Labour, One of the Obstacles to Investment in Egypt

Egypt is making continuous efforts to improve the investment environment, whether by developing legislation, improving infrastructure or offering tax incentives to local and foreign investors; despite these initiatives, there are still fundamental challenges hindering the attraction and flow of investment, most notably the problem of the workforce, which directly affects the efficiency of production operations and investors’ decisions.

We summarize the challenges of the labour market in Egypt as (weak technical skills – the absence of a work culture – the scarcity of labour in the new industrial zones – the government’s failure to pay attention to technical education geared to industry and to dealing with modern technology – the failure to benefit from studying the reasons for the failure of the German experience of establishing 100 schools to raise the efficiency of the workforce).

A large sector of the workforce in Egypt suffers from a lack of technical and professional skills because of the wide gap between education and training systems and the needs of the actual labour market, and this shortage pushes investors to bear additional costs to retrain workers or bring in foreign expertise.

Employers face challenges relating to weak commitment and job discipline and the decline of the culture of quality and productivity, factors that are reflected in the performance of companies and industry and limit their ability to compete locally and internationally.

Despite the updating of labour laws, some regulations still form an obstacle, especially regarding flexibility in hiring and terminating contracts and the absence of a supervisory body responsible for the performance and discipline of workers in the private labour market, which makes investors fear entering into long disputes with workers.

Trained cadres are mostly concentrated in the big cities such as Cairo and Alexandria, while the new industrial zones, especially in Upper Egypt or the Suez Canal area, suffer from a clear shortage of qualified labour, which raises the cost of hiring and transport.

Nor should we forget that the occupations of tuk-tuk, microbus and minibus driver and parking attendant are attractive fields for labour and for anyone without a trade, and are also one of the sources of crime, to which we will devote a separate article later.

We propose copying the Chinese experience in preparing skilled labour, which is a global model of how to turn labour from a burden into a competitive advantage attractive to investment. We will address that experience in detail in our next article. To be continued.

Dr. Bahaa Helmy – weekly issue – 8/5/2025