A number of Egyptian companies established under the new investment law are leaning towards labor-intensive markets, but capital is flowing heavily into less operational undertakings, revealed recently published government data.
The fiscal annual report for 2017-2018 said newly established companies, which amount to 6,329, belong to the industrial sector.
With 28,400 jobs created, the report concluded that the industrial sector was the most capable of generating jobs.
Coming in second, a total of 1,213 construction companies provided 2,239 jobs, followed by the agricultural sector with 1,193 companies providing 4,946 jobs, and finally the service sector with 1,027 companies giving out 2,883 jobs.
However, service companies ranked first in attracting investment capital.
The investment law issued in October 2017 provides several incentives to attract investments to advance development and invigorate the Egyptian economy.
Updated regulations encourage investments operating in areas most in need of development.
Unemployment rates in Egypt have fallen in recent months, but remain close to 10%, falling in the second quarter to 9.9% from 10.6% in the first quarter of 2018.
Unemployment in Egypt has worsened since 2011, rising from 8.9% in the fourth quarter of 2010 to 11.9 in the first quarter of 2011, but recent economic growth rates have helped in its reduction.
Egypt’s gross domestic product grew by 5.3 percent in the 2017-18 fiscal year ending in June, the highest rate in 10 years, Planning Minister Hala al-Saeed said in July, in a further sign of recovery amid tough reforms and an IMF loan.
The country has been showing signs of recovery in recent months amid tough reforms including cuts to energy subsidies implemented by the government of President Abdel Fattah al-Sisi as part of a $12 billion IMF loan agreement aimed at luring back foreign investments.
In the cumulative estimate, from 1970 to 2018, the services sector was the repeatedly the most attractive for investment in terms of the number of companies.
The report reflects the dominance of small and medium enterprises in Egypt’s economic activity.
