Reviews | Building a more inclusive, resilient and integrated post-COVID-19 Egypt
In the face of the novel coronavirus (COVID-19) pandemic, the Egyptian economy has shown resilience, strength and agility.
The national economy, which grew 3.5% in 2020, was one of the few in Africa to show positive growth for the year. Indeed, Egypt has weathered the crisis well thanks to its macroeconomic stabilization and recent efforts to improve outcomes in health, education and economic diversification.
At the same time, the pandemic has accentuated pre-existing vulnerabilities in many economies around the world, halting and in some cases reversing significant progress made in recent years.
The Egyptian economy has also been deeply affected, with trade and supply chains disrupted, and tourism and other industries hit hard. Yet, as we look to the future, we do so with confidence, hope, and a sharper focus.
The rebound from the pandemic offers an opportunity to tackle some long-standing structural weaknesses and to rebuild faster and stronger.
A more inclusive Egypt is an Egypt that continues to improve the lives of its citizens. Micro, Small and Medium Enterprises (MSMEs) dominate the country’s private sector and employ nearly 80% of the country’s workforce.
Alongside the Egyptian authorities since 2004, the African Development Bank (AfDB) has supported MSMEs and promoted entrepreneurship by providing financing, training and technical assistance to businesses and entrepreneurs.
We will continue to work with the Egyptian government to strengthen the business environment and facilitate access to financial and non-financial support for MSMEs, thereby helping to accelerate recovery from the COVID-19 crisis.
Our aim is to unleash the potential of the private sector to create wealth and jobs, and to help all Egyptians realize their aspirations for a decent and dignified life. In particular, young people are an asset with great potential. Together, we will create new opportunities for inclusive and youth-focused growth in Egypt.
Together, we will also ensure that growth provides financing for women in Egypt as well as opportunities for working populations living in Upper Egypt and in remote areas.
Additionally, and to complement the government’s efforts to mitigate the impact of the pandemic, we have provided an emergency aid grant of $ 500,000 in 2020 for food aid and to help restore livelihoods. severely affected vulnerable populations.
A more resilient Egypt is an Egypt that continues to develop its economic infrastructure to foster sustainable growth. In 2020, we provided a $ 270 million budget support loan to the Egyptian power sector to build economic resilience and sustainability in the context of the ongoing pandemic.
The Bank has been a long-standing partner in the country’s transformational reforms and the development of its energy sector. Our support includes funding for electricity production in Benban, as part of the Feed-in-Tariff solar program, as well as the Ain Sokhna and Suez power plants.
In the water sector, the Gabal El-Asfar treatment plant in eastern Cairo, the largest such facility in Africa and the Middle East, received $ 58 million in Bank financing , and the Abu Rawash treatment plant in Giza $ 150 million.
The two factories contribute to the economic development of the surrounding region, particularly agriculture by providing treated wastewater to irrigate agricultural land and produce organic fertilizers.
In Upper Egypt, the Bank is supporting rural sanitation in Luxor Governorate with total funding of $ 120 million, to significantly improve access to sanitation services.
A more integrated Egypt is more connected globally and within the African continent. To position Egypt for a rapid and sustainable recovery, it remains essential to focus on strengthening competitiveness and integration into the global economy.
The Bank commissioned a study for the Suez Canal Economic Zone (SCZone) on the skills needed for the jobs of tomorrow, with the objective of helping to secure a suitable workforce for those who invest in the zone.
Furthermore, as many global economies turn in on themselves, we see great potential for closer African integration in the medium term. Despite enormous trade and investment opportunities in the region, intra-regional trade in North Africa is among the lowest of any region in the world (less than 5%) and represents an opportunity in itself.
In addition, the prospects for greater cooperation with sub-Saharan Africa are immense. The Egyptian private sector has shown keen interest in strengthening cooperation between North Africa and the rest of the continent.
This is reinforced by the entry into force of the African Continental Free Trade Area (AfCFTA), which provides for the elimination of at least 90% of tariff barriers on goods from other African states over a period of 5 to 15 years, and is expected to boost intra-African trade.
We would like to support the Egyptian government’s strategic efforts to seize opportunities with other African countries, and we are intensifying dialogue with the private sector to support its investments on the continent.
Egypt’s young and educated population, its growing competitiveness and the potential of its private sector give us reason to be convinced that the country can weather the COVID-19 crisis. We predict that a second wave of bold economic reforms will allow Egypt to emerge stronger and more resilient than before.
In every crisis there are opportunities. By working together and reinventing the way we act and think, we will capture them.
Malinne Blomberg, Egypt Country Manager of the African Development Bank