We recently had breakfast with 20 top CEOs to talk about why exports and FDI are key to our economy going forward. After reading our five-step recipe for turning Egypt into a global export hub and FDI magnet, participating CEOs agreed to answer two questions on the record for our latest CEO Poll.

We have already heard from:

• GSK’s Mohamed El Dababy, who says the starting point is tourism;
• McKinsey’s Jalil Bensouda, who points to business process outsourcing and customer relationship management;
• Somabay’s Ibrahim El Missiri, who believes tourism and aviation can be quick draws for FX;
• ALC Alieldean Weshahi & Partners’ Bahaa Alieldean, who thinks freezones are key;
• HSBC Egypt’s Todd Wilcox, who wants us to invest in EV manufacturing.

TODAY- Sherif El Kholy (LinkedIn) is a partner at Actis, the high-profile emerging-market private equity firm. Sherif has been with Actis since 2004, rising through the ranks from associate to become partner and head of Middle East and North Africa. He has led investments in bold-name companies including Edita, Rashidi El Mizan, Mo’men, Orascom Telecom and Lekela. He participated in our 2019 CEO Poll and, more recently, in our Climate CEO Poll — he and Actis have led the development of c. 15 GW of renewable energy across emerging markets.

ENTERPRISE- Which industry would you put on a focused short list — and why?

SEK- The focus in the short term should really be on service-oriented industries: It’s where quick wins can be achieved. The route to market and capex lead times are much shorter, so focusing on the export of services should be a short-term priority while we work in parallel to develop manufacturing-focused industries in the longer term.

One very clear, low-hanging fruit on the services side is to redefine what “tourism” means — we need to remodel our offering to be driven by quality and experience rather than value and price as they are today. Doing so will deliver very, very quick results.

The second segment that looks very attractive is medical tourism, where we need to establish ourselves as a very big hub catering to regional and continental demand for quality healthcare. Tunisia and Morocco have done well, but we could become _the_ player given the quality of our healthcare industry and our location. Anecdotally, the size of the market is USD 40-45 bn annually in Africa, demand-wise — so positioning ourselves as a very big center there could attract a lot of hard currency into the country very quickly. We have the people, we have the centers of excellence, we have the infrastructure.

And then the third one is data- and tech-related. There’s a great opportunity for us to position ourselves as a center for outsourced IT services, including through the delivery of large-scale regional data centers.

This is the short-term focus that will bring in hard currency.

In the longer term, manufacturing focused on everything in the “green economy” should be here in Egypt. COP27 and the green corridor initiative make it clear we should focus on feeder industries related to the green economy. We’re a natural manufacturing hub for international producers of EVs and large-scale battery storage. We should also be attractive to manufacturers of wind turbines — they’ve started to put production capacity elsewhere in the region, and we should attract some of that to the Suez Canal Economic Zone. We have a unique location and can deliver unique incentives.

So far, our industrial policy has focused on import substitution — it needs to be refocused on export promotion. We need to build exporting industries in the SCZone and other areas in which our location and incentives are globally competitive.

But to do this, we must develop a culture that prioritizes interfacing with investors in a way they understand. We need to talk to global industry leaders and see what it would take for them to set up here and not there.

Other countries have done it and done it well. There are clear success stories out there.

E- Why are exports and FDI the way forward?

SEK- There’s a qualitative and a quantitative element here. Quantitatively, exports are a big source of hard currency for the country — as is FDI. Qualitatively, prioritizing FDI will be good for everyone because it will drive an improvement in the investment climate here. Couple an FDI drive with the very bold reform decisions taken at the end of October, with the float of the EGP, and there is so much potential.

The conditions of the IMF package encourage us to take active steps to reform our economy. And we’ve done the right thing with the float of the EGP. Capitalizing on that means we’ll get the benefits of a floating currency and not just the inflationary impact.