Egypt is one of Africa’s biggest economies, with a GDP of $1.198 trillion and a GDP per capita of $11,850. However, distribution of wealth in the country is a pressing issue, with 26% of Egyptians living below the poverty line. The official currency used in the country is the Egyptian pound. Regulation of the currency and local banks is the mandate of the Central Bank of Egypt, which is the country’s national reserve bank. Annual exports from the country are valued at $20.88 billion, with the primary export commodities being petroleum products and crude oil, chemicals, and textiles. On the other hand, the country’s annual imports are valued at $57.91 billion, with foodstuff, machinery, and equipment being the main import goods. The leading industries in the country are the agricultural, energy, and tourism industries.
The Nile Valley and Delta are the country’s two most agriculturally productive lands, which covers an estimated 6 million acres when combined. Grains (rice, wheat, and corn), cotton, sugarcane, tobacco, and onions are the most important crops in Egypt. Most of Egypt sits on a desert, which expands each year, threatening the country’s 3.1 million-hectare arable land. An estimated 11,736 hectares of this agricultural land is lost to desertification each year. As water is a scarce resource in the country, Egypt has invested heavily in solar-powered desalination facilities. The country relies on food imports to sustain its domestic demand. The domestic production of wheat in the country was about 8.3 million tons in 2015, against a demand of 19.6 million tons. In the same period, the country produced 6.1 million tons of corn, against a demand of 10.9 million tons. Most of the imported grain is sourced from the United States.
The performance of Egypt’s economy is dictated by the country’s energy industry, which is the country’s top foreign exchange earner. The main sectors in this industry are oil, natural gas, hydro-power, and solar and wind power.
Oil dominates Egypt’s energy industry, with the country producing as much as 0.9 million barrels of oil each day. The proven oil reserves on which Egypt sits on are among the largest globally, estimated to be 3.7 billion barrels. Egypt is a significant player in global oil production and is a member of the OAPEC (an acronym for Organization of Arab Petroleum Exporting Countries). The Gulf of Suez, the Western and Eastern Deserts, and the Sinai Peninsula are Egypt’s top oil-producing regions. The biggest of all refineries in the country is the El-Nasr Refinery situated in Suez, which has a capacity of refining about 0.146 million barrels of oil each day. Cumulatively, all nine refineries in the country have a daily capacity of processing over 0.726 million barrels. The country consumes most of its oil; as much as 0.564 million barrels each day, the majority of which is used in power production.
Egypt is also a major producer of natural gas, having Africa’s third largest confirmed gas reserves. The country is believed to sit on 120 trillion cubic feet of natural gas reserves. The Zohr region sits on the largest gas field deposits in the Mediterranean region, estimated to have 30 trillion cubic feet in volume. Egypt’s Eastern and Western Deserts are believed to cumulatively have 5.7 million barrels in shale oil reserves, among the highest in the region. Most of the natural gas produced in Egypt is consumed locally. In 2013, 1.9 trillion cubic feet of the total 2 trillion cubic feet of natural gas produced in the country went to the domestic market. The Middle East is an important market for Egypt’s natural gas, most of which is transported through the 750-mile long Arab Gas Pipeline.
Hydropower is the number-one source of Egypt’s electricity, as the country taps into the power of the Nile. There are numerous hydropower stations found along the Nile, with the Aswan High Dam, the Naga Hamady and the Esna Dam being the three major stations. Aswan High Dam is the most important of the three and has an electricity production capacity of 2,100 MW. The country is also about to venture into nuclear energy, after years of deliberations and plans are underway to establish a $1.5-billion nuclear power plant at El Dabasa.
Solar and Wind Power
Another sector in the industry is solar energy. With most of the country being a desert, and having some of the highest annual solar hours in the world, it is expected that Egypt is a major player in solar energy production. But despite increased investments from the Egyptian government in renewable energy source, solar energy accounts for only 1% of the country’s electricity. Nonetheless, Egypt is home to impressive solar installation projects, including the world’s largest solar installation; the Benban Solar Park. Wind energy is another area in which Egypt has great potential, particularly along the coast of the Red Sea. The country has put in place infrastructure to tap into this energy resource, which is expected to account for about 12% of the country’s electricity production.
Another key contributor to Egypt’s economy is the country’s tourism industry. The industry employs about 12% of Egypt’s labor force and accounts for 11% of Egypt’s Gross Domestic Product. The Great Pyramids of Giza, are the country’s star attraction. Egypt’s popularity as a top tourist destination rose tremendously in the 20th century, with tourist numbers growing from 100,000 in 1951, to 5.5 million in 2000. Tourist numbers in Egypt reached their highest in 2010 when approximately 14.7 million visitors toured the country bringing in $12.5 billion in revenue. However, the industry is yet to reach such heights in revenue and tourist numbers, after the 2011 Arab Spring and the civil unrest that ensued ruined the nation’s reputation internationally. To illustrate the effects of the Arab Spring on the industry tourist numbers dropped to 9 million in 2011, from the 14 million recorded in 2010, a 37% plunge, while revenue dropped from $12.5 billion to $8.7 billion in the same period. The decline in tourist numbers witnessed in the recent past has had a domino effect in other sectors of the industry such as hospitality, tours, and travel.