Egypt's Senate Approves A Draft Bill Allowing Informal Industrial Projects to Operate Legally

The Senate – Egypt's upper consultative house – approved a government-drafted bill granting the Industrial Development Authority (IDA) the power to allow informal industrial projects to operate for a temporary one-year period.

This period, however, could be extended for an additional two years by the Trade and Industry Minister upon the recommendation of IDA and after these projects observe pre-conditions stipulated by the Environment Ministry and Civil Defence Authorities.

"The bill comes to serve the state's policy aimed at supporting the industrial sector either in the form of eliminating obstacles facing industrial projects or helping informal industrial businesses to operate in a legal way.

Either way this will have a positive impact on the national economy," said a 32-page report prepared by the Senate's Industrial Committee.

The report indicated that "in 2017 law no.15 was passed to grant the IDA the power to allow informal industrial projects to operate for a temporary two-year period starting from the date of the enactment of the law."

"The law was enacted on 4 May 2017 and expired on 3 May 2019. As a result, it was necessary to draft the new bill to grant IDA a new extended power to legalise informal industrial projects for another period of time until they adjust their production conditions," said the report.

Head of the Senate's Industrial Committee Mohamed Halawa said that "the bill comes while Egypt is struggling hard to double its industrial production to meet local needs, boost exports, cut down imports, and generate much-needed foreign exchange," said Halawa.

Senator Hossam El-Khouly, the spokesman of the majority party of Mostaqbal Watan, said that the bill comes at the right time as Egypt is struggling hard to contain the negative fallout of the one-year global economic crisis triggered by the war in Ukraine.

"This war made production inputs highly expensive and hard to get by the Egyptian industrial sector," said El-Kholy, stressing that "the new bill is the latest in a list of measures designed to boost the industrial sector."

On a different note, however, several senators agreed that the reason why thousands of informal industrial projects and businesses are operating without a legal licence is the cumbersome bureaucratic obstacles stipulated by the IDA.

"These obstacles have made it highly difficult for many industrial businesses to get a licence," said Wafdist senator Yasser El-Hodeibi.

In response, Minister of Trade and Industry Ahmed Samir said the IDA is doing its best to simplify licensing measures for industrial projects.

"IDA is granting tax facilities and exemptions to unlicensed industrial projects to go formal and contribute to the national economy," said Samir, indicating that "an estimated number of 2800 projects have been able so far to get a licence."

Once approved by the Senate, the bill will find its way to the House of Representatives to be finally discussed and approved.