Imagine a city with rich cultural significance built on ancient stones that tells a story of its bygone era. Founded by Alexander the Great, Alexandria, the second-largest city in Egypt and an important economic hub, is a place where the past and present intertwine, from the grandeur of the Bibliotheca Alexandrina, to the feel of warm sand between your toes. Once home to the Great Library, the city was the intellectual hub of the ancient world.
With a population of 5.2 million, it is the biggest city on the Mediterranean Sea, the sixth-largest in the Arab world, and the ninth-largest in Africa. The city stretches about 40 kilometers along Egypt’s northern coast and is a popular destination for tourists. The city plays a key role in the industry, especially because of its natural gas and oil pipelines from Suez. It is also Egypt’s main seaport and a significant industrial center.
The History Rich with Economic Growth
Founded in 332 BCE, Alexandria quickly became a pivotal city in the ancient world. It was established as the capital of Alexander’s new dominion in Egypt and served as a strategic naval base to control the Mediterranean Sea. It was renowned for its great library, the Library of Alexandria, which became a center of learning and scholarship, attracting scholars from various cultures.
For over a millennium, the city thrived as a cultural and economic hub. It was the capital of Egypt until 642 CE, when it fell to Arab forces, leading to a decline in its status and influence. After losing its capital status, it experienced a long period of decline, particularly during the late Ottoman period, when it was reduced to a small fishing village.
Historically, Alexandria’s economy was heavily reliant on its port, which facilitated trade across the Mediterranean. The city’s strategic location allowed it to become a major trading center, connecting Europe, Africa, and Asia. This trade network contributed to its wealth and cultural diversity, making it a cosmopolitan hub.
During the Hellenistic period, the city was a center for trade, manufacturing, and agriculture. The fertile lands spread across the city supported the production of grain, which was crucial for feeding the population and exporting to other regions. It also became known for its production of textiles and glass, which further enhanced its economic significance.
The Economic Powerhouse of Egypt
Alexandria contributes significantly to the national GDP of Egypt, as it is considered one of its major economic powerhouses. The city’s economy is diverse, including sectors like manufacturing, trade, tourism and services.
‘Approximately 40% of Egypt’s industrial activity occurs within the city’s metropolitan area, making it an essential player in the country’s economic landscape.’
Petrochemicals, textiles, food processing, and cement production are key components of the city’s strong industrial sector. The commercial sector thrives because of its strategic location as a trading hub, where imports and exports flow through its ports. Tourism also plays an important role in its economy as the visitors flock to see historical sites like the Catacombs of Kom el Shoqafa and modern attractions such as Mediterranean beaches.
Agriculture is also significant in the regions surrounding the city. The government has initiated land reclamation projects to boost food production and provide jobs for people moving from crowded cities. One such project allows university graduates to buy parcels of reclaimed land with long-term loans, encouraging them to engage in farming.
In the 1820s, Europe’s rising demand for cotton greatly benefited Alexandria, leading to increased wealth for the city. By the 1840s, the city had become an important center for banking and commerce. The Alexandria Stock Exchange, established in 1883, was a key development, followed by the Cairo Stock Exchange in 1903. These two exchanges eventually merged to form the Cairo and Alexandria Stock Exchanges (CASE).
The Business Environment
Alexandria has a supportive business environment thanks to strong government backing aimed at encouraging industrial growth. The General Authority for Investment (GAFI) plays a key role by providing incentives for foreign companies that want to set up operations in free zones or industrial parks. One major benefit is a fast registration process that allows multinational companies to start their businesses in just three days, making it easier and quicker for them to operate. The city also has a young workforce that comes from many educational institutions, producing skilled graduates in various fields.
It is Egypt’s leading trading city and serves as the main center for importing and exporting goods. The city is home to the country’s largest seaport, which handles over 40% of Egypt’s trade traffic. It has a well-developed infrastructure, including roads, communication systems, electricity, and water and sewage networks. It also has convenient access to the International Northern Coastal Road.
The King Marriout area offers a healthy, dry climate ideal for businesses like spas and specialized hospitals. It also features tourist villages that attract year-round investment. The city has two international airports that enhance its investment opportunities and facilitate the movement of imports and exports.
Tourism in Alexandria
Known for its beautiful location, pleasant climate, and elegant architecture, blending ancient history with modern attractions, the city offers its tourists a unique experience. There are about 41 tourist sites catering to various interests, including leisure, religious, medical, sports, and cultural tourism.
Notable religious sites include the Abul Abbas Mosque, Al Busayri Mosque, Mar Mina Monastery, Church of St. Mark, Pompey’s Pillar, and Kum Al Shukafa Cemetery. Important archaeological sites include the Roman Amphitheater and the Qait Bey Citadel. The recently revived Library of Alexandria, also known as the Bibliotheca Alexandrina, has become a significant cultural landmark.
In terms of agriculture, it has about 162,100 acres of farmed land, along with 133,000 acres of arable land, contributing to its diverse economy.
What Makes it a Great Destination for Foreign Investment?
The city has become a popular choice for foreign investments in recent years. Here are some key factors that make the city appealing to investors.
1. Strategic Location
Alexandria’s location on the Mediterranean coast is one of its biggest advantages. As Egypt’s main port, it acts as a vital gateway for trade with Europe and the Arab world. The city is only three to four days away from European markets by ship, which helps businesses save on shipping costs and time. This makes it easier for companies to reach international markets.
2. Infrastructure Development
The city has well-developed transportation systems that are essential for business operations. It has two major seaports—Port of Alexandria and Port of El Dekheila—which handle about 75% of Egypt’s foreign trade. It is also connected by extensive road and rail networks to Cairo and other regions, which enhances its logistical capabilities.
Recent infrastructure improvements, such as the Alexandria Development Project supported by the World Bank, aim to enhance accessibility and streamline business processes, contributing to a better business environment.
3. Economic Diversity
Its economy is diverse, featuring various industries like chemicals, textiles, food processing, petrochemicals, and pharmaceuticals. Its manufacturing industry has been growing at rates of 5-8% in recent years, indicating a healthy economy with potential for further growth. There are also opportunities in emerging sectors like renewable energy and technology startups, supported by the Egyptian government’s efforts to diversify the economy.
4. Government Incentives
The Egyptian government has introduced reforms to make the investment climate more favorable. For example, a new investment law enacted in 2017 simplifies procedures for foreign investors and offers various incentives. The General Authority for Investment (GAFI) has set up a one-stop shop in the city to help businesses register and establish operations in just three days. It also has several free zones that provide tax exemptions and other benefits to businesses operating there, encouraging foreign direct investment (FDI) and boosting economic growth in the region.
5. Skilled Labor Force
Another important factor attracting foreign investment is the availability of a skilled workforce. The city has many educational institutions that produce qualified graduates with the skills needed for various industries. This ensures that businesses can find suitable employees to support their operations.
Key Industries in Alexandria
The city’s economy is supported by several important industries that contribute to its growth:
| Textiles | 284 companies |
| Food Industry | 350 companies |
| Chemical production | 176 companies |
- Textiles: This industry has been significant since ancient times and is still one of the largest employers in the area. There are over 284 registered companies that produce textiles, making the city a leader in this sector.
- Food Processing: The food industry has grown quickly because of rising domestic demand and opportunities for exporting products. Around 350 companies are focused on processing vegetables. This factor highlights the city’s role in food production.
- Chemical Production: There are about 176 companies that specialize in making chemical products. This sector is essential for meeting local needs and supplying international markets.
Opportunities for Investment in Alexandria
Alexandria offers a variety of investment opportunities for those looking to take advantage of emerging trends:
- Renewable Energy Initiatives: As Egypt moves towards more sustainable energy sources, there is a growing interest in investing in solar and wind energy projects. This shift presents a promising opportunity for investors focused on renewable energy.
- Technology Startups: The rise of technology-driven businesses is creating new avenues for innovation in areas such as logistics, finance, and e-commerce. Investors can explore opportunities in this rapidly evolving sector.
- Real Estate Development: With many tourists attracted to the city’s historical sites and beautiful Mediterranean beaches, there is significant potential for real estate development, particularly in hospitality services. This includes hotels, resorts, and other accommodations that cater to visitors.
Along with the calm and relaxing presence of beaches and rich historical and cultural background, Alexandria, Egypt, is an important business center with great potential in the Mediterranean region. The blend of rich history and strong economic activities creates a unique environment that supports growth in many sectors. Stakeholders can gain many benefits from the city by taking advantage of the investment opportunities. As interest in emerging markets like Egypt continues to rise, the city is well-positioned as a strategic location where history blends with modern business.
