Political factors:

In 2020 Egypt undertook elections for the Lower House of Parliament, as well as for the
reintroduced Upper House after it was abolished in the political transition process that
culminated in the 2014 Constitution. The election of the Lower House took place over six weeks
from October to December 2020. Several coalitions contested the elections, the biggest of
which was the National Unified Coalition, which comprised among other parties, the Nation’s
Future Party and the Republican People Party, and that won over 60 per cent of the house’s
seats. The official turns out ratio was 28.8 per cent of registered voters. Thirteen parties entered
the lower House, most of which are strong supporters of the executive. Different groups
boycotted the elections, alleging lack of fair competition. Some candidates alleged irregularities
as well as paying voters for their votes, and filed complaints to the National Election Authority,
comprised of judges, which supervised the election and referenda.

The Upper House, which was re-established after a referendum in 2019, is composed of 300
members, a third of them appointed by the President. 796 candidates, independents and
belonging to party lists, ran for the 200 seats open for competition. A number of political parties
boycotted the election. Among the 100 members appointed by the President are 19 former
military and police officers, 12 political parties’ members, six members of leading professional
and labor syndicates, two former judges, in addition to six of the country’s leading artists1 .
Several relevant domestic and international interlocutors charged that the authorities exerted
influence on the composition of party lists. The elections were undertaken under state of
emergency2 and during the COVID pandemic. In both elections, the National Election Authority
launched awareness-raising campaigns to encourage turn out, and emphasized that boycotting
the election could carry a monetary fine.

Egypt has a presidential system of government, in which the President nominates the Prime
Minister who forms the Government. The 2014 Constitution emphasizes the separation of
powers, with significantly broadened prerogatives to the Parliament. Parliament is bicameral, in
which the Lower House, the legislature, grants confidence to the Government. If the Parliament
votes against the Government, the President has to mandate the party with the largest number
of seats in Parliament to select a Prime Minister, who would have to secure approval for the
Government within thirty days. Failing that, new legislative election should take place. The
Constitution restricts the President’s right to dismiss Parliament by requiring a public
referendum on such a proposal. The Parliament has the right to remove and/or prosecute the
President, as well as withdraw confidence from the President and call for a referendum on early
presidential elections, if they attain a two-thirds majority in the Lower House.

Economic Factors:

High global food and fuel prices have had a big impact on Egypt's external accounts,
pressuring the pound and fueling inflation. This pushed the government into another IMF
programme focusing on large scale privatization and asset sales as well as economic
stabilization measures over 2023-27. EIU expects monetary and fiscal tightening to bring
inflation down towards the ceiling of the target range by 2024, and balance-of-payment
stresses should diminish, although the adjustment will curb economic growth. Over the
longer run the central bank will prioritize growth over defending the pound, which was
floated in late 2022, leading to sustained depreciation but keeping the current-account
deficit within manageable limits. Economic growth should exceed its long-term average
in the second half of the forecast period.

Egypt is estimated to have population of 102.612 million in the year 2021 and expected
to reach 115.558 million by 2027, growing at a CAGR of 2%.

Egypt’s real gross domestic product (GDP) was EGP 3995.20 billion in 2020 and while
recovering from the COVID-19 impact it increased by 5.314% to be around EGP 4128.10
billion in 2021. It is further expected to increase by 5.65% and reach EGP 5,741.23
billion by 2027.

Egypt’s unemployment rate was 7.292% of total labor force in 2021. It is expected to
decrease by 2.15% and reach 6.402% by 2027.

Egypt’s per capita GDP was estimated at USD 3,925.83 whereas purchasing power parity
(PPP) based per capita GDP is estimated to be at USD 13,529.93 for the year 2021.

In 2021, Egypt government’s revenue was estimated to be EGP 1,266.02 billion whereas
the expenditure was EGP 1,729.47 billion. This resulted in Egypt government’s net
lending / borrowing negative at EGP 463.449 billion in 2021 indicating that not enough
financial resources were made available by the Egypt government to boost economic
growth.

The current account balance for Egypt was negative at USD 18.436 billion for the year
2021 and is expected to increase at a CAGR of 1.91% and reach negative USD 16.426
billion by 2027. This negative current account balance indicates that Egypt will remain a
net borrower from the rest of the world till 2027

Moreover, the budget deficit is forecast to narrow by 21% to $23 billion in 2030 from
$29.2 billion in 2020 and the inflation rate is seen to decline by 0.3% to 4.8% in 2030
from 5.1% in 2020.

The unemployment rate is also expected to drop by 2% to 6% in 2030 from 8% in 2020

Revenue in the Furniture market amounts to US$1.96bn in 2023. The market is expected
to grow annually by 9.22% (CAGR 2023-2027). The market's largest segment is the
segment Living Room Furniture with a market volume of US$0.68bn in 2023.
  Egyptian furniture sector is the 3rd largest industrial sector in terms of
establishments and employment in Egypt and accounts for 13% of the total
industrial employment. The country is supposed to have an estimated population
of nearly 100 million by 2020 making it one of the largest markets in the MENA
region. 

 Damietta city is the main hub of furniture manufacturing in Egypt where 70% of
its population is involved in the furniture industry directly or indirectly. The city
is home to an estimated 35,000 furniture production facilities and workshops.
 The local market size stood at USD 28.3 billion in 2015, growing by almost 5% as
compared to 2014. Assuming the same CAGR, it is estimated that the market size
will become USD 38 billion by 2021. 

 Egypt is working towards boosting its economy with some mega key projects that
will keep the demand of wood products & woodworking machinery technologies
at the top in the coming years and below are the few ongoing projects in the
country:
  New Administrative Capital, Cairo (CAPEX: USD 40 – 70 billion) New Coast
South Marina (CAPEX: USD 4 – 5 billion) 6th of October Oasis Mega Urban
Development Project (CAPEX: USD 20 billion) 

 Egypt’s growing population and the increasing income supports the real estate
and retail sectors. And the furniture sector compliments both the real estate and
retail sectors with the increasing consumption of the wood and furniture items.

Social factors:
A hierarchic distribution of power seen in social structures that are in a pyramid shape.
Power is given to a few people at the top and each descending tier represents more
people with a diminished level of power. SOCIAL PYRAMID: "In a social pyramid the
lowest tier has the most people and the least power."

the central ruling class; the local ruling middle class; the stable middle class; the poor
middle class; the working class; and the underclass

Two economic groupings exist in Egypt. One grouping consists of a wealthy elite and a
Western-educated upper middle class. The other grouping, which includes the vast
majority of all Egyptians, is made up of peasants and the urban lower middle class and
working class.

The Egyptian people are facing intense challenges due to rapid population growth, deep
and increasing poverty, widespread youth unemployment, a looming Nile water shortage,
and threats to food security due to climate change.

Under President Abdel Fattah al-Sisi, the military dominates governance as never before
and has become increasingly rapacious. His regime is helping military companies to
crowd out the private sector in the economy as well as diverting scarce government
resources away from critical needs of the Egyptian people and towards arms purchases
and vanity megaprojects.

Technological factors:
A number of policies have been implemented to attract foreign investment in IT
outsourcing, including local employment subsidies, lower corporate taxes and deductions
for training costs. Overall spending on software remains rather low, which reflects the
relative immaturity of Egypt's IT market. One market driver has been a significant fall in
software piracy.

The Information and Communications Technology (ICT) sector in Egypt is very robust,
with a growth rate higher than Egypt’s overall level of GDP growth, equivalent to 16% in
fiscal year 2020/2021 compared to 15.2%in year 2019/2020. Its contribution to the
GDP has increased to 5% in fiscal year 2020/2021 compared to 4.4% in 2019/2020.
Total investments in the sector in year 2020/2021 has reached almost $3 billion.

Under its ICT 2030 strategy, the Egyptian government is undertaking a series of
investments, capacity building and training programs, digital government services
reforms, and infrastructure upgrades. The strategy calls for launching new initiatives to
maximize the contribution of the ICT sector to Egypt’s economic growth by focusing on
capacity building, electronics design and manufacturing, and technology parks. The
strategy also includes a plan for the digital transformation of core government services in
the following areas: education, healthcare, and government services.

The Ministry of Communication and Information Technology (MCIT) has an initiative

called “Our Future is Digital” and aims to train 100,000 young Egyptians and develop
their ICT skills in areas of high market demand, including website design, data analysis,
and digital marketing.

The ministry also launched in 2020 “Our Digital Opportunity” initiate to engage with
SMEs in the digital transformation process. The ministry’s Digital Egypt Project aims to
supply all government entities with fiber-optic cable connections. This process has been
completed in 5,300 government buildings across Egypt, and when completed will
connect some 32,000 buildings at a total cost of 6 billion Egyptian Pounds
(approximately $375 million).

The New Administrative Capital (NAC), 30 miles east of central Cairo, is expected to
eventually house most central government offices, with a target move-in date of mid-
2021. The government is planning for the NAC to be a “Smart City,” and is investing
heavily in the new city’s telecommunications and ICT infrastructure. The first phase of
“Knowledge City,” which will be located inside the NAC, is completed. It will include
applied research centers for technology to facilitate technical training, software and
applications development, and data design. The Knowledge City is estimated to cost a
total of 12 billion Egyptian Pounds ($750 million). Within the city, they are planning to
establish Creative Innovation Hubs that will provide technical assistance to promote
innovation and entrepreneurship.

The Ministry is also working on developing six technology parks in the cities of Minya,
Menoufiya, Mansoura, Sohag, Qena and Aswan. These parks are aimed at supporting
entrepreneurship and innovation and will consist of hardware design labs, startup
incubators and training institutions and integrated systems for AI training, data science,
and cybersecurity. The ICT industry in Egypt is managed by MCIT. It oversees the
following organizations:

 National Telecom Regulatory Authority – NTRA

 IT Industry Development Agency – ITIDA
 Egypt Post
 Information Technology Institute – ITI
 National Telecommunication Institute – NTI
 Center for Documentation of Cultural and Natural Heritage – CULTNAT
 The Technology Innovation and Entrepreneurship Center – TIEC
 Smart Villages
 Silicon Waha
 Technology Development Fund

Some of new trends in digital software:

Augmented Reality
Whether it's filters on Instagram or interactive games, Augmented Reality has also
ceased to be a promise of the future and instead entered our daily lives. Especially
through the cell phone, which we carry all the time, and its camera and sensors, the
technology allows us to superimpose virtual objects onto real environments. In the
case of furniture, augmented reality applications serve, above all, to locate desired
objects in a real space, giving a better sense of scale, color, and how the
environment will look in the future.
Internet of Things (IoT)
The Internet of Things (IOT) refers to the digital interconnection of everyday
objects with the internet and among themselves. Appliances, vehicles, public
equipment, and other objects equipped with sensors and connection to the network
collect and transmit data. This makes it possible, first, for these objects to be
controlled remotely via cell phones or computers, and, second, for the objects
themselves to be used as Internet Access Providers.

Artificial Intelligence
When we open Netflix, lying on the couch, the artificial intelligence of the app is
already working to recommend us movies and series that may interest us. Or when
we want to know the fastest way to an address, a maps application uses several
operations to give us an adequate answer, which may even change during the route.
The term Artificial Intelligence is often applied to the ability of a machine or system
to reason, discover meaning, generalize, or learn from previous experiences.
Environmental factors:
Egypt is a developing country with serious water issues. The problem is becoming more
prominent with the climatic change. While climate change has been caused primarily by
developed countries, developing countries, including Egypt, are experiencing the worst
consequences of the unsustainable development practices of industrialized states,
including desertification, and salinization of viable agricultural land as a result of rising
sea levels. Major water source of Egypt is river Nile which is being polluted by industrial
dumping. After the construction of Aswan Dam the flow of river water is reduced and
farmers are forced to use chemical fertilizers in order to compensate for all the fertile silt and
soil that was deposited by the river water. More importantly the storage of polluted
water means high concentration of pollutants as a result of which marine life is in
constant danger. Due to urbanisation and heavy wind storms the agricultural lands have
been reduced and thus a decreasing trend on agricultural. According to the Law 4/1994
for the Protection of the Environment, the Egyptian Environmental Affairs Agency
(EEAA) was restructured with the new mandate to substitute the institution initially
established in 1982. At the central level, EEAA represents the executive arm of the
Ministry.

The functions of the agency include:

- Formulation of Environmental policies

- Preparing the necessary plans for environmental development projects.
Following their proper implementation and undertaking pilot projects for
further development.
- The Agency is the National Authority in charge of promoting
environmental relations between Egypt and other States as well as
Regional and International organizations.
The environmental policy of the Government of Egypt seeks to achieve environmental
protection through the establishment of proper institutional, economic, legislative and
technical frameworks at the local, regional, national and international levels. This is
expressed through the seven directives of the policy statement of the ministry.

 Strengthening partnerships at the national level.

 Supporting bilateral and international partnerships in the environmental fields.
 Enforcing Law 4 of 1994 for the protection of the environment, and Law 102 of
1983 for Natural Protectorates and all other environmental legislation.
 Supporting institutional strengthening and capacity building for the Egyptian
Environmental Affairs Agency and Environmental Management Units (EMU's)
of the governorates.
 Supporting Integrated Environmental Management Systems.
 Integrate the use of market-based instruments in the field of environmental
protection.
 Transfer and adaptation of environmentally friendly technologies.
Within this policy framework, institutional and regulatory reforms are carried out,
aiming at the implementation of national environmental policy objectives and measures.
The judicial system (or judicial
branch) in Egypt, is an
independent branch of the
government
which includes both secular and
religious courts. The Egyptian
judicial system is based on
European and primarily French
legal concepts and methods. The
legal code is derived largely
from the Napoleonic Code. The
Egyptian legal system is built on
the combination of Islamic
(Shariah) law and N
The judicial system (or judicial
branch) in Egypt, is an
independent branch of the
government
which includes both secular and
religious courts. The Egyptian
judicial system is based on
European and primarily French
legal concepts and methods. The
legal code is derived largely
from the Napoleonic Code. The
Egyptian legal system is built on
the combination of Islamic
(Shariah) law and N
The judicial system (or judicial
branch) in Egypt, is an
independent branch of the
government
which includes both secular and
religious courts. The Egyptian
judicial system is based on
European and primarily French
legal concepts and methods. The
legal code is derived largely
from the Napoleonic Code. The
Egyptian legal system is built on
the combination of Islamic
(Shariah) law and N
Legal Factors:

The judicial system (or judicial branch) in Egypt, is an independent branch of the government
which includes both secular and religious courts. The Egyptian judicial system is based on
European and primarily French legal concepts and methods. The legal code is derived largely
from the Napoleonic Code. The Egyptian legal system is built on the combination of Islamic
(Shariah) law and Napoleonic Code, which was first introduced during Napoleon Bonaparte’s
occupation of Egypt and the subsequent education and training of Egyptian jurists in France. The
Egyptian legal system, being considered as a civil law system, is based upon a well-established
system of codified laws. Egypt’s supreme law is its written constitution. With respect to
transactions between natural persons or legal entities, the most important legislation is the
Egyptian Civil Code of 1948 (the “ECC”) which remains the main source of legal rules applicable
to contracts. Much of the ECC is based upon the French Civil Code and, to a lesser extent, upon
various other European codes and upon Islamic (Shariah) law (especially in the context of
personal status).

The Legislative Power: Parliament The legal System of the parliament is geographically located
in Cairo. As the legislative authority, it has the power to enact laws, approve general policy of
the State, the general plan for economic and social development and the general budget of the
State, supervise the work of the government, ratify international conventions, and the power to
vote to impeach the President of the Republic or replace the government and its Prime Minister
in a vote of no-confidence.

People’s Assembly: The People’s Assembly under the new Constitution was founded in 1971 as
a result of the adoption of the new Constitution It is considered to be the lower house of the
two, though it has a greater number of deputies, 454 deputies to be precise, 444 of them are
directly elected, while the remaining ten are appointed by the President. Farmers and Workers
make up half of the assembly since the Constitution invokes that there be many seats open for
them, one per each two seat constituency. The Assembly sits for a five years term but can be
dissolved earlier by the President. The judicial Power consist of court system which is considered
to be the third and independent authority of the State, the Egyptian Judiciary is comprised of
secular and religious courts, administrative, non-administrative courts and a Supreme
Constitutional Court, and penal courts, civil and commercial courts, personal status and family
courts, national security courts, labor courts, military courts, as well as other specialized courts
or circuits. Then next comes the supreme Constitutional Court which is an independent body in
the Arab Republic of Egypt. It is currently located in the Cairo suburb of Maadi.

Egyptian State Lawsuits Authority The Egyptian State Lawsuits Authority is an Egyptian judicial
institution that was established in 1874, nine years before the Egyptian national courts were
established in 1883.

Court’s Jurisdiction: Courts Jurisdiction consist of general courts and administrative courts.

Law and order situation in Egypt is never stable as it’s a constant tug of war between military

In accordance with the provisions of Investment Law, wood industry is one of the activities
subject to aforementioned Law. Moreover, the State gives attention and incentives to such
activity.

Companies incorporated for such purpose may be incorporated in accordance to the provisions
of Investment Law, Companies Law, and Commerce Law as per the desire of the owners.

There are some legal limitations that must be taken into consideration to obtain the activity
license from the concerned bodies, which are as follows:

 The Governorate having jurisdiction over the land and its affiliated local units, or the
City Hall.
 Licenses obtained from the Industrial Development Authority (IDA).
 Necessary health licenses required from the Ministry of Health.
 Civil defense and fire requirements.
In case of export, the project must obtain an import card indicating the nature and description
of the products, or export through an intermediary company that undertakes the export and
customs release procedures on behalf of the project.