CAIRO - 23 November 2020: The economic relations between Egypt and the United Kingdom have been witnessing significant developments in light of Covid-19, Brexit and Egypt’s economic reform program.
There are currently over 900 UK-invested companies operating in Egypt. Moreover, the total trade volume between the two countries has steadily increased over the last few years. And as it hit £1.2 billion during the first eight months of 2020, the Egyptian-British Chamber of Commerce launched a unique online B2B platform entitled “Trade Accelerator,” bringing the professional communities of both countries together in one digital space.
Launched in October, ‘Trade Accelerator’ is a professional social media platform that allows direct interactions between all members via private messaging, wall posts, viewing of other members’ profiles and sharing of relevant publications. Members can also share posts across platforms, including embedding Tweets and uploading YouTube videos.
To learn more about this new digital platform, as well as UK investments and businesses in Egypt, we sat down with the Chairman of the Egyptian-British Chamber of Commerce Ian Gray who gave us some precious insights.
Tell us more about ‘Trade Accelerator’ and its primary aims?
‘Trade Accelerator’ is focused on the UK and Egypt, so that companies and people looking for contacts or hearing about opportunities in the two countries can find those opportunities and find each other much more easily.
The web now offers such a wide access to people and companies; it is sometimes difficult to find potential partners or customers who have the same priorities. The ‘Trade Accelerator’ is focused on the bilateral opportunities and will make it easier to find partners.
What is the volume of trade exchange between Egypt and the UK?
The total trade volume has steadily increased over the last few years and crossed the £2 billion mark in 2019 (£2.1 billion in 2019, +9 percent from 2018). The total trade volume in 2020 until the end of August is £1.2 billion.
Which sectors do British investments focus on in Egypt?
British investment focus is not very different from any other country.
It is about matching the potential of the market with the skills and capability of the investing country. However, the investment is all going to come from the UK-based companies not the Government.
Fortunately, one of the greatest strengths in the U.K. is the financial sector which can provide funds for investing in almost any sector where the opportunity to grow is good. This is why the Egyptian-British Chamber of Commerce has just launched, in cooperation with Egyptian trade bodies, the online ‘Trade Accelerator’ to provide a ‘shop window’ for companies in both countries to display their interests and opportunities.
What is the total volume of British investments in Egypt?
Egypt’s economic reform program has supported increased inflows of FDI from the UK, which stood at $6.3 billion in 2018/2019. While the majority of inflows are in the upstream exploration sector, we are witnessing a gradual diversification of investment in sectors ranging from construction, to agriculture, health, manufacturing, renewables and transport.
What is the total number of British companies operating in the Egyptian market?
There are already over 900 UK-invested companies operating in Egypt, according to GAFI, the Egyptian General Authority for Investment & Free Zones. Well-known names include BP, Shell, Vodafone, HSBC, GSK, AstraZeneca and Unilever, among many others. In particular, there are now many UK retail brands trading successfully in Egypt; Matalan opened its doors in Egypt earlier this year.
What investment opportunities do you see in Egypt?
The real opportunities of the natural resources of wind and sunshine in Egypt are ideal, with the world heading towards green sustainable economies. Adding to this, the geographic location and trade agreements make Egypt a potential business gateway to both Africa and the rest of the Middle East.
The other great asset in Egypt is the potential workforce of many well-educated staff. The best opportunities will come not just from trying to serve within Egypt as a market but using the resources available in Egypt to trade in other countries.
How do you assess the bilateral economic relation between the two countries?
I hope that we shall hear very soon that the UK and Egypt have reached a final agreement on a trade deal to take effect as the UK moves out of the transitional phase of leaving the EU.
In the aftermath of Brexit, what opportunities have been created between Egypt and the UK?
The UK is looking to develop bilateral agreements with other countries including Egypt, which reflect the best interests of both countries without having to compromise or being restricted by some other EU country’s local political priority. Egypt offers opportunities of a talent pool, partnerships with the rest of Africa and the Middle East and a rapidly developing economy, all of which are attractive to UK companies. The Chamber is working hard to help make that come to life.
How has COVID-19 impacted the economic relation between Egypt and the UK?
Covid-19 is a serious challenge to governments and countries all over the World. It has adversely impacted some businesses significantly, such as aviation and tourism; and it has accelerated working in a virtual manner. I have seen some good cooperation between Egypt and the UK; dealing with PPE equipment and the increase [of remote work] have enhanced the opportunities for Egyptian businesses to offer remote services to companies in the UK and elsewhere.
The business environment has changed, with different priorities; but it has not affected relations between the countries.
How have businesses between the two countries dealt with Covid-19?
I think businesses between both countries have dealt with COVID-19 as best as possible under the circumstances. The trend for Egyptian exports to the UK showed a steep decline in value terms during Q2 2020 (-37 percent YoY), which is understandable as this was the period [when] the UK had a lockdown. The entire UK economy faced the largest slowdown in recent history. Initial figures for Q3 2020 show a more encouraging trend (-15 percent YoY until the end of August).
UK exports were also affected in the first quarter of 2020 (-9 percent YoY), but recovered in the second quarter (+3 percent YoY). From our conversations over the past few months with UK exporters and various Chambers of Commerce in the UK regions, we anticipate a further recovery in Q3, as exporters view Egypt as a market that has coped well with the Covid pandemic compared to other export destinations.
How did the UK-Africa Investment Summit help in enhancing trade and economic relations?
The UK Government Africa Investment Summit was a great opportunity to reinforce the message that the EBCC pushes in the UK about Egypt being a business gateway to Africa and the rest of the Middle East.
To what extent did the economic reforms applied by the Egyptian government help in attracting British investments?
Over the last few years, the economic reforms have clarified and simplified the business environment in Egypt. This is helpful for companies thinking of investing in the Egyptian market. However, there are still big cultural differences in how people work together. As an example, UK companies want to plan meetings a long way upfront; and in Egypt, they can be organized very quickly. You cannot expect Governments to simplify the cultures. That is up to companies and the people in them, if they want to be successful. UK companies really appreciate that almost everyone they meet in Egypt speaks English.
What are the future plans of the British-Egyptian Chamber?
The Chamber is working with the British Egyptian Business Association (BEBA) in Cairo, as well as other business groups (EBA, EJB, etc.) to ensure that any companies wanting partners to do business across the two countries can find each other. Large companies always find each other but mid-sized companies find this difficult. We help companies of all sizes talk to each other and we work with both Governments to understand the priorities and help companies take advantage of this.
Both the UK and Egypt have made Green Economy a big priority in the next few years; and with all the sunshine and wind available in Egypt, the Chamber is really excited for what can happen and what our two countries can do together.
This interview is conducted by Egypt Today