Egypt’s businesses are more optimistic about their future than they were a year ago and their expectations for sales growth are the strongest in the Middle East, a new HSBC report reveals.
HSBC’s latest survey ‘Navigator: Now, next and how for business’ over 9,100 companies in 35 countries and territories finds that 64% of businesses in Egypt are more optimistic now than they were this time last year.
According to the report, 88% of surveyed respondents expect their sales to rise over the next 12 months, making Egypt’s businesses the most optimistic compared to other surveyed countries in the Middle East, for example, the UAE, Turkey, and Saudi Arabia. Two in five Egyptian businesses expect to grow by 15% or more, compared to only a quarter globally and one third in the Middle East.
HSBC’s Country Head of Commercial Banking in Egypt Richard Lelong said “As Egypt’s economy continues to gather strength, businesses in Egypt are becoming more confident about growth. Although short-term pain associated with economic reforms has undoubtedly been challenging, the underlying strength they are intended to deliver to the country should provide a firm foundation for future growth and business dynamism. The country is also becoming much more business friendly, with new investment and licensing laws boosting domestic and foreign business activity. All these factors are driving business optimism for future growth.”
The survey finds that 87% of Egypt’s businesses expect international trade growth – consistent with the rest of the Middle East. This is driven by the desire to enter new markets ahead of competitors, and proven customer demand. Eight out of 10 see international trade as a force for good, saying that it will drive innovation, improve efficiency, and provide new business opportunities.
Although three quarters of Egypt’s businesses surveyed say protectionism is increasing in their key markets, most believe there is more to gain than to lose. Strategies being deployed to cope include increasing capital reserves (36%) and reducing borrowing (29%).
The Navigator survey also shows that Egypt’s businesses are under pressure from competitors, investors, and governments alike to become more sustainable over the next five years. In response, firms are expecting to invest more in energy efficiency, technology, innovation, infrastructure, and workplace diversity and equality. However, they are planning to get more insights and information around implementing these practices.
HSBC Egypt’s Country Head of Global Trade and Receivable Finance Chaker Zeraiki said, “Egypt’s ideal location, being a global gateway and the connection point for business across Africa and the Middle East, meaning that companies here will always have the flexibility they need to future-proof their growth.”
“We also expect technology, digitisation and data to play an increasingly important strategic role enabling businesses to develop their products and services, reach new customers, and cut costs by improving operational efficiency,” he added.
Zeraiki elaborated that through looking at the most important trade routes to business in Egypt, 59% view the Middle East region as their top trading partner, a trend that was seen this time last year
“However, we are also seeing Europe, North America, and mainland China grow in importance as well, which proves Egypt’s businesses are keen to be agile as they assess new opportunities across other key trade corridors,” Zeraiki added.