weighted score 4.4 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Egypt
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Egypt as a sourcing destination.
Labour cost competitiveness
6
Large labour pool (105M population) with competitive wages in USD terms following Egyptian pound depreciation. Labour costs below Eastern Europe and comparable to South-East Asian alternatives for many categories.
Supply base depth
4
Established base in textiles, chemicals, food processing, and building materials. Supply chain depth is moderate — most sectors lack the multi-tier supplier ecosystems found in China or Turkey.
Logistics & infrastructure
5
Strategic Suez Canal location provides unique transhipment advantage. Port infrastructure improving but not yet at top-tier levels. Domestic logistics network adequate but road and rail connections to industrial zones need further investment.
Workforce skills
4
Large engineering graduate pool and established vocational training in textiles and construction. English and French language proficiency varies. Technical skills in advanced manufacturing categories are developing but limited compared to Turkey or Eastern Europe.
Scalability
5
SCZone and other industrial zones provide greenfield capacity for scaling. Population size supports labour-intensive production growth. However, infrastructure constraints and bureaucratic complexity limit the speed of capacity expansion.
Ease of doing business
3
Bureaucratic complexity remains high despite reform efforts. Military-linked enterprises operate in many sectors, creating uneven competitive dynamics. Foreign ownership rules have been liberalised but enforcement and regulatory predictability remain concerns.
Trade access & tariffs
3
EU-Egypt Association Agreement and QIZ protocol provide preferential access to EU and US markets respectively. However, rules of origin compliance adds complexity, and Egypt lacks the breadth of FTA coverage of competitors like Turkey or Vietnam.
Sustainability baseline
3
Renewable energy investment growing (Benban solar park among world's largest). But energy mix remains heavily fossil-dependent. Factory-level ESG compliance and reporting are at an early stage compared to EU expectations.
Innovation & IP
7
Growing Cairo technology startup ecosystem. Large engineering graduate output. Patent activity low by global standards but increasing. R&D spending as a share of GDP remains below OECD average but government investment in tech hubs is accelerating.
Quality standards
4
ISO certification penetration is moderate. Textiles and food processing sectors have established quality management in export-oriented factories. Wider manufacturing base shows variable quality standards; buyer-commissioned audits recommended.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Population & labour pool
- Egypt has a population of approximately 105 million — the largest in the MENA region. A young demographic profile (median age ~24) provides a large and growing labour pool for manufacturing and services.
- Currency competitiveness
- The Egyptian pound has depreciated significantly since 2022, improving cost competitiveness for export-oriented manufacturing. Labour costs in USD terms are now substantially below pre-devaluation levels, making Egypt more attractive for labour-intensive production.
- Key manufacturing sectors
- Textiles and garments, chemicals and fertilisers, food processing, and building materials are the primary manufacturing sectors. The Suez Canal Economic Zone (SCZone) is being developed as an industrial and logistics hub targeting export-oriented manufacturing.
Supply Base & Infrastructure
Supply Base & Infrastructure
- Strategic location
- Egypt sits at the crossroads of Africa, Asia, and Europe. The Suez Canal handles approximately 12% of global trade by volume, giving Egypt a unique logistics position for re-export and transhipment operations.
- Suez Canal Economic Zone
- The SCZone spans 461 km² across four development areas along the Canal. It offers streamlined customs, tax incentives, and direct port access. Targeted sectors include textiles, automotive components, petrochemicals, and food processing.
- Port infrastructure
- Port Said East, Ain Sokhna, and Alexandria are the primary container ports. Infrastructure investment has expanded capacity, though throughput and efficiency remain below top-tier Asian and European benchmarks.
Trade Access & Innovation
Trade Access & Innovation
- EU-Egypt Association Agreement
- The EU-Egypt Association Agreement provides preferential tariff access to the EU market. Rules of origin requirements apply. Egypt also benefits from bilateral agreements with EFTA, Turkey, and several African and Arab states.
- QIZ protocol
- Qualifying Industrial Zones (QIZ) allow Egyptian manufacturers to export to the US duty-free, provided products contain a minimum Israeli input component. QIZ factories are concentrated in textiles and garments.
- Innovation base
- Egypt's R&D spending as a percentage of GDP remains low compared to OECD peers. However, a growing technology startup ecosystem in Cairo and a large engineering graduate pool provide a foundation for incremental innovation capacity.