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Sunday, 29 May 2022

Where our exports stood in 1Q2022

BY THE NUMBERS- Egypt’s exports were up in 1Q2022. Which sectors and markets have seen the biggest increases? Egypt’s non-oil exports increased 20% y-o-y in 1Q2022, recent data from the Trade and Industry Ministry shows. Exports rose to USD 9.18 bn, up from USD 7.67 bn in 1Q2021, according to the late-April statement. With the government targeting substantial increases of our non-oil exports — specifically ramping up exports in manufacturing, telecoms and IT, and agriculture — this most recent data could indicate the activity is starting to bear fruit.

A variety of sectors saw export increases in 1Q2022: Printing and packaging saw a 59% y-o-y increase, with 1Q2022 export revenues standing at USD 312 mn, the most recent Trade and Industry Ministry data shows. This was followed by readymade garments, which were up 44% y-o-y, standing at USD 625 mn. Building materials stood at USD 1.9 bn (up 35% y-o-y), and textiles at USD 279 mn (up 32% y-o-y). Egypt’s top engineering export sectors saw 1Q2022 revenues totalling USD 983 mn (up 32% y-o-y), with a recent report (pdf) from the Engineering Export Council of Egypt giving a breakdown of the different industries. Next up were chemical products and fertilizers which stood at USD 935 mn (up 23% y-o-y), according to ministry data.

Other rising export goods: Footwear and leather exports reached USD 26 mn (up 22% y-o-y); furniture at USD 183 mn (up 20% y-o-y); medicine at USD 210 mn (up 19% y-o-y); agriculture at USD 1.3 bn (up 10% y-o-y); and food at USD 1.9 bn (up 5% y-o-y).

It continues a trend that saw non-oil exports rise 26% y-o-y in 2021: Egypt’s non-oil exports hit a record USD 32 bn in 2021, up from USD 25.4 bn in 2020, we reported in January. Egypt’s largest non-oil exports are in the chemicals and fertilizers sector, which brought in USD 6.7 bn in 2021 (up 45% y-o-y), engineering and electronics which brought in USD 3.4 bn (up 46% y-o-y), and readymade garments which brought in USD 2 bn (up 39% y-o-y).

Our exports to African markets saw the most growth in 1Q2022, according to ministry data. Exports to non-Arab countries in Africa saw a 35% y-o-y increase, standing at USD 515 mn in 1Q2022. Meanwhile, exports to Arab League countries are up 28% y-o-y.

But the USA, Saudi Arabia, Turkey and Italy were our largest export markets overall in 1Q2022, GOEIC head Essam El Nagar was quoted as saying in the April statement. Exports to the US increased 21% y-o-y, rising to USD 623 mn in 1Q2022, ministry data shows. Meanwhile, exports to the EU increased 14% y-o-y, rising to USD 2.5 bn in 1Q2022. And exports to other markets increased 13% y-o-y, rising to USD 2.5 bn in 1Q2022.

Looking ahead, the government is focused on boosting exports in areas including textiles, metals, and construction materials between 2022 and 2025, President Abdel Fattah El Sisi said in late April during a televised speech introducing his plans to boost private sector investment (pdf). As we noted last week, the government has identified nine sectors to boost exports in: Wood and furniture, engineering, food and agriculture, chemicals, textiles, pharma and medical, printing and packaging, building materials, and metallurgical industries.

The plan indicates that we’re set to see increased manufacturing of specific products within these sectors, including metals (like magnesium or calcium), non-alkaline metals (like steel), plastics and rubber, food products, tractors and trucks, paper, computers, construction equipment (like drills), cosmetics and meds, and finished metallic goods.

Altogether, the government is targeting the replacement of imports valued at around USD 20 bn in the coming three years. This includes roughly USD 4.3 bn in chemical products, USD 4 bn in engineering services, USD 2.5 bn worth of meds, USD 2.4 bn in textiles, USD 1.9 bn in food and agricultural products, and USD 1.5 bn in construction and mining, the Ittihadiya plan notes.

The plan also involves building 300 large factories geared towards exports, in partnership with the private sector, and targeting the creation of 700k jobs.

The Finance Ministry is also increasing allocations for its export subsidy program in the FY2022-23 budget to EGP 6 bn, up from EGP 4.2 bn in the FY2021-22 budget, advisor to the Vice Minister of Finance Nevine Mansour tells Enterprise. “This is part of a concerted effort to support and increase exports,” she adds.

All subsidies owed as part of the government’s subsidy repayment program have now been paid to companies who have applied for the program, Finance Minister Mohamed Maait tells Enterprise. A total of EGP 34 bn has now been paid out to exporters by the government since 2012 with EGP 23 bn of this coming from the repayment program, Maait notes. The repayment program has seen exporters collect one-time cash payments in return for a haircut of 15%, which was then lowered to 8% in later phases of the program.

Your top industrial development stories for the week:

  • Unified system to locally produce prosthetics: The government is developing a unified system for the manufacture of prosthetic limbs and prosthetic devices to increase local production and reduce imports, Trade Minister Nevine Gamea said, according to a statement.
  • Lots of fresh investment in food, pharma and aluminum: Egypt Otsuka is planning a USD 30 mn factory, a consortium of Egypt’s Octa International and Saudi Olayan Group’s Aluminum Products Company is building a EGP 500 mn aluminum factory, German snackmaker Lorenz is investing EGP 200 mn in Egypt, and dairy producer Milkys will spend EGP 400 mn on a new factory.
  • Orascom Construction and Al Ahly Capital are building an industrial park in West Cairo that will be home to companies in logistics, light industries, and MSMEs.

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