Alaa El-Saba knows only too well the challenges facing Egypt’s automotive industry, from the shortage of dollars to the unwelcome layers of bureaucracy that slow down business. However, he is confident that solutions can be found in all cases, and the Egypt Automotive summit presents a fine opportunity to exchange ideas.
Speaking by telephone with Daily News Egypt, El-Saba said workers and experts in the sector should make the most of the event to present their ideas to government bodies, working to find quick solutions to the problems hindering the sector’s growth.
“However, the solutions must work for the best interests of both parties – the state and the sector, which is an important area for investment,” he said.
“The conference brings together all the interested parties in the automotive sector, along with officials and governmental bodies. Issues are discussed with all concerned parties and solutions are presented to solve the problems and coordinate with the government.”
El-Saba said the most prominent challenge facing the Egyptian automotive business is bureaucracy. He gives the example of the absence of licensing for automotive exhibitions in Cairo and Giza, with authorities claiming that such events disrupt traffic.
“However, licenses are provided to other activities that actually do disrupt traffic,” he said.
Among the other examples of unhelpful bureaucracy, he pointed to the tough restrictions in the customs authority that impose guide prices on bills that are presented by agents and importers without giving reasons for this amendment. He says such actions conflict with international conditions and agreements like the General Agreement on Tariffs and Trade (GATT).
An even bigger problem, in El-Saba’s opinion, is the difficulty that all sectors face in sourcing foreign currency, which causes serious problems in importing goods and materials.
“In the auto industry, the result is difficulties in the process of importing fully manufactured cars, or even the parts required for the manufacturing,” he said.
As for the current strategy of the automotive sector, El-Saba said importers would not be negatively affected.
“The aim is to improve local industry, not restrict imports,” he said. “Importers will not be affected by the strategy because the basis of the strategy is to add value by local production.”
He said the approval of the automotive industry strategy in Egypt will make it necessary El-Saba Automotive to consider the opening of new centers for selling and after-sale services, as well as considering the possibility of investing in the car feeding industries.
El-Saba is a member of the Federation of the Egyptian Chambers of Commerce in Cairo, and he takes an interest not only to the auto industry, but in all sectors of the Egyptian economy, including major infrastructure projects such as the Suez Canal Area Development Project.
“The success of the Suez Canal project involves the state’s ability to take measures that motivate investors,” he said. “Most importantly, that means providing them with land on both sides of the canal, either through usufruct or for very low prices – or even free of charge, as is the case in all other countries that encourage investment in new locations.”
Among the policies used by government to encourage both foreign and Egyptian investors is that of tax exemption extending over long periods, explained El-Saba. Another option is to provide investors with cut-rate energy for their projects, which attracts companies and encourages them to invest.
With creative thinking along such lines, he said, all sorts of problems can be solved, for the benefit of all.