Fitch Solutions’ latest report says, Egypt is best-placed to grow apparel production in the Middle East and North Africa (MENA) region, as the country has the largest regional working-age population. The report says, Egypt is likely to make significant gains in mid-range apparel manufacturing due to its favorable demographics and relatively low labor costs. The country has implemented key reforms in recent years. These include adopting new investment and bankruptcy laws, liberalizing its currency, and adding momentum to growth prospects.

Egypt also has base labor costs that are comparable to its Asian competitors. Besides, the North African country is geographically close to Europe, and has preferential market access to the US and EU. This could outweigh the country’s relatively high labor taxes and social insurance costs. Infrastructure investment and structural reforms aimed to improve the operating environment further raise Egypt’s competitiveness, says the report. Egypt has high labor availability, medium apparel manufacturing expertise, many trade agreements, and a medium transport network.

That said, the Egyptian mid-range manufacturing sector is still relatively underdeveloped. Electrical and mechanical machinery, alongside vehicles, account for less than a tenth of the country’s total exports.