A recent study commissioned by Economist Impact and sponsored by DP World has illuminated the prospects of Egyptian businesses for the year 2024. Despite the challenges encountered in 2023 and apprehensions regarding geopolitical events impacting the economy, Egyptian companies are expressing optimism for the forthcoming year.
The fourth Trade in Transition report has unveiled a notable surge in the embracement of technology and adaptable trade strategies by businesses in Egypt. This report draws from perspectives offered by global trade experts and senior executives, including those from Egypt.
In the face of escalating inflation, interest rates, and market downturns, Egyptian companies are re-evaluating risks through “friendshoring.” This approach involves forging alliances with suppliers from economically and politically similar countries, exploring new markets for export growth, and implementing dual-sourcing strategies.
As per the survey, 28% of Egyptian executives are aiming to harness technology to enhance supply chain efficiency and agility in the context of future global trade. It is apparent that technology also plays a pivotal role in fostering business optimism.
Moreover, almost half of the executives (48%) have acknowledged that their firms utilized AI in 2023 to revolutionize supply chain operations, with an additional 20% intending to adopt it in 2024. Alongside AI, businesses are also delving into advanced automation (33%) and blockchain (28%) to improve traceability, security, and data protection.
Consolidation ranks as a top priority for Egyptian businesses as they strive to minimize supply disruptions. They are grappling with the challenge of finding equilibrium between diversification and control, as well as risk management. The survey indicates that 34% of businesses are embracing friendshoring to shape trade and supply chain operations, while 31% are establishing parallel supply chains for different markets. Furthermore, about a third of companies are opting for fewer suppliers.
As Egypt’s economy expands into new sectors and establishes itself as a manufacturing hub in Africa, 28% of executives believe that market expansion is the linchpin for export growth. Europe (37%) and North America (34%) are projected to significantly bolster export revenue in 2024. Additionally, technological advancements (35%) are anticipated to elevate output levels and import values.
Although business leaders are cautiously optimistic, they are contending with substantial challenges in both export and import activities. These challenges encompass transportation costs, input shortages, rising inflation, economic volatility, tariff uncertainties, and political instability in pivotal markets.
Rizwan Soomar, CEO & Managing Director of DP World for North Africa & the Indian Subcontinent, has voiced his endorsement for the positive outlook of Egyptian executives. He has indicated that DP World is aligned with the initiatives of Egyptian businesses in fortifying their supply chains with technology and exploring new growth markets. At the Port of Ain Sokhna, technology has led to enhanced truck turnaround times and vessel productivity. Additionally, DP World has introduced multi-channel payment solutions and customer self-service applications for real-time data access, enhancing cargo control and visibility.
In conclusion, this study has yielded valuable insights into the escalating integration of technology and agile trade strategies in the Egyptian business landscape as companies brace themselves for the opportunities and challenges that lie ahead in 2024.
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