Egypt: Details on Economic Activity
Egypt is a country where nearly 96 percent of land is covered by deserts. However, agricultural sector remains the major employer of the country’s population. Despite the low percentage of arable land and insufficient water supplies, Egypt’s agricultural industry is among the most efficient in the region. In 2010, the sector constituted 14 percent of the country’s GDP (Lombard Global, 2011).
The World Bank statistics indicate that Egypt is ranked 36th of 147 countries in tractor concentration, averaging 390 tractors for each 100 sq. km (2014). The total number of tractors reached 103,000 in 2010. Nearly 40 percent of Egypt’s working population is engaged in the agricultural sector (Lombard Global, 2011).
Unlike in the most other developing countries, Egyptian agriculture is heavily oriented toward commercial production. Field crops comprise around 75 percent of the total value of the country’s agricultural production. The remaining 25 percent come mainly from fruits, vegetables, and livestock products. There are two seasons of cultivation in Egypt – for winter and summer crops. Cotton is the main summer crop; it involves much of the available labor force and contributes a significant part to the total value of exports. Egypt is the region’s leading producer of cotton, usually delivering around one-third of the world crop (Little, 2014).
The country is also a major producer of corn, wheat, rice, potatoes, tomatoes, sugar beet, and sugar cane. In 2013, the output in tons included wheat, 9,598,000; maize, 7,830,000; rice, 5,125,000; onion, 2,960,000; sugar cane, 15,900,000; sugar beet, 9,920,000. Many sorts of fruit are cultivated, and some, especially citrus, are exported (Bank Audi, 2014).
Although Egypt is not a major producer of oil by the world standards, the country’s dominant mining activities revolve around the extraction of crude oil. In July 2000, the total oil reserves were estimated to be at around 3.9 billion. In comparison, 260 billion barrels of oil are estimated to lie under Saudi Arabia’s land. In June 2014, Egypt produced an average of 480,000 barrels of crude oil a day, which was a record low. The production has declined continually since 1996, when the all-time peak was established at the 930 BBL/D/1K (Trading Economics, 2014).
Besides the extraction of crude oil, Egypt has natural gas reserves at 1,6 trillion cubic meters, with potential additional discoveries with more exploration efforts. While the government intends to increase oil exports, the policy has been implemented to promote the use of natural gas for domestic needs. Gas production is mainly restricted to the region alongside the Nile delta. Gas is predominantly consumed for power generation.
Egyptian enterprises offer a vast array of goods. Textiles and food products represent the largest portion of the country’s manufacturing revenue. Other important manufactured goods are pharmaceuticals, ceramics, and furniture. Heavy industries, such as steel and iron production, are concentrated mainly around Cairo and Alexandria (Little, 2014). Automobiles are also of growing significance to the Egyptian economy.
Tourism is one of the most important sources of revenue in the Egyptian economy. Nearly 15 million tourists visit Egypt annually, providing income of about 13 billion dollars. At its peak, the sector provided jobs to nearly 12 percent of the country’s labor force, while contributing over 11 percent of GDP (Khairat, 2014). On the global scale, tourism in Egypt comprised 1 percent of the world’s tourism market.
The Suez Canal is another substantial source of income. In July 2014, the revenue from the waterway linking the Mediterranean to the Red Sea comprised 483 million dollars (Reuters Africa, 2014). On average, nearly 14 thousand ships pass through the canal each year.
The finance sector in the country is under control of the Central Bank of Egypt, which establishes banking and monetary policies via the regulation of interest rates, reserve, and liquidity ratios. Generally, the banking system is underdeveloped. Many of the services in the banking sector remain basic; most transactions within the country are still conducted using cash.
In 2013,Egypt’s imports totaled 59 billion dollars. The main import goods include machinery and equipment, as well as fuels, wood products, and some chemicals. Egypt’s major import partners are China, Italy, Germany, Turkey, Russia, Ukraine, and the US (Central Intelligence Agency, 2012).
Exports in 2013 comprised 25 billion dollar. Crude oil and petroleum products are Egypt’s principal portion of export. Other export goods include cotton, textiles, steel, agricultural goods, and chemicals. The country’s major export partners are Italy, Turkey, Saudi Arabia, the US, and India (Central Intelligence Agency, 2012).