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AfricaApril 10 2020

Egypt’s minister of planning looks to steady the ship

Egypt’s minister of planning and economic development, Hala El Saeed, talks to John Everington about stabilising the economy and attracting foreign investment.
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Hala El Saeed

Hala El Saeed

Q: What have been the highlights of Egypt’s recent economic development strategy?

A: Egypt has embarked upon an ambitious and challenging homegrown economic programme since 2016. The objectives of this programme were to adjust imbalances in the Egyptian economy and unsustainable fiscal businesses, while at the same time achieving macroeconomic stability for sustainable and inclusive economic growth. We have undertaken a set of targets [as part of the Egypt 2030 initiative] and the Egypt 2030 development agenda is aligned with [the UN’s Sustainable Development Goals 2030 target] and [the African Union’s] Africa Agenda 2063.

Three years on from the start of our practical adjustment programme we can confidently say that we have achieved the target and we were able to stabilise the economy, which is evident from the increase in economic growth compared with 2012. Unemployment declined from 13.3% in 2012/2013 to 7.8% in the first quarter [of 2020]. We also managed to curb inflation, [which] spiked to about 33% in 2017. It went down to 2.7% in [December 2019]. On average in 2019 we had inflation at about 7%.

At the same time reserves reached $45bn, from $13.3bn in March 2013. We are also confident about continuing economic growth, and after achieving stabilisation we have to continue with structural reforms. We have to work more on the supply side of the economy.

Q: What sectors are the priorities for growth in the coming years?

A: The government of Egypt has identified six main sectors of the economy – tourism, energy, mining, telecoms, logistics and manufacturing – that are crucial to [our] sustainable and balanced economic growth. We are also embarking on structural measures in these sectors in order to make sure that we achieve sustainable economic growth and that these sectors all have the potential for investment.

Egypt as a country is privileged [to have] a diversified economy with young inhabitants: 60% of our population is under the age of 30.

Q: Beyond its attractive demographics, what are Egypt’s key selling points for foreign investors?

A: During the past two years we have worked on providing an enabling environment for foreign direct investment and enhanced private sector participation. We have invested a lot in infrastructure programmes. In the [World Economic Forum’s] Global Competitiveness Index Egypt ranked 93rd in 2019 compared with 119th in 2015.

We believe that the private sector is the agent of economic growth, so we have also started the first Egypt sovereign wealth fund to be an accelerator for the private sector and a practical example of a public-private partnership.

Q: Egypt has in recent years announced the construction of 14 new cities, including a new administrative capital. How important are these new cities for attracting foreign investment and the country’s overall attractiveness as an economy?

A: The new cities have multi-dimension attractiveness. [First,] they keep the pressure off the population on different areas. Second, they improve the quality of [life for] people and this ensures the safety and security of the country, which is the major thing [that will persuade] any foreign investor to come in.

All of these cities are sustainable [and therefore serve] to enhance renewable energy. The top floor of buildings in these cities are basically [generators] of solar and renewable energy. In addition to that, in some of the cities we also have some industrial clusters that we provide for small and medium-sized enterprises, and different economic clusters to increase the value chain and localise lost industries that used to [thrive in Egypt].

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Read more about:  Africa , Egypt
John Everington is the Middle East and Africa editor. Prior to joining The Banker, John was the deputy business editor of The National in the UAE, and has also worked for Dealreporter, Arab News and The Telegraph. He has also covered the telecom sector in Africa and the Middle East, living and working in Qatar and the UK. John has a BA in Arabic and History and an MA in Middle Eastern Studies from the School of Oriental and African Studies (SOAS) in London.
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