Egypt, one of the oldest civilizations, is today becoming one of the hottest investment destinations. Seven years ago, the Egyptian government adopted a long-term strategy to boost the performance and economic attractiveness of the country. Starting with monetary reforms with the assistance of the IMF, Egypt has implemented one of the most successful programs of economic turnaround. The Egyptian experience was praised by all international institutions and is presented as the example for developing countries to follow.
In parallel with monetary reforms, the authorities have been conducting many infrastructure megaprojects (transportation, energy, digital transformation, legislative) to prepare Egypt for a long period of sustainable growth.
The fruits of these reforms and huge investments are already having an impact on the Egyptian economy. Based on IMF predictions, Egypt will be one of only 18 countries to enjoy economic growth in 2020 (revised upwards to + 3.5% in September after a June forecast of 2%). Long-term growth should be close to 8%.
Growth is accelerating, and business opportunities are emerging like nowhere else in the world. Egypt is clearly open for business. Having worked during 20 years in 15 countries located in 3 continents, I can confirm that the magnitude of change achieved by Egypt, greatly surpasses anything I have seen before.
Below, you will find 30 strong reasons why you should consider Egypt as your next investment destination.
Investors will find many market opportunities in Egypt, as well as untapped growth potential
1) Vast market, thanks to a large (100 million) and young (average age 25) population, which is expected to reach 160 million by 2050.
2) One of the most diversified emerging economies, making Egypt resilient to crisis and economic cycles.
4) The eighth-highest contributor to global growth in 2019 (PPP-based), according to Bloomberg, thanks to multiple growth engines.
Infrastructure is ready to support business growth
5) Ranked 28th worldwide for road quality, thanks to the huge investments undertaken by the government (Egypt was ranked 115th as recently as five years ago).
6) Cheap, abundant, and diversified energy sources (gas, solar, hydro, wind, and nuclear).
• Excess capacity of 15 gigawatts -after a deficit in 2013- exported t oneighbouring countries.
• Regional center for gas transformation and export to Europe, thanks to large reserves and established processing facilities.
• One of the largest solar parks in the world, Benban, covering 37.2 km2 and visible from space, producing 4 TWh of electricity per year.
7) Determination to boost green energy production and use.
• Renewable energy target at 60% by 2035
• National program to replace gasoline by LNG and to rely in the near future on locally produced electric vehicles.
8) Tripling of Internet speed in just 12 months and still accelerating.
9) 887 new laws passed, and 294 international treaties ratified in the last five years to attract foreign investors and increase the efficiency of government services.
• new investment law.
• digitization of customs.
• digitization of tax collection.
• many more initiatives expected particularly in the new administrative capital.
10) Already signed trade treaties giving free access to 2.6 billion people including 47 European countries, and 19 Eastern and southern African countries (Comesa).
The geographical location of Egypt has always been an unmatched advantage throughout human history.
11) Proximity to many European markets, gateway to Africa, regional hub for the Middle East (confirmed by Amazon’s recent decision to set-up in Egypt its regional manufacturing hub ).
12) What can we say about the Suez Canal, through which 10% of the world’s traffic moves?
13) Spared from most natural catastrophes such as hurricanes, volcanos, cyclones, and tsunamis.
The 100 million population offers an immense pool of talent
15) 125 general universities by 2030 teaching disciplines most in demand, such as robotics, artificial intelligence, health-tech, IoT, an increase from the current 72 universities.
16) Ranked 56th out of 172 countries in Government AI Readiness Index, jumping 63 places in a single year.
17) Wide use of European languages, particularly English, making Egypt a hub for international call centers (e.g. Vodafone).
18) Cheap labor, thanks to the low cost of living: average monthly salaries are $150 for workers and $400 for engineers.
Egypt offers a rich and mature business environment
20) 38 commercial banks, 39 insurance companies, many investment banks, numerous law firms, specialized local and international management consulting companies, multiple chambers of commerce for specific sectors or bilateral cooperation with foreign countries, several governmental bodies providing reliable data about the Egyptian market (CAPMAS, ECES), rich choice of office space, free zones benefitting from exemptions from customs taxes, sales tax, and many other fees.
21) A sound banking system considered the most efficient worldwide (cost-to-income ratio less than 30%).
22) Egypt hosts 138 foreign embassies, higher than the 121 embassies in the UAE and the 112 embassies in the Kingdom of Saudi Arabia.
23) Price purchasing parity (PPP) of 4.33 according to the world bank , making Egypt four times cheaper than the US (and even cheaper compared to many European countries).
24) Ranked the eighth-safest country in the world, according to a Gallup Global Law and Order report, ahead of all European countries except Norway and Switzerland.
Egypt is beating all macroeconomic targets
25) Strong long-term growth prospects averaging between 6% and 8%; one of only 18 countries (and the only country in the MENA region) expected to have positive economic growth in 2020 (+ 3.5%), according to the IMF; same positive outlook for the European bank for reconstruction and development, making Egypt the only economy across all of the EBRD regions likely to escape recession in 2020.
27) Stable currency: one of the few emerging currencies to appreciate against the dollar in 2020 (+ 2.1% YTD on October 31st).
28) Political stability proven by the smooth democratic process to elect the representatives of both parliament chambers in 2020.
29) Shrinking trade deficit, increasing remittances (+ 7.8% year on year after seven months of 2020), rebound of Egypt’s reserve of foreign currencies to reach USD 38 billion, covering eight months of imports.
30) Second-highest real interest rate in the world, despite recent rate cuts, making Egypt the new darling of emerging markets, foreign investors’ holdings of government T-bills reached $21 billion in mid-October, up from $10.4 billion by the end of May 2020, only country in the Middle East and Africa to maintain its credit rating with a stable outlook at the big three rating agencies, despite Covid-19 challenges.
On top of all these rational reasons, Egypt offers a magnificent climate, splendid sandy beaches, rich coral seas, mind-blowing historical monuments, and a most vibrant social life. All these additional aspects offer a superb quality of life for foreign expats.
Last but not least, Egyptians are genuinely one of the warmest and most friendly people on earth, bonding easily and appreciating long-lasting relationships.
So, what are you waiting for? Come to Egypt and we will help you explore investment opportunities!
Author: Nadim Samna, Managing Partner at Stratexis
ILLA, an African asset-light FMCG Logistics Company Raises $2M Investment Round
ILLA Team (Image: Supplied)
Cairo-based FMCG Logistics company ILLA secures a $2M investment round to boost its growth in the market and diversify its offering to the FMCG value chain. The round was co-led by Watheeq Financial Services and Golden Palm Investments. The round saw participation from Loftyinc Capital Management, Kepple Africa Fund, Cubit Ventures, AUC Angels, Oqal Angel Network and FLat6Labs Cairo doubling down on its investment in ILLA for the third time
Founded in 2019 by Mahmoud Elzomor, Alaa Jarkas, Ahmed Sakr, and Hossam Saraya, and shortly joined by a well versed management team with Mohamed Emera as Director of Growth, Mohamed Kamal as CFO, and Khaled Elzomor as Commercial Director ILLA aims to optimize post-production supply chain activities for FMCG brands, starting with middle-mile delivery services, being the most fragmented part of the value chain.
By focusing exclusively on the FMCG market, ILLA was able to capture the business and trust of over 65 clients in its portfolio, with household names to the likes of Coca-Cola, P&G, Danone, Nestle, Juhayna, and Pepsico.
Since 2019, ILLA has been delivering on its core promise of moving goods with efficiency on behalf of FMCG brands, spanning over 5,000,000 KM and completing over 250,000
transactions, across 27 governorates in Egypt leveraging its tech platform to power delivery
Before ILLA, FMCG brands had to rely on a variety of owned and outsourced assets to manage their delivery operations, and that adds to the pain of a fragmented logistics cycle, which gave way to the value offering of ILLA to those brands; a streamlined value chain with visibility, control and growth potential for each individual brand, with ILLA acting as an asset-light logistics company, leveraging its tech platform and operational intelligence to deliver an unparalleled experience to FMCG brands.
“ILLA will use the funds to fuel its expansion and growth in Egypt and disrupt the traditional route to-market for FMCG companies and SMEs, while building more around its tech platform to deliver more value to its clients and drivers alike”, says Mahmoud ElZomor, Co-Founder and CEO of ILLA
“Mahmoud and the team are tailor-made for ILLA, bringing decades of diversified experience to help drive efficiency into the $15 trillion global FMCG market. With the onset of covid, the global supply chain management industry is suitable for modernization, and ILLA is uniquely positioned as an end-to-end execution platform. In addition, ILLA’s smart logistics solutions also play a crucial role in providing a full stack of operational solutions that will disrupt the sector, and will change the behavior for all stakeholders within the FMCG market,” said Khaled Zaidan of Watheeq Financial Services.
“Middle-mile logistics is one of the most underinvested segments of the global supply chain market. ILLA has identified this massive opportunity in MENA and is offering a full-stack B2B supply chain management platform enabling FMCG brands to reach retailers directly at the lowest cost per case. Mahmoud and team are utilizing the trucking logistics shared economy and tech automation to innovate within a large and fast-growing market.” – AJ Okereke, Partner, Golden Palm
Fawry Invest in Sudanese Classifieds and Marketplace Platform alsoug, Marking First Overseas Venture
Fawry CEO Eng. Ashraf Sabry (Image: Supplied)
Fawry establishes strategic partnership with Sudanese consumer platform with an eye to scaling up technology platform beyond Egypt.
Fawry (the “Company”, FWRY.CA on the Egyptian Exchange), Egypt’s leading provider of e- payments solutions and digital banking services, announced today that it has finalized an investment in alsoug.com, Sudan’s largest online classifieds platform and marketplace, to help build out alsoug’s new fintech platform, Cashi. Fawry has acquired a strategic minority stake in the alsoug.com/Cashi holding company, marking the Company’s first venture capital investment outside of its Egyptian home market. The investment comes as part of Sudan’s first announced venture capital funding round.
Fawry played a leading role in ensuring the success of the USD 5m round, with the Company’s presence catalyzing involvement from other strategic Western VC players. As a strategic investor in alsoug, Fawry intends to leverage its long track record with white label technology solutions to help the platform expand in scale, enhancing the platform’s merchant acquisition operation, refining its go-to-market approach, and providing valuable insights that inform high-level strategy across all segments of the business.
Founded in 2016 by a world-class team of technology entrepreneurs, alsoug is now Sudan’s leading consumer internet platform and its largest digital marketplace. Alsoug is one of Sudan’s most downloaded apps on the Google Play app store with two million downloads and is a platform where sellers can list everything from real estate and cars to services and commodities.
Despite the political and economic headwinds experienced by Sudan as it goes through a transformative political transition, the platform has grown rapidly since 2016, reflecting alsoug’s highly skilled team of in-house developers, comprehensive coverage by its on-the-ground teams, as well as Sudan’s promising economic fundamentals. Moving forward, and building on the strategic partnership with Fawry, alsoug will significantly expand its service offering by building a new payments network capable of serving customers across Sudan, one of the largest countries on the African continent.
“We’re delighted to be kicking off our partnership with alsoug, one of Sudan’s most exciting prospects and a Sudanese leader in tech innovation. This is our first investment foray outside of Egypt in our thirteen years of operation, and we’re confident that our story with alsoug and Cashi will be a special one. Fawry’s investment in alsoug delivers on our plans to venture into underserved international markets by leveraging our technology and teaming up with strong local players. This investment will provide us the opportunity to strategically expand our footprint into Africa and transfer the experience we’ve gained in the dynamic Egyptian market to neighboring Sudan, an economy with major potential across several sectors and with a significant pool of entrepreneurial talent. Meanwhile, Fawry’s strategic partnership with alsoug leaves it ideally placed to help guide the platform’s rollout of a countrywide payments system, a feat which Fawry has already managed through a scalable, robust, and best-in-class technology platform.” said: Fawry CEO Eng. Ashraf Sabry
“This investment marks a significant milestone not just for alsoug, but for the nascent tech space in Sudan as a whole, which has until today been essentially shut out of the global capital markets. I hope this investment is the first of many and that the huge potential of the tech sector in Sudan is fully realized in the coming years. We are looking forward to working with Fawry, and our new strategic shareholders, to continue our expansion from the classifieds and marketplace space into payments. We will build a payments platform that will deliver financial inclusion to all Sudanese.” said Alsoug co-founder and CEO Tarneem (Nina) Saeed
ReelFruit Secures $3 Million Series A Funding To Expand Production with New Factory
ReelFruit CEO/Founder; Affiong Williams (Image: Supplied)
ReelFruit, a premium dried fruit company known for its high quality nutritious snacks, today announced a Series A investment of $3M. Alitheia IDF led the round and invested $2M while other investors included Samata Capital and Flying Doctor Healthcare Investment Company. The New Practice advised ReelFruit on the transaction. With the capital, ReelFruit will scale its dried fruit production, develop new products, and increase exports by 10 x to 15 MT in the first year.
Key to its expansion plans, ReelFruit will acquire a new factory in Ogun State to increase its monthly dried fruit production from 6 MT to 30 MT. The factory will hire over 200 people in its first year. With its greater supply of dried fruit, ReelFruit will continue to innovate new products for the local and international markets.
As part of its efforts to secure high quality raw materials, it plans to deepen its existing work with Nigerian fruit farmers. The company will form an agro-extension services program for 250 registered mango and pineapple producers. The program will boost fruit yields and help support a steady supply of high quality raw material for the factory.
To meet strong demand for its dried fruit snacks, ReelFruit will diversify its local and international sales channels. The company will launch an e-commerce channel for direct US sales by 4Q21. ReelFruit will also unlock more B2B opportunities including white-labelling and co-packing to support the national drive toward import substitution. Local buyers will be able to buy dried fruit locally thereby reducing dependence on imports. Reelfruit is already on track to double last year’s revenues by November 2021.
“This investment takes ReelFruit to the next level. We can meet increased demand for our products and tackle one of our biggest challenges – raw material supply. We’re thrilled that this will unleash a greater impact on our value chain by increasing farmer incomes and creating up to 300 decent jobs for Nigerians,” Affiong Williams, ReelFruit CEO/Founder.
“Alitheia IDF is proud to support ReelFruit’s ongoing efforts to boost food production in Nigeria and positively impact communities through deliberate partnerships with local farmers, distributors, and retailers. The investment will strengthen the company to unlock further growth, upskill farmers and improve economic outcomes for thousands of women who play a significant role in the production of ReelFruit’s products,” said Tokunboh Ishmael, Alitheia IDF co-founder.