Meeting the Sphinx

This report by the South African Institute of International Affairs (SAIIA) examines the experiences of South African firms operating in Egypt. It analyzes Egypt's macroeconomic stability, its shift toward a liberalized market economy, and the specific challenges faced by South African investors, including cultural barriers, bureaucratic red tape, and corruption. The document provides policy recommendations for both the Egyptian and South African governments to enhance bilateral trade and investment.

• Egypt has experienced significant macroeconomic growth and stability since 1991, with an average growth rate of 4.4% over eight years and a GDP that grew from $86.3 billion in 1999 to $93.9 billion in 2003.
• South African firms are marginal players in the Egyptian market compared to investors from the EU, US, and Arab world, often due to being late entrants and facing language and cultural barriers.
• A significant business constraint for South African firms is an unfavorable work ethic characterized by high rates of absenteeism and tardiness, often linked to family and religious obligations.
• Corruption, particularly bribery and a lack of transparency in government contracts, negatively impacts business transactions and the efficiency of public sector departments.
• The Egyptian market is highly price-sensitive, and limited disposable income restricts the customer base for high-quality South African products; only about 10% of the population can regularly afford imported goods.
• Customs regulations are a major hurdle, with rigid procedures, arbitrary tariff rulings by officials, and overlapping regulatory authority among ministries that complicate import clearance.
• South African companies have found success in specific niches, particularly in construction, retail, agriculture, and engineering, often utilizing joint ventures with local partners to navigate the business culture.
• Egypt's legal system is perceived as a constraint because the process of reaching judgments is slow and costly, although the government has introduced computerized systems to reduce red tape.
• Egypt is strategically positioned as a gateway for South African firms to access the Middle East and North Africa (MENA) region, which has a potential market size of 385 million inhabitants.

APA

Besada, H. (2006). Meeting the Sphinx. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2013/06/biap_rep_07_egypt_report_2006_en.pdf

Chicago

Besada, Hany. Meeting the Sphinx. South African Institute of International Affairs, 2006. https://saiia.org.za/wp-content/uploads/2013/06/biap_rep_07_egypt_report_2006_en.pdf.

Wikipedia

{{cite report |last1=Besada |first1=Hany |title=Meeting the Sphinx |publisher=South African Institute of International Affairs |date=2006 |url=https://saiia.org.za/wp-content/uploads/2013/06/biap_rep_07_egypt_report_2006_en.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{besada2006meeting, author = {Besada, Hany}, title = {{Meeting the Sphinx}}, institution = {South African Institute of International Affairs}, year = {2006}, url = {https://saiia.org.za/wp-content/uploads/2013/06/biap_rep_07_egypt_report_2006_en.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }