A new stab at an old problem: Can Egypt solve its industrial land shortage?
A shortage of land zoned for industrial use remains a major obstacle for investors, despite repeated promises of reform that have failed to deliver satisfactory results. Industry Minister Khaled Hashem has made the issue a top priority as he seeks to revive growth in a sector that has slowed sharply since late 2025.
In recent statements, the Ministry of Industry announced new measures to make industrial land easier for investors to obtain, including expanding lease-to-own access to a wider group of manufacturers. But representatives of investors’ associations told Al Manassa that land ownership is not the main obstacle. The real problem, they said, is the shortage of available land, for which there is still no apparent solution.
What do the new measures offer?
Hashem is presenting lease-to-own as a key solution to the shortage and high price of industrial land, factors that have helped fuel land hoarding and reliance on brokers, adding further costs to land prices.
Under the system, investors can lease industrial land under contracts ranging from seven to 21 years, ending in ownership, for an annual rent equal to 5% of the price per square meter. Osama Hafila, chair of the New Damietta Investors Association, said the arrangement benefits investors by freeing up a significant share of capital that would otherwise be absorbed by buying land, allowing it to be directed toward operating expenses and helping accelerate industrial growth.
Hafila told Al Manassa that in many cases, buying and developing land accounts for 60–70% of the initial investment in an industrial project. The new system could therefore create more room for expansion, particularly for small and medium-sized companies.
The lease-to-own plan is also an attempt to counter the slowdown in industry. Growth in non-oil manufacturing declined for a third consecutive quarter in January through March 2026, marking the slowest growth rate in 24 months.
But where is the land to rent?
Alaa El-Sakty, head of the SME Investors Association, agrees that lease-to-own is important, but warns its impact will remain limited as long as the shortage of land persists.
El-Sakty told Al Manassa that the problem lies less in the allocation mechanism than in the shortage of land ready to be offered. He said the measures announced by the Ministry of Industry are a step in the right direction and could help address the problem of industrial land being held by investors who have no genuine plans to develop it, but they will not solve the core issue: the shortage of designated plots.
Former industry minister Kamel Al-Wazir touted his efforts to tackle the shortage through regular offerings. While in office, he said in press remarks, he carried out six industrial land offerings in 2024 and 2025, providing investors with more than 10,000 plots.
He also sought to reduce the cost of acquiring industrial land by offering plots under usufruct arrangements, with investors paying 5% of the purchase price per square meter. Even so, complaints about the lack of land continued because many of the recent offerings, despite their number, were far from the major manufacturing hubs investors wanted.
Mahmoud Sultan, a board member of the 10th of Ramadan Investors Association, told Al Manassa that some existing factories in 10th of Ramadan City applied for plots so they could expand their facilities. The ministry responded that it wanted the factories to expand in other governorates, particularly in Upper Egypt.
Investors also complain of delays in connecting utilities to land included in recent offerings. “An investor cannot put money into an industrial project and then wait a long time for utilities to be connected,” Sultan said.
At the mercy of brokers
Investors who look for land outside Ministry of Industry offerings are left at the mercy of brokers selling at the highest possible price. El-Sakty said industrial land in some serviced areas of Greater Cairo has reached 8,000 to 10,000 Egyptian pounds ($160–200) per square meter, while in Upper Egypt and governorates farther from the capital, it exceeds 4,000 pounds ($80), according to Ali Hamza, head of the Assiut Investors Association.
To curb brokerage and land speculation, the Ministry of Industry has stepped up campaigns to reclaim land from investors who fail to meet project implementation deadlines.
The issue of “unused land” is longstanding. Former ministers have raised it before, including Nevine Gamea, who estimated in 2021 that there were 890 such plots in 12 governorates. But the government has not published clear data on how effective previous campaigns were in easing the land shortage.
Reviving the industrial sector depends not only on the Ministry of Industry, but also requires other government bodies providing the necessary support
The current minister’s first months in office also show how complicated the problem is. After issuing a decision in April requiring investors to wait three years before disposing of industrial land, he was forced to suspend it last month after concluding, he said, that it had actually intensified speculation.
“Obtaining industrial land in Upper Egypt was almost free, as a way to encourage investment in areas lacking infrastructure. But that encouraged some investors to obtain land without genuine operating plans, causing a number of projects to stop shortly after they were established,” the head of the Assiut Investors Association explained.
The head of the New Damietta Investors Association, meanwhile, estimates that around 200 of the 850 plots in New Damietta’s industrial zone are still under construction, stalled, or struggling.
Among Hashem’s other proposals is allowing factories to expand vertically, meaning adding extra floors to industrial buildings. Hafila said this could create more space where production methods allow it, particularly in light industries such as plastics, clothing, and footwear, but would be harder to apply in sectors such as construction materials and engineering industries.
Investors warn that reviving the industrial sector does not depend on the Ministry of Industry alone, but also requires other government bodies to provide the necessary support.
“The sector faces problems including a shortage of financing and difficulty securing imported raw materials. It needs more flexible financing programs at lower interest rates,” El-Sakty said.
The coming period will show whether the current minister can solve problems that defeated his predecessors, longstanding issues that have persisted for decades and passed through the hands of successive ministers without producing the hoped-for results.