The recent devaluation of the Egyptian pound should lead to an increase of foreign investors. However, the immediate aftermath of these changes comes down to rising costs for importers, exporters and consumers alike.According to Chairman Mohsen El Betagy of Horticultural Export Improvement Association (HEIA), the decision by the government for devaluation was long overdue. “This step should have been taken two to three years ago. Now we need to wait for stability and for both tourism and foreign investors to come to Egypt. If you manage to run a business in the coming economic trends, everything will run well. If this increase in business doesn’t happen, it will be a disaster,” says El Betagy.
"Everything has gotten more expensive. It’s hard for everyone. Our costs risen for everything, from labor costs to the costs of plastic sheets we use when growing grapes. But these current developments are necessary for economical progress.”
Egyptian importers can mitigate any rise in costs by increasing the price of their products. Egyptian exporters however aren’t able to do so, as they need to compete on foreign markets. "No one is prepared to wait for payments. Everybody wants their money immediately.”
The low currency rate of the euro is a concern as well. Egyptian banks have increased their interest rate to stimulate Egyptian civilians to add to their saving accounts. However, a higher interest rate also means it has gotten more expensive for companies to secure loans for investment.
“We’re waiting for the Egyptian government to attract foreign investors. And also to have a good law where investors will feel protected with their money and they will be able to return their money to their country. This is very important.”
In spite of the current situation, El Betagy remains positive about Egypt’s economic future. “The decision made for the economy by the government took a lot of courage because now the people are suffering. And this decision should have been made 30 – 40 years ago. This was a brave decision and we must accept it. Big changes will happen.”
Furthermore, HEIA is planning to be the body providing certifications like Global GAP. “The organization will have a meeting in December. We are now searching for the right steps on how to do this. And we will not start anything unless everything is correct and in order," ended El Betagy.
For more information:
Mohsen El-Betagy
Horticultural Export Improvement Association (HEIA)
Tel: 00202-3837-1122
Email: info@heia.org.eg