Egypt’s textile industry has come under significant pressure as difficult economic conditions and the impact of the COVID-19 pandemic have resulted in factory closures, lower production levels and growing concerns over employment across one of the country’s most important manufacturing sectors.
According to Egyptian MP Enas Abdel Halim, recession and deteriorating economic conditions resulted in the closure of around 30% of textile factories. Many of the mills that remained operational also reduced their production capacity by between 50% and 70%.
The situation has been particularly challenging in Mahalla El-Kubra, one of Egypt’s best-known centers for textile manufacturing and home to a large concentration of spinning, weaving and dyeing companies.
Mahalla Textile Factories Face Challenges
Egypt previously had around 1,260 registered spinning, weaving and dyeing factories in Mahalla. However, only about 320 factories, employing approximately 120,000 workers, were reported to remain operational at the time.
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Abdel Halim raised concerns about the decline and called for Minister of Trade and Industry Nevin Jame to be questioned in parliament over the situation facing the textile sector.
She also warned the government against neglecting the industry, highlighting the potential consequences of continued factory closures and declining production for workers and the wider economy.
Egypt’s Unemployment Rate Increases
The challenges facing textile manufacturers emerged alongside a broader rise in unemployment caused by the economic disruption of the COVID-19 pandemic.
According to Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS), the country’s unemployment rate reached 9.6% in the second quarter of 2020, compared with 7.5% during the same period in 2019.
The increase reflected the wider impact of pandemic-related restrictions and weaker economic activity on businesses and employment.
As a major source of industrial employment, Egypt’s textile sector plays an important role in the national economy. Supporting factory recovery, modernizing production facilities and improving competitiveness will therefore be important for protecting jobs and strengthening the long-term position of Egypt’s spinning, weaving and textile industries.
