Hala El Said
How would you characterise Egypt’s economic development today?
The economy is moving on an upward trajectory. We are aiming to achieve gross domestic product [GDP] growth of 5.8% in the fiscal year 2018/19, before hitting 6.2% and 6.6% in 2019/20 and 2020/21, respectively. In addition, the government has launched a four-year medium-term development plan, which covers the period from 2018 to 2022. By the end of this period we are hoping to achieve GDP growth of 7%.
What’s more important than the growth rate is the constituent components of the country’s growth. In the past, our growth was driven by consumption rather than investment. Now our growth is coming from investment. What is also important is where this growth is coming from; every sector of the Egyptian economy is today adding value.
Q: What steps are the government taking to tackle unemployment?
A: In 2014, the unemployment rate was at 13%. Now it is 11.3%, so the unemployment numbers are heading in the right direction. But, of course, it is not enough. We are targeting an unemployment rate of 8% by the end of the four-year medium-term plan. To do this we are aiming to create 850,000 to 900,000 jobs every year. The number of Egyptian graduates every year is between 650,000 to 750,000, so we need to absorb these graduates while addressing the numbers of the existing unemployed.
Q: Are these targets for job creation realistic?
A: Over the past year, about 850,000 jobs have been created in the economy – so it’s realistic based on what we have achieved over this timeframe. I know a lot of this employment is, at the moment, coming from mega-projects and public investment. But these investments are vital because Egypt has suffered from a lack of investment in its infrastructure in previous years. The country needed a big boost; that’s why a lot of funds have been provided to develop the country’s infrastructure and pave the way for the private sector to grow.
Today we are ready for the private sector, both in terms of physical infrastructure and in terms of our legislative reforms. Once the private sector begins to invest and expand off the back of our infrastructure investments, it will be able to generate a significant number of jobs. Looking ahead, the extractive industries will be important in terms of job creation, as will agribusiness and petrochemicals, among many other sectors.
We are ready for the private sector, both in terms of physical infrastructure and in terms of our legislative reforms
Q: What will the passing of the unified planning law mean for Egypt’s development?
A: I believe that real development happens from the bottom up. It happens at the level of the governorate and not from the central administration. This law ensures that a big portion of investment goes through the regional governorates and [caters to] their needs.
Previously, a minister would say that investment was needed in this location or that location. These decisions weren’t being driven by the governorate. So we have to give the governorates independence in determining what they need and what their priorities are. But moving to decentralisation is not easy; if the governorates don’t have the capacity or calibre to handle increased resources it will be difficult. So we are moving gradually towards decentralisation.
This year I am increasing the flow of funds to Egypt’s governorates and these funds are targeting development gaps based on various human development indicators, including population and unemployment rates, the density of schools and so on. I am trying to close the development gaps in some of the governorates to improve their economic and social situation.
We are also enhancing the capacity of the civil servants working in the governorates. This is being done in order for them to start understanding financial issues and to learn how to design a development strategy.
