Washington, DC – As part of its efforts to increase economic inclusion of small businesses in Egypt, the Federation of Economic Development Associations (FEDA) with support from the Center for International Private Enterprise (CIPE) has published a report titled “Report on the Implementation Gap of the Simplification of Industrial Licensing Procedures Law (Law No. 15 of 2017) and its Executive Regulations.”
“The report comes at a critical time” Greg Simpson, Regional Director for the Middle East and North Africa at CIPE, said. “The 2017 law was hailed as an important step forward for small businesses in Egypt but business owners are finding that the law’s provisions for streamlining licenses procedures are not being implemented in practice.”
FEDA’s report provides recommendations for how the government can better implement this law based on field research that FEDA conducted from April-December 2018. FEDA has shared their findings with the Industrial Development Agency (IDA)—the agency charged with issuing industrial licenses under the new law.
During its study, FEDA, surveyed its members about remaining issues and conducted seven in-depth roundtables in different regions. FEDA found that numerous business owners encountered difficulties in obtaining information from the IDA. Fifty-three percent of respondents believe the IDA executives, especially at local level branches, lack the capacity to carry out their duties. Some owners of small and micro enterprises feel the new laws did not change the practices on the ground.
The report identifies several key factors, including lack of awareness of the law among business owners and the government agencies previously in charge of issuing licenses. SMEs also face serious problems acquiring industrial land and informal businesses do not have real incentives to formalize under the law.
Based on these findings, the report offers detailed recommendations to improve implementation of the law. More funding needs to be allocated to the IDA so that it can strengthen its capacity and expand its reach to more governates. The IDA should also increase outreach to SMEs and reduce fees required for obtaining a license. FEDA, with the support of CIPE, will use these recommendations to draft proposed executive bylaws to be submitted for the consideration of the parliament’s industrial and SMEs committees, as well as the IDA and the Ministry of Trade and Industry.
A non-profit affiliate of the U.S. Chamber of Commerce, CIPE currently implements 130 programs in 50 countries around the world.
The report can be found in Arabic here: https://cipe-arabia.org/wp-content/uploads/2019/01/FEDA_Implementation_Gap_of_the_Simplification_of_Industrial_Licensing_Procedures_Law.pdf