Egypt’s Major Industries – Economic Activities
Egypt’s major industries have changed drastically, thanks to an economic transformation. Access to services, energy, and water spurred economic activities in Egypt. There are as many threads to this economic tapestry as an Egyptian cotton sheet.
To get to grips with it, we jump into Egypt’s industrialization and look into its industries based on its natural resources and service sector.
What are the major industries in Egypt?
Egypt’s primary industries today are a mixture of ancient industries and new contenders.
Gas, oil, and tourists have transformed the Egyptian economy.
Agriculture is essential but diminished.
Cotton is on the scene but lacks a starring role.
Egypt’s Major Exports: From Ancient History
Economic change has been gradual, but it has also been tremendous. The fortunes of Egypt revolved around agriculture and the goods that came from it. Egyptian fruits shared their billing with flax before cotton arrived in Egypt. Long before the Suez Canal, Egypt was a popular trading stop among travelers and traders.
In 30 B.C., Egypt became a Roman province, and trade centered on providing goods to Rome. In the 11th-century, records show flax and linen were the most sought-after commodities. By 1820, the country saw the long fiber ‘Egyptian’ cotton introduced and monoculture spread. The only constant for the Egyptian economy was the Nile at its heart.
In the early 20th century, Egypt’s core industries were still agricultural. Egypt was the leading exporter of dates and sold figs, aubergines, citrus fruit, and onions. Cotton was grown widely. Dates and cotton are typical, traditional examples of Egypt’s major exports.
Post-independence Industry
The new regime in 1952 wanted to industrialize Egypt. They made large public investments in heavy industries. These include investments in steel, mechanized textile production, and mineral extraction that attracted funding. The plan started well, but progress stalled by the 1960s. Progress was sluggish until the government encouraged foreign investment in the mid-1970s.
Industrialization took time but eventually happened. It saw natural gas, steel, petrochemical products, and clothes to be the country’s major exports even to this day. The Egyptian economy today balances a mix of goods and services.
By 2011, modernization stalled after a regime change, and recovery is still underway. The current government is borrowing money for infrastructure projects, but international observers remain unconvinced these projects will deliver long-term industrial improvements. On that front, time will tell.
What natural resources does Egypt have?
Ancient Egypt’s wealth all stemmed from the Nile. The river valley would flood, and the floods were useful and regular. An agricultural surplus allowed them to build a great civilization. They would trade for commodities and minerals to prosper further.
In ancient times, simple surface irrigation was crucial to farmers’ success. Widespread irrigation is still a prime example of industrialization in Egypt. Land can provide up to three crops per year, but water access is stretched. Depleted aquifers and inflowing seawater threaten crops like citrus fruit.
Modern Egypt is no longer a breadbasket, but there is some compensation. Natural gas and crude oil hide below ground, and they now make a useful contribution to Egypt’s energy needs. Gold mining in the Egyptian desert also has valuable potential for the Egyptian economy. Green energy also offers hope.
How have resources changed over time?
Gold mining in Ancient Egypt was restricted to prospecting around veins of quartz. Gold was available, but it’s not common. Modern surveying techniques made the Central Eastern Desert interesting to gold mining companies. Now that the world needs gold for mobile phones and computers, it is even more valuable.
At the end of the 20th century, Egypt discovered natural gas reserves. Their value is immense and made the third-largest producer of natural gas in Africa. As a country, Egypt is self-sufficient in natural gas. Oil production is also significant, but it doesn’t make the country self-sufficient. The state is very involved in the energy sector, but foreign direct investments also play a part.
Unpolluted water has become an issue for Egypt’s farmers. Ethiopia recently established a dam on a tributary of the Nile, and climate change is biting. The changes could desiccate large tracts of farmland. A water crisis is a possibility, and instability is a danger. Suffering local populations risk a vicious cycle of conflict and reduced investment.
What do natural resources mean for the industry?
In Egypt, economic activities are almost as crucial as imports and exports. The energy sector generates employment in areas that traditionally had no financial impact. Unemployment is a major national problem, and more industry means more jobs. Natural gas and gold also can be profitable for Egypt in the long term, but agriculture may not have such deliver the same returns.
The Egyptian economy is more dependent on energy than agriculture for GDP. Agriculture brings in less than energy or minerals. This is a compromise to stability because agriculture is a larger employer. Large scale job losses are possible and dangerous.
Egypt’s natural resources form a buffer against international market whims. They have some minerals and energy sources at home, and they only trade for part of their needs. On the other hand, water poverty could easily cause problems for their population and agriculture.
Egypt Economic Activities: Are heavy industries critical to the Egyptian economy?
Industry accounts for approximately one-third of Egyptian GDP. Some of the most critical products of Egypt come from heavy industries. Textiles, steel, fertilizers, and clothing all feature in the export market.
Ready-made clothing is one of Egypt’s major exports, with Europe as its primary importer, straight across the Mediterranean Sea. The country is perfectly positioned as an industrial clothing supplier to Europe. Cotton production is local, but labor costs are lower than in Europe, and shipping is quick.
The textile industry at large is one of Egypt’s major industries. The manufacturing process has evolved with Egypt at the forefront. Spinning cotton, mechanical knitting, and weaving are all important economic activities. The industry employs millions of Egyptians at all skill levels.
What about the service sector?
In modern Egypt, imports and exports are not always physical. The service sector is a varied assortment of Egypt’s main economic activities. Profitable examples in the service sector include tourism, banking, insurance, and communications, which play an essential part. State ownership also affects the running of banking and communications in Egypt.
What impact do services have?
In 2019, travel and tourism brought around 11% of Egypt’s GDP and employed approximately 9% of Egypt’s workers. In Egypt, economic activities that increase employment are beneficial. Tourism has been recovering since the regime change in 2011. The only exception has been during the Covid-19 crisis.
However, “historical or cultural tourism” was extremely limited. Poor transport options and the expense of travel kept it exclusive. Tourism was not a viable industry until the last years of the 20th century, so tourism benefits are new. Resorts like Sharm el-Sheikh and Hurghada are highly profitable. Projections expect them to bounce back once restrictions ease.
In Egypt, economic activities like banking and insurance trading are semi-commercialized. On the one hand, they are a regional center for finance. They are relatively stable despite sweeping economic reforms. But on the other hand, Egypt’s active participation in the global banking system is recent because its banks’ massive chunk remains state-owned. Foreign property speculation is also limited, while property investments in desert areas are also regulated for foreign investors.
Industrialization in Egypt: What is its future?
Egypt is facing an environmental sticking point because of water shortages. The environmental conditions are a mixed blessing, and the burning sun has its uses. There are parts of the desert where solar farms could collect massive amounts of energy. Investors have made inquiries, and there is even scope for wind power off the northern coast.
At the moment, Egypt’s energy is heavily sourced from petroleum products. With some infrastructure spending on infrastructure, Egypt could reduce that significantly. That would create skilled jobs and reduce reliance on international partners for energy. It could even aim at a surplus.
Currently, the communications market in Egypt is restricted. Telecom Egypt has a monopoly on fixed phone lines. By contrast, citizens are taking up mobile technology and internet connectivity readily. As a central point for regional communications, Egypt has room to grow in the communications sector.
How does the industrial landscape affect Egypt’s citizens?
Egypt’s GDP per capita is modest. Egypt is in the top 50 countries for GDP but does not make it into the top 100 for GDP per capita. It goes some way to explaining that Egypt’s population is large and growing exponentially. A mass unemployment crisis is ongoing, and the cost of living has increased since 2011. Egypt’s citizens will be hoping for growth in sectors that generate employment.
Summary
Egypt‘s primary industries include:
Natural Gas
Crude oil extraction
Textile production
Tourism
Gold mining.
Egypt is a developing economy with a dominant services sector that has outstripped agriculture significantly. The industrial sector is also being outflanked. To achieve stability, the services sector in Egypt will need to be innovative to create more jobs. The country still has many things to accomplish and requires ingenuity to achieve all its economic targets.
