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Economic Demographics
Economic Demographics (2020)
- Population: over 100 million
- GDP: $303 billion
Composition of GDP
- Agriculture: 11.7%
- Industry: 34.3%
- Services: 54%
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Market Overview
The Ministry of Environment (MOE), the Ministry of Water Resources & Irrigation (MWRI), the Ministry of Housing, Utilities & Urban Communities (MHUUC), Egyptian Environmental Affairs Agency (EEAA), the National Water Research Center (NWRC), and the Holding Company for Water and Wastewater (HCWW) have different roles in handling water- and environmental-related issues.
The EEAA represents the executive arm of the Ministry of Environment and manages an Environmental Protection Fund (EPF) that includes funding from the general state budget, donations and grants from national and foreign organizations, fines and compensation awarded by courts, and out-of-court settlements.
The main goal of the EPF is to stimulate investment in the environmental sector and support the government’s environmental social and economic policies. To achieve these goals, EPF provides financial assistance on a competitive basis for projects that benefit the environment. Eligibility criteria include:
- Project targets one or more areas that address the EPF’s environmental priorities
- Applicant is a legally registered local entity
- Applicant demonstrates the ability to contribute its share of project costs
- Applicant is of sound reputation
- Absence of any restrictions such as problems related to the applicant’s current activities or relationship with banks, if applicable
- Project is deemed sustainable
- Commitment to expend the funds as allocated
- A list of job opportunities the project will provide
The Holding Company for Water and Wastewater (HCWW) is mainly concerned with drinking water purification, desalination, and distribution; wastewater collection, treatment, and disposal; and sludge treatment services. The company works closely with the MHUUC to provide utilities to new communities, such as the New Administrative Capital, and expand services to inhabited and industrial areas in Upper Egypt and border cities. Current and future projects include:
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Leading Market Sub-Sectors
Solid Waste Management
According to the 2013 annual report of waste management statistics in Egypt, Egypt has generated a total of 89.03 million tons of solid waste, the majority of which were municipal solid waste, calculated at 21 million tons. This total was expected to exceed 100 million tons in 2020.
The 2019-2023 executive plan for solid waste recycling consists of three main programs:
- Attracting investments to develop the infrastructure for trash sorting facilities in Cairo, Daqahliyah, Sharqeya, Fayoum, and Luxor
- Improving garbage collection and transportation, street cleaning services, and management of safe landfills
- Developing waste recycling system across the country, the sector’s human capital capacity, public awareness raising campaigns, and supporting the informal sector and small and medium-sized enterprises (SMEs) in the recycling business
Nature Conservation and Water Supply
About 85% of Egypt’s water resources are used for agricultural irrigation systems, which are characterized by high levels of water losses and low efficiency. The 2017-2037 National Water Resources Strategy, which is intended to address Egypt’s water-related challenges over the next 20 years, is expected to cost EGP 900 billion (about USD$55 billion). According to the MWRI, the national strategy has four pillars: develop water resources (desalination and recycling), enhance water quality, rationalize water use, and create an enabling environment.
Wastewater Recycling & Hazardous Waste Management
Egypt annually produces about 16.4 billion cubic meters (BCM) of wastewater (4.4 BCM of sewage water and 12 BCM of agricultural wastewater).
According to the 2030 Strategic Vision of Treated Wastewater Reuse, Egypt’s governorates are divided into two categories: governorates without agricultural expansion plans, which include Menofia, Dakahlia, Kafr Elsheikh, Gharbia, Kalyoubia, Cairo, Alexandria, and Port Said; and governorates with agricultural expansion plans, which include Giza, Behaira, Minia, Damietta, Sohag, Assuit, Sharkia, Qena, Suez, Fayoum, Beni Suef, Aswan, Ismailia, Luxor, Matrouh, Red Sea, and New Valley.
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Market Opportunities
Water sector development is a priority for the Government of Egypt because of:
- High annual population growth (2.5%), which puts pressure on the existing water supply
- Lack of control of water supply sources (about 97% originates from outside Egypt’s borders), which makes the supply highly vulnerable and sensitive to any uncoordinated upstream developments, especially after the establishment of the Grand Ethiopian Renaissance Dam (GERD)
Egypt, with available water resources of 610 m3 per capita as of 2019, is among the countries that fall below the United Nations’ (UN) water poverty line (estimated at 1,000 m3 per capita). Egypt also suffers from a large food production deficiency, forcing the country to import about 55% of its current food needs. This figure is expected to climb to 75% after the GERD is complete because of the huge quantity of water held back during the filling of the GERD’s reservoir, which has an estimated capacity of 74 billion m3 of water. That would cut 25 to 33 billion m3 from Egypt’s annual quota of Nile water which, in turn, could yield a loss of about two million acres of cultivable land.
Alternative water resources (potential investment opportunities):
- Reusage of drainage water and treated wastewater
- Desalination of sea water as an alternative for drinking and agriculture
- Drilling water wells
- Construction of water condensers next to severe evaporation sites at coasts and cultivated lands
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Market Entry
For an imported shipment to be accepted by the Egyptian Customs, the shipment must have the following documents:
- Commercial Invoice: Two copies plus the original document are required. Legalization by the Egyptian consulate in the country of origin is required in most cases.
- Certificate of Origin: Two copies plus the original document are required. The Certificate of Origin must be authenticated by the Egyptian Consulate in the country of origin. Natural products are considered to originate in the country where the goods are extracted. The Certificate of Origin must bear a statement that the information given is true and correct to the best of the shipper’s knowledge.
- Packing List: A packing list may be required by the consignee and is recommended in most cases.
- Bill of Lading: A bill of lading must show the name of the shipper, the address, and the number of bills of lading issued. There are no regulations specifying the form or number of bills of lading required for shipment. The number of bills of lading required depends upon the carrier.
- Pro Forma Invoice: This is an invoice required by the importer for submission along with the import license. It must show the country where the goods were manufactured.
- Letter of Credit (L/C): The Central Bank of Egypt advises all banks operating in Egypt that L/Cs must be covered 100% in cash by the importer, except for some food items. This replaces the previous procedure whereby banks and their clients reached their own agreements and usually covered 10 to 20% of an L/C’s value. In general, the exporter may not ship the goods before the Egyptian bank has provided notification of the opening of a L/C. If the goods are shipped before the L/C is opened, the importer runs the risk of being fined up to a maximum value of the goods. If the importer does not bear the cost, then the exporter will have lost the value of such a shipment, and in the case of products with a limited shelf-life, the delay at Customs can mean that even if the exporter (e.g., a company in the United States (U.S.)) wanted to take back the shipment, it’s no longer of any use. According to new regulations, the U.S. exporter must submit the invoice as well as export documentation to his bank and the U.S. bank should inform the Egyptian bank about a request to open the L/C. Import transactions are based on document collections.
- Content Analysis of the Commodity: Required for those products that may be subject to standards testing.
- Inspection and quality control certificates from other authorities as required.
All certificates issued concerning the shipment of product and the product description must be countersigned by the Chamber of Commerce and notarized by the Egyptian Embassy or Consulate in the country of origin.
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Trade Barriers
Under the 1986 United States-Egypt Bilateral Investment Treaty (BIT), Egypt is committed to maintaining an open investment regime. The BIT requires Egypt to accord national and Most-Favored Nation (MFN) treatment, with certain exceptions, to U.S. investors to allow investors to make financial transfers freely and promptly and also adhere to international standards for expropriation and compensation. The BIT also provides outlines for binding international arbitration of certain disputes. Despite these assurances, in recent years, U.S. pharmaceutical investors were repeatedly prevented from repatriating profits earned in Egypt.
Based on a review of Egypt’s investment policies, the Organisation for Economic Co-operation and Development (OECD) invited Egypt to join the OECD Declaration on International Investment and Multinational Enterprises. Egypt signed the Declaration in 2007, becoming the first Arab and first African country to join. During this process, Egypt agreed to review the restrictions on investors identified in the OECD’s 2007 Investment Policy Review of Egypt, such as certain limits in the tourism sector.
According to the UN world investment report 2019, although foreign direct investment (FDI) inflows to Egypt decreased by 8%, Egypt remained the largest FDI recipient in Africa in 2018, receiving $6.8 billion). Foreign investment in Egypt was skewed toward the oil and gas industry, as significant discoveries of offshore gas reserves attracted investments.
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U.S. Commercial Service Contact
Mr. Khaled Elzoughbi
Commercial Specialist - US Embassy Cairo
Email Khaled Elzoughbi
