Ghazal: Raising Exports to 35% of GDP Requires Deeper Industrialization and Higher Domestic Value Addition

Reaching a target of raising Egypt’s exports to around 35% of gross domestic product (GDP) will require more than simply increasing overseas sales, according to Eng. Mahmoud Ghazal, member of the Textile Industries Chamber and Chief Executive Officer of Nile Textile Industries.

Ghazal said the target requires a broader transformation in the structure of the Egyptian economy, driven by higher domestic value addition, deeper industrialization, and the development of integrated production and supply chains.

He noted that achieving such a target raises questions that go beyond the overall volume of exports, including the nature of exported products, the share of value added domestically, and the amount of value that ultimately remains within the national economy.

Ghazal pointed to the experience of comparable economies, including Morocco and South Africa, as demonstrating the importance of strengthening export structures and increasing their contribution to GDP. The comparison, he said, is not limited to headline figures, but highlights the importance of moving toward more diversified exports with greater value addition.

Developing Egypt’s Export Structure

Ghazal said expanding exports remains a key economic priority for Egypt, but emphasized that improving the structure of exports is equally important.

Economies that have achieved significant growth in international trade have generally focused on developing manufacturing and industrial sectors, while increasing the share of higher-value products and goods with greater technological content, he explained.

Egypt has strong fundamentals that can support a significant expansion of its export capacity, including a diversified industrial base, a strategic geographic location, a network of trade agreements, a large domestic market, and an established pool of industrial skills and labor.

The next phase, he stressed, should place greater emphasis on deepening local manufacturing capabilities and increasing domestic content, which would strengthen the competitiveness of Egyptian products in global markets.

Textiles and Apparel: A Model for Deeper Industrialization

Ghazal described the textiles, home textiles and ready-made garments sector as a clear example of the importance of deeper industrialization and higher value addition.

Developing exports in the sector, he said, should go beyond increasing shipments of finished products and focus instead on building integrated production chains — from fibers and yarns through weaving, dyeing, printing and finishing, all the way to the final product.

Localizing more stages of production in Egypt would increase the share of value retained within the domestic economy while strengthening the competitiveness of Egyptian manufacturers in international markets.

Egypt also has a long industrial history and accumulated expertise in textiles, as well as the competitive advantage of Egyptian cotton. These assets provide a strong foundation for developing the sector through investment in technology, productivity, design and innovation.

Ghazal also highlighted opportunities in technical textiles, sustainable products, advanced printing and finishing technologies, and other higher-value segments.

He stressed the importance of raising the ambitions of Egypt’s textile industry — not only to protect existing markets, but also to target textile and apparel exports of $20 billion and increase Egypt’s share of the global market, while simultaneously raising local content and strengthening domestic supply chains.

FDI as a Driver of Export Growth

Ghazal said attracting greater volumes of foreign direct investment (FDI) directed toward manufacturing and export-oriented industries will be another key element in achieving a significant increase in Egypt’s exports.

The value of foreign investment, he explained, extends beyond financing. It can bring technology and management expertise, improve production methods, connect Egyptian companies and factories with global supply chains, and help open new international markets for products manufactured in Egypt.

He called for a greater share of investment to be directed toward sectors capable of creating new production capacity and supporting exports.

The presence of global companies in Egypt can also create opportunities for local suppliers, raise quality and productivity standards, and facilitate the transfer of knowledge and expertise to domestic industries.

Trade Deficits Highlight Opportunities for Local Manufacturing

Regarding Egypt’s trade deficit, Ghazal said analyzing the structure of imports can help identify industrial gaps that could be addressed by expanding domestic production and localizing a greater share of value chains.

Sectors such as machinery and equipment, automobiles and pharmaceuticals, among other industrial products, represent areas that warrant greater consideration from the perspective of domestic manufacturing opportunities, he said, while stressing that not every item contributing to the trade deficit necessarily represents a viable investment opportunity.

The key question, Ghazal explained, should be which sectors can enable Egypt to create genuine industrial value.

Addressing selected import gaps through domestic production, technology and investment could help reduce reliance on imports while simultaneously building production capabilities that can eventually be directed toward export markets.

Higher Value Addition as the Foundation for Export-Led Growth

Ghazal concluded that industry extends far beyond the factory or the final product. It represents an integrated ecosystem encompassing raw materials and components, technology, services and supply chains, through to finished products and international markets.

“Reaching a 35% contribution of exports to GDP will not be achieved simply by selling larger volumes abroad,” Ghazal said. “It requires producing more locally, increasing value addition, attracting export-oriented productive investment, and building Egyptian production chains that are increasingly capable of competing in global markets.”