With the third annual Egypt Automotive Summit scheduled to take place on Tuesday, Daily News Egypt spoke to Raouf Ghabbour, chairperson of the board of directors of GB Ghabbour Auto, to understand his vision on the summit and the issues they plan on tackling.
What are the most prominent points you want to be the subject of discussion during the Egypt Automotive Summit?
The importance of the automotive industry as one of the most prominent industries supporting the national economy has to be emphasised, due to the large number of people it employs. There is a possibility of strengthening that industry in Egypt, with the aim of achieving economic prosperity for Egypt as well as achieving real growth in that sector. That would positively impact the growth rate of the gross domestic product. Moreover, the automotive industry has the ability to attract huge foreign investments.
What are the most prominent challenges facing the automotive sector now?
The largest challenge facing the sector is the flotation of the Egyptian pound, which has had a very negative effect on the per capita income of the Egyptian populace. People’s purchasing power has been severely diminished, which h.as reduced the demand for cars. The people need more time to absorb the impact of recent economic measures.
How do you see the investment and economic opportunities in the Suez Canal Economic Zone and the ways of promoting feeding industries? What are your recommendations for this area?
The Suez Canal Economic Zone has an outstanding location in the heart of the Middle East, Africa, and the world. It also links the west and the far east, which makes it a golden opportunity that should be exploited as soon as possible.
We should work on attracting local, foreign, and Arab investors, by providing them with tax benefits. For example, the government could reduce taxes in the Suez Canal Economic Zone by about 10%, and they could facilitate the allocation of land for serious investors. This could be done through a comprehensive plan specific to the economic zone that also targets industries the state wants to establish in this area.
What do you think about the current tax and customs systems and its impact on the automotive and feeding industries sectors?
I think that the automotive industry strategy that was recently submitted to the parliament for discussion will result in a radical solution to all the distortions within the Egyptian automotive industry.
Currently, all investors and people working in the automotive industry want the strategy to be unveiled as soon as possible, because companies working in the automotive sector or those that are planning on investing in the sector must create clear and sustainable investment plans.
All investors and employees in the automotive sector wish for the strategy to appear as soon as possible, so companies working in the automotive sector or planning to invest in it, will manage to set their investment plans clearly and sustainably.
What is your opinion about the change of the state’s monetary policy, and its ways to deal with the current situation?
I agree with the flotation of the Egyptian pound. Liberalising its exchange rate against other currencies allows the value of those currencies to be determined by supply and demand, and the Central Bank of Egypt has not imposed any restrictions on the banks’ freedom to provide foreign currency for any particular kind of legitimate goods, whether they are essential ones or not.
I do not think there is any risk of a foreign currency shortage to cover import operations, because the dollar supply has grown.
The only way the informal market will return is if foreign currency restrictions are put in place over certain sectors, and so the state should work faster to provide import companies and manufacturers with the amount of foreign currency they need to operate.