Daily News Egypt interviewed vice chairperson of the Chamber of Engineering Industries Abdel Moneim El-Kady about of investment opportunities in the automotive industry on the occasion of the third annual Egypt Automotive Summit.
What are the main points that you would like discussed at the summit?
The importance of the automotive industry and the role of the feeding industries in Egypt’s economic development are the points that should be discussed during the third Egypt Automotive Summit.
Everyone knows that the automotive industry is the mother of industries, as its feeding sectors include many high-tech industries. However, it is distinguished by its massive production. The industry provides a great opportunity to generate foreign currency and resolve unemployment problems due to its dense operations.
How do you evaluate the Egypt Automotive Summit?
The Egypt Automotive Summit is a great annual opportunity for exchanging ideas and points of view about the development of the sector, which directly affects the state’s economy.
What are the main demands from the summit in the presence of the concerned government representatives?
The main demand that must be addressed during the conference is the implementation of the automotive industry strategy, after it has been delayed for more than six years.
The automotive sector is negatively impacted by the absence of the government’s vision, which opened the door for other countries in the region to become a destination for the investments of global automotive companies.
What are the major challenges facing the automotive sector right now?
I think that the major challenges facing the sector are the foreign currency shortage and the instability of the US dollar exchange rate, which affects manufacturers and merchants.
The industry is stalled due to the lack of raw materials and imported spare parts, and trade is stalled due to the instability in prices. That is the biggest challenge facing the sector.
What do you think about investment opportunities in the Suez Canal Economic Zone and the growth of the feeding industries?
I believe that the best investment in the region should be in the feeding industries. Specialised international companies in the feeding industries should be invited to set up factories in the region given its logistical advantage and mediating position between three continents—Europe, Asia, and Africa. Additionally, companies could benefit from agreements, such as the COMESA and other Arab trade agreements, which facilitate exporting at competitive prices, and support a promising automotive industry in the country.
How do you evaluate the tax and customs systems, and its impact on the automotive and feeding industries sector?
The automotive industry strategy, which will come to light soon, provides many solutions for the tax and customs systems in the automotive sector. For example, in accordance with the European Partnership Agreement, customs tariffs on European cars will amount to zero by 2019, which is very unfair to Japanese and Korean cars. The strategy will sort all these distortions out.
What do you think about the CBE’s recent decision regarding the liberalisation of the Egyptian pound?
I believe that the Central Bank of Egypt’s (CBE) decision has positive sides, especially regarding the availability of foreign currency in banks, especially the US dollar, which allows banks to open documentary credits, which has solved a lot of problems. The Egyptian Tax Authority, for example, did not consider the US dollar price in the unofficial market, and charged importers at the official price.
I think that we cannot judge the decision’s impact on costs and investment before three months, until things settle down.