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What do you need to know about Egypt’s Islamic economy before investing in it?
Photo: A general view of a street in downtown Cairo, Egypt March 9, 2017. Picture taken March 9, 2017. REUTERS/Mohamed Abd El Ghany
A new law in Egypt is expected to boost badly needed investment by cutting bureaucracy, especially for starting projects, and providing more incentives to investors looking to put money into the country, Reuters reported on Jun 17.
What do you need to know about Egypt's Islamic economy before investing?
1. Egypt's Islamic economy is strongest in the halal pharmaceuticals and cosmetics sector, in which it ranks fourth on Thomson Reuters' Global Islamic Economy Index (GIEI) 2016-17.
2. Egypt is the fourth largest Muslim consumer food expenditure market, estimated at $77.5 billion in 2015, behind only Indonesia, Turkey, and Pakistan.
3. By its sheer population size, Egypt is also a top 10 Muslim consumer market for clothing, and media and recreation expenditure. In 2015, Egyptians spent an estimated $10.88 billion on clothing, and $6.1 billion on media and recreation.
4. In Islamic finance, Egypt held an estimated $14.28 billion in assets in 2015, according to a Thomson Reuters report. The lion's share of these assets--$13.79 billion--are held in Islamic banks. Faisal Islamic Bank of Egypt is the country's biggest Shariah-compliant financial instituion, holding an estimated $7 billion assets in 2015, according to the same report.
(Read our Egypt country profile here.)
Here are recent developments to bring you up to speed with Egypt's relevant sectors for the Islamic economy:
|Food, pharmaceuticals and cosmetics|
An Egyptian worker works at a local chocolate factory in Cairo, Egypt, February 5, 2017. Picture taken February 5, 2017. REUTERS/Mohamed Abd El Ghany
Egypt's Trade Ministry has issued tough new regulations on importers by sharply raising the minimum capital they need to operate, the government's latest effort to curb foreign-made goods and spur local manufacturing.
Belarus has plans to build a 1,000-head commercial dairy farm in Egypt, Aleksei Bogdanov, the head of the main division for foreign economic affairs at the Agriculture and Food Ministry of Belarus, said on 25 May.
For Egyptians Ramadan this year comes as the country roils from rampant food inflation and a debased currency that could make the holy month all the tougher. Today, food costs 40 percent more than it did a year ago after local manufacturers, which source most of their ingredients abroad, raised prices following a collapse in the value of the Egyptian pound.
Agricultural product and processed food exports from Egypt fetch approximately $4.9 billion, with sales going to 130 different countries. The plan is to double revenue within five to eight years.
The Egyptian pound's flotation and an ensuing increase in tariffs on more than 300 products shipped from abroad have hit importers hard, but have been a boon for domestic manufacturers.
In Jan, Egypt's military received the license required to form a pharmaceutical company.
Central Bank of Egypt's headquarters is seen in downtown Cairo, Egypt, June 7, 2017. REUTERS/Mohamed Abd El Ghany
Egypt expects to raise 5-7 billion Egyptian pounds ($276-$387 million) through initial public offerings (IPO) of state-owned companies during the 2017-2018 fiscal year beginning in July.
Egypt should make it easier to do business and try harder to attract direct investment if it is to make progress towards economic recovery after passing its first review from the International Monetary Fund, said economists in May.
Egypt plans to raise exports to $34 billion from $19 billion by 2020, the Trade and Industry Ministry said in March.
In March, the World Bank disbursed another $1 billion in financial assistance to Egypt out of its $3 billion loan program with the country.
Egypt could issue a U.S. dollar sukuk later this year after its planned conventional bond, government representatives said in January.
|Travel and Tourism|
A man takes a photograph of objects that were found inside a burial site in Minya, Egypt May 13, 2017. REUTERS/Mohamed Abd El Ghany
Roughly 660,000 foreign travelers visited the country in March according to figures released by the Egyptian state-run statistics agency.
In May, Egypt unearthed an ancient burial site replete with at least 17 mummies, most fully intact, the latest in a string of discoveries that the country's antiquities minister described as a helping hand from the crypt for its struggling tourism sector.
A series of major discoveries of ancient relics in Egypt is boosting the country's image and reviving the interest of foreign travelers, its tourism minister said in April.
Police officers and people gather in front of the damaged Museum of Islamic Art building, after a bomb blast occurred at the nearby Cairo Security Directorate, which includes police and state security, in downtown Cairo, January 24, 2014. REUTERS/Amr Abdallah Dalsh
Though no precise figures on readership are available, Egypt enjoys an active private media that includes widely read print and web format publications as well as popular late-night talk shows. State newspapers still maintain wide circulation. The spike in censorship has come as a surprise, even to journalists long-accustomed to reporting within strict red lines in Egypt where direct criticism of the military, the president, and judiciary are considered taboo and punishable by jail time. The government has offered no comment on the reason behind the blockages
Egypt's most famous export, the silky soft cotton prized by makers of luxury bedding and clothing, has become so scarce as production has fallen that most supplies sold under its brand name last year were fake. But a surge in local cotton prices, and a crackdown on ersatz Egyptian cotton worldwide, are reviving interest in cultivating the long-neglected crop.
Egypt's Museum of Islamic Art in downtown Cairo reopened in January after restoration and repairs following damages it sustained in January 2014 when a car bomb exploded outside an adjacent building.
Egypt’s educational woes spurred a group of entrepreneurs in 2012 to develop a platform to supplement the poor quality of school education. Today, Nafham receives more than 600,000 visitors monthly and also includes the curricula from Saudi Arabia, Syria, Kuwait and Algeria.
(Compiled by Emmy Abdul Alim)
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