Egypt to get $145m investments in automotive sector

Reuters/Fabian Bimmer

Egypt has signed agreements with three global automobile manufacturers worth around $145 million, Prime Minister Mostafa Madbouli said at the first meeting of the Supreme Council of Automobiles.

Automobiles are the fourth largest commodity in terms of import value, and the move is part of President Abdel Fattah El-Sisi’s directive to increase this, Egypt Today newspaper reported.

The three companies – Nissan, General Motors and French Stellantis Group – will invest over $145 million over the next three years. The companies will deliver an average of 60,000 to 70,000 cars per year, the report said.

Madbouli said a portion of the production will be exported to provide hard currency to the exchequer, in addition to meeting local demand.

He stated that a percentage of these cars will be electric vehicles to help reduce the consumption of fossil fuels and gas.

The deals come as it was reported earlier this month that activity in Egypt’s non-oil private sector contracted for the 26th month in a row, on the back of high inflation and the continued shortage of foreign currency.

The S&P Global Egypt Purchasing Managers’ Index (PMI) slipped to 45.5 in January from 47.2 in December, well below the 50.0 threshold that marks growth in activity.

“The Egyptian non-oil economy suffered a sharp contraction in operating conditions in January, as a depreciation of the pound drove a rapid acceleration in price pressures,” S&P Global said.

S&P Global economist David Owen said “business forecasts for the coming 12 months fell to their third-lowest on record, as firms predict supply and price-related issues to hamper demand further.”