Suggested plan for attracting EGP10bln in investments for 30 industrial areas

Minister of Supply to Amwal Al-Ghad

‘Social justice is the main key for economic growth … we are dedicated to continuing the control of the markets.’

Mohamed Abou Shady, Minister of Supply and Internal Trade, was speaking about a plan to attract investments worth 10 billion pounds in the upcoming five years through the construction of 30 new industrial areas and providing land for entrepreneurs and the construction of 2000 shops, 10 malls, and supermarket chains.

The Minister, in an exclusive interview with Amwal Al-Ghad, states that the upcoming period will witness a number of new policies concerning the sector of commerce to enable this sector to participate in the government’s reforming plans. He confirms that the government is almost done with the selection of a board of directors to manage the growth of internal trade and to attract investments. This proposed plan is open for amendment, since it will be revised again after the approval of the Council of Ministers on the formation of a board of directors.

He explained that the Ministry’s policies depend to a great extent on the presence of social justice, which is one of the main foundations for the fulfillment of economic growth and the implementation of the principle of consumer sovereignty. This principle assures market control and resistance to attempts to exploit consumers such as pumping the market, monopoly in all public production sectors, particularly in steel, cement and foodstuffs.

Abou Shady continued that the reformation of Egypt’s agricultural policies is essential for decreasing prices and for the decrease of the gap between supply and demand, import rates of foodstuffs that account to more than 50% annually, which are very costly to the nation and leave the market largely dependent on the private sector’s imports. This leaves the private businesses the main controller of the market, having complete control over their decisions and policies.

The government has new plans for the construction of new silos for storing wheat. The minister states that 10 silos will be constructed; these silos will be able to store about 300 tons of wheat, with investments worth 800 million pounds. The second phase of the national project includes the construction of 50 metal silos throughout the nation.

Abou Shady adds that each of the silos, due to be constructed, can hold 30 thousand tonnes of wheat and that the production cost of each will be around 80 million pounds. Geographical locations have been taken into consideration in order to ensure that silos are built in all of the nation’s governorates.

Concerning the strategic stock of wheat, the Minister stated that the government is aiming to increase Egypt’s wheat stock from 1.5 million tonnes to 6.5 million tonnes by the end of the fiscal year 2013 – 2014, stating that the stock available is enough to sustain the country until February 2014.

The minister emphasized the importance of the government employing aid to the sectors worthy of it, stressing the government’s efforts to convert the support for rationed goods and strategic goods from in-kind to cash support, while assuring consumers’ rights to high quality goods and services.

The strategic goods are due to be distributed to supermarkets and grocery stores by the end of the year 2013. The aim of this distribution is to give citizens their full right to have options of foodstuffs to select from in the supermarkets as part of the government’s efforts to achieve social justice.

Abou Shady referred to the creation of a smart card for rationed goods, bread, and petroleum products, which will enable  the monitoring of the distribution of subsidized commodities.

Current studies are being carried out by the Ministers of Administrative Development and of Telecommunications in order to find a suitable firm that will produce the smart card, expecting its launch by the beginning of  2014.

Strategic pricing is the key to market control and to facing increasing prices; therefore the government is keen on adopting strategic pricing techniques. These techniques will be adopted specifically for fruit and vegetables without harming the consumer, especially given that the profit on these good is 25%. This will ensure that the consumer receives high quality products with good prices.

Abou Shady stated that the government has confirmed the availability of petroleum products, ensuring that there will be no shortages until the end of 2014. This availability is due to the presence of materials needed by the Ministry of Petroleum and the provision of petroleum products from other Arab states.

He concluded by speaking about the necessity of the collaboration of the Food Industries Holding Company and the two wholesale companies with the Ministry of Supply and Internal Trade. This will be beneficial because it would tighten the ministry’s control over the system of distribution of subsidized goods and to ensure the quality of these goods before they are distributed to citizens. He points out that he has made a request to the Council of Ministers on the collaboration of the company and that the request is currently being considered.