Minister of Industry and Foreign Trade Mounir Fakhry Abdel Nour has entered negotiations with the Eurasian Union to sign a free-trade agreement, he said.
The agreement would see the market open up to as many as 400 million consumers with considerable purchasing power.
Abdel Nour added that the challenge now is to attract large producers and automobile manufacturers.
The announcement came during the opening session of the annual Egypt Automotive summit, organised by the Business News Foundation for Press and Publication. The summit was entitled “The future and investment opportunities of automotives and feeder industries.”
Abdel Nour said that meetings will be held with automobile manufacturers in Egypt over the next months, to understand the incentives required for the local market and exports.
He said the government is serious in providing manufacturers with incentives, pointing out that challenging the massive amount of imports on the market will not take place without increasing production and exports through investment and marketing incentives.
He called on auto manufacturers to arrive at the required solutions to advance the industry, stressing that the government will take their demands into consideration.
Abdel Nour told Daily News Egypt that during a visit to China, an agreement was made to build an energy station, and to strengthen the existing electrical grid.
He added that an initial agreement was signed in the field of transport, noting that the Chinese government made an offer to finance and implement the 10th of Ramadan City train for $1.5bn.
He noted that these agreements pave the way for President Abdel Fattah Al-Sisi’s visit to China the end of this month.
Investment Minister Ashraf Salman said that the economic reform programme will address the country’s deficit by cutting costs and increasing revenues through levying new taxes. It will also include downsizing subsidisation, especially for fuels, which are estimated at EGP 145bn in the budget.
He added that the government hopes to reach an 8% deficit for total local production after the end of this year. He said that it will be a struggle to end the year with just a 10% deficit, which is equal to EGP 240bn. As for investments, there are efforts to avoid the risks associated with an economic downturn.
Salman said the government is aiming to achieve 4% growth, with investments worth EGP 334bn, and foreign investments worth nearly $10bn.
Salman added that in the near future the private sector will be leading development efforts and unemployment reduction, which currently stands at 13.5%. He said the basic structure of legislation is being reviewed to improve the business environment, reduce unemployment to 9%, increase investments to EGP 600bn during the upcoming years, and obtain foreign direct investments worth $15bn.
Current investments in the automotive sector are worth only $2bn.
The auto industry is seeing an annual growth of nearly 20%, making it likely that the sector will contribute 0.5% to the target growth rate, according to Salman.
He added that automakers have approximately 15,000 engineers, explaining that the auto industry is witnessing remarkable growth that accommodates more labour and reduces unemployment.
He went on to explain that he is waiting for the results of consultations and meetings with automakers which will promote the industry and its development. These efforts will bring the industry toward a fierce battle, both locally and internationally.
“I call on automakers to submit proposals to advance the industry and present the incentives required for automobile manufacturing,” said Salman, asserting that applying reform programme is a matter of life and death which he will not give up on.