The Egyptian government is implementing a six-pillar strategic plan designed to overhaul the country’s environment for startups, according to Mohamed Farid, the Minister of Investment and Foreign Trade. The announcement followed the first meeting of the newly reconstituted Ministerial Group for Entrepreneurship, chaired by Deputy Prime Minister for Economic Affairs, Hussein Issa.
Quick Facts
- Egypt launches a 6-pillar strategic plan for startups.
- Plan includes new funding tools like convertible notes.
- Sovereign Fund to create a publicly-listed VC firm.
Overhauling Regulations and Funding Mechanisms
Minister Mohamed Farid detailed several core components of the new strategy. The plan includes a significant overhaul of the General Authority for Investment and Free Zones (GAFI) to make it more supportive of innovation.
New financial valuation standards, better suited to the high-growth nature of startups, will be adopted. The government also intends to regulate shareholder agreements to enhance governance and provide legal clarity.
“The ministry is studying the activation of modern financing instruments, including convertible notes,” Farid stated, highlighting a move to align with globally recognized funding practices for early-stage companies. He also mentioned the creation of a regulatory sandbox in the foreign trade sector to support innovative solutions aimed at increasing Egyptian exports.
A Sovereign Push into Venture Capital
A key part of the plan involves a direct injection of new, sustainable funding into the ecosystem. Minister Farid confirmed that The Sovereign Fund of Egypt is in the process of establishing a publicly-listed venture capital firm.
“The Sovereign Fund is working to create a publicly-listed venture capital company, which will provide innovative and sustainable financing channels for startups,” Farid explained. This initiative aims to attract more investment into Egypt’s growing tech sector.
Building a National Innovation Framework
During the meeting, Ahmed Rustom, Minister of Planning and Economic Development, presented the national executive framework for supporting entrepreneurship. The framework’s primary goals are to establish Egypt as a regional innovation hub, increase the growth rates of local startups, and create new job opportunities.
“The executive framework includes developing the capabilities of startups, integrating them into global value chains, stimulating innovation, and establishing regional centers outside of Greater Cairo,” Rustom said. He also emphasized a focus on supporting female entrepreneurs and empowering people with disabilities within the ecosystem.
A Coordinated Governmental Effort
Deputy Prime Minister Hussein Issa stressed that entrepreneurship is a top priority for the government, requiring an integrated effort across ministries rather than being the responsibility of a single entity. He announced the formation of a technical secretariat for the ministerial group to coordinate and organize the committee’s work.
The plan’s execution will be overseen by the ministerial group, leveraging the capabilities of the Micro, Small, and Medium Enterprises Development Agency (MSMEDA), the Egypt Entrepreneurship and Innovation Center, and NI Capital. The government also announced the launch of a National Entrepreneurship Forum and the enhancement of the Prime Minister’s Entrepreneurship Unit to support companies from the idea stage through to expansion and exit.
About the Egyptian Ministerial Group for Entrepreneurship
The Egyptian Ministerial Group for Entrepreneurship is a high-level governmental body reconstituted by the Prime Minister in April. It is tasked with coordinating policies and integrating efforts across various ministries and state agencies to create a more supportive and dynamic ecosystem for startups and entrepreneurs in Egypt.
Source: Economy Plus
