Egypt’s handicrafts industry: What’s standing in its way?


As one of the most ancient civilizations, one would think that Egypt’s rich history and cultural diversity would cement its place in the global handicrafts market. However, given the major challenges standing in the way of the sector’s growth, reality tells a different story.

The Egyptian Center for Economic Studies (ECES) held a symposium entitled: “Handicrafts in Egypt: Are we on the right path?”, in order to discuss the present scenario of the handicrafts sector in Egypt and the challenges facing the enrichment of the long-ignored, underutilized sector.

The stats
The size of the local handicrafts market was estimated to be around LE3 billion in 2017, as per official estimates.

Over 80% of handicrafts sales in Egypt are completed by outbound tourists, while locals make up 16%. Merely 2% of sales are business-to-business (B2B).

Exports dropped almost 50% from 2013 to 2017- namely from $431 million to $269 million. On the other hand, imports of handicrafts increased from $247 million to $269 million throughout the corresponding period.

Referring to the economic importance of the handicrafts industry in Egypt,executive director and director of research at ECES Abla Abdel Latif stated that as many as two million women are reportedly working in the sector, most of whom are their family’s breadwinners. Those women usually reside in rural or isolated areas.

Accordingly, promoting the industry as a whole is vital for women’s economic empowerment.

What does the industry look like?

The sector is mainly comprised of informal organizations and small- and medium-sized enterprises (SMEs), limiting its access to finance, technology and available export opportunities,chairman of the Egyptian Export Council for Handicrafts (EECH)Hisham El Gazzar, commented during the symposium.

“The sector is represented by three major players: artisans, designers and traders – the interaction between these three components is complex and disorganized,” he added.

Hence, a unified strategy that organizes the craft’s value chain, addresses each player’s pains and ensures they function smoothly is essential.

Where does the problem lie?
As generations try to pass on their skills to their successors, the world is moving rather fast towards using technology instead of handiwork. Chairman of Yadaweya for Traditional Handicrafts, Osama El-Ghazali, explained that most of these crafts are going extinct. As the profession is not necessarily economically rewarding, skilled labor has become scarce and the second generation has turned less pursuant of the career path.

 

Moreover, the lack of a centralized database and market data hinders any potential efforts to encourage more investments, causing market disorientation, Abdel Latif argued.Adding to that, local and international exposure of the craft remains minimal.

Another issue facing the sector is the poor quality of the raw material used in the traditional manufacturing industry, usually falling short of international standards, which calls for the standardization of vendors for artisans, she added.

The way forward
According to the participants, vocational training is vital for the growth of the traditional manufacturing industry – hence, the establishment of specialized, ad-hoc schools is essential.

In terms of institutional reforms, Abdel Latif recommended the establishment of a lean entity that would include experts from the industry and representatives from relevant ministries. The entity shall be entrusted with executing market studies and formulating policies based on a reliable database. Its recommendations shall be binding and supervised by the Central Agency of Public Mobilization and Statistics (CAPMAS).

The participants also agreed on the importance of tapping into e-commerce channels for artisans and facilitating industrial licenses for manufacturers to help them streamline their work.

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