister Al-Mashat confirmed that manufacturing is one of the main pillars of the structural transformation of the Egyptian economy towards tradable and exportable sectors. She noted that the state attaches utmost importance to the industrial sector to increase its contribution to the GDP, expand the export base, and increase foreign currency revenues.

 

Industrial Investments in the 2025/2026 Plan

 

Regarding industrial investments in the 2025/2026 plan, H.E. Dr. Al-Mashat mentioned that the plan targets investments of about EGP 252.8 billion for the manufacturing sector, an increase of 154.1% over the actual investments of EGP 99.5 billion in 2023/2024.

 

The share of non-petroleum manufacturing is estimated at about 65.6% of the sector's total investments, while the petroleum industries account for the remaining 34.4%. She pointed out that private investments account for about 83% of the sector's total investments, compared to 16.9% in public investments.

 

The report from the Ministry of Planning, Economic Development and International Cooperation also indicated the industrial sector's targets for 2025/2026 within the framework of the medium-term plan. It is targeted to increase industrial output in 2025/2026 to EGP 6.8 trillion, compared to an expected output of EGP 5.7 trillion in the previous year, with a growth rate of 19%.

 

The report noted the development of the industrial structure during the plan year, with the production of both petroleum and non-petroleum industries growing at similar rates, which keeps their relative weights largely stable (82.5% for non-petroleum industries and 17.5% for petroleum industries).

It is also targeted for industrial GDP to reach about EGP 2.9 trillion in 2025/2026, compared to an expected EGP 2.4 trillion in 2024/2025, with a growth rate of 19%.

 

Strategic Directions for Industrial Development

 

The report highlighted the strategic directions for industrial development in the 2025/2026 plan, which adopts five strategic directions for developing the industrial sector in line with Egypt's 2030 Vision and the National Program for Structural Reforms.

 

The first direction focuses on deepening local manufacturing for many imported components for which local manufacturing is viable. This represents investment opportunities for national companies and saves foreign currency.

 

These import substitution projects are being inventoried based on current import lists and the availability of local manufacturing components. Promising fields include iron and steel products, paper products, the manufacturing of medical drugs, serums, and vaccines, the manufacturing of pipes and boilers, and automotive components and spare parts. This is done with careful adherence to international standards and quality considerations to enhance the international competitiveness of the Egyptian industrial product.

 

The second direction is related to completing the provision of infrastructure for industrial zones, including completing infrastructure works at the Rubiki Leather City and raising the efficiency of the infrastructure of industrial zones in Upper Egypt in the Sohag and Qena governorates. This also includes continuing to modernize the infrastructure in many other specialized industrial complexes that take the form of industrial clusters. In addition, there is a continuation of establishing 17 industrial complexes in 15 governorates, which include more than 5,000 ready-to-use industrial units under the usufruct system, as well as completing two industrial complexes to serve high-tech industries and offering new land for private investment.

 

The third direction relates to developing industries with export potential for promising markets, which allows for an increase in industrial exports by at least 15% annually. This is particularly the case for exports of chemical products, fertilizers, building materials, food industries, and engineering and electronic goods. This also includes continuing to develop export support for companies, expanding the umbrella of burden reimbursement, and promoting Egyptian exports to the African continent. It also includes continuing to raise the efficiency of commercial representation to develop performance levels and provide distinguished informational services to investors, exporters, and export councils.

 

The fourth direction is to provide human resources and improve the quality of the Egyptian industrial product by raising the professional efficiency of trainees and developing the performance and outputs of the university technical education system to provide skilled labor. This also includes developing vocational schools and training centers, and raising the efficiency of industrial apprenticeship centers and specialized training centers. Improving the quality of industrial products is achieved by completing the modernization of information centers in the Ministry of Industry, completing the standardization system for quality specifications, completing the rehabilitation of the Quality Control Center's laboratories and buildings, and expanding the provision of technical support services for heritage crafts and industrial facilities, as well as completing the provision of modern inspection devices to examine the operational performance of factories and the level of outputs.

 

The fifth direction focuses on giving priority to the development of green, environmentally friendly industries to ensure the sustainability of development, such as the green hydrogen industry, the manufacturing of solar power station components (such as panels, solar cells, and electronic chips), the manufacturing of wastewater treatment and seawater desalination plants, the electric car industry, and the manufacturing of water- and electricity-saving appliances. This leads to enhanced resource efficiency and reduced carbon dioxide emissions and waste.

 

It is worth noting that the GDP growth indicators during the third quarter of the past fiscal year 2024/2025 showed that the non-petroleum manufacturing sector topped the sectors contributing most to the growth rates achieved, with a rate of 1.9%.

 

Since the fourth quarter of the last fiscal year 2023/2024, the non-petroleum manufacturing sector has started to achieve positive growth and turn its contribution to growth rates from contraction to a positive contribution. The sector achieved a growth of 7.1% in the first quarter of the current fiscal year, then 17.7% in the second quarter, and 16.3% in the third quarter.