The country’s finance minister on efforts to leverage regional integration efforts
Despite a significant shock from Covid-19, Egypt has proven more resilient than its peers. On top of being among a handful of developing nations to post positive economic growth during the pandemic, Egypt’s economy is forecast to expand by a further 5.6% in 2022, according to the IMF.
Data from fDi Markets indicates greenfield foreign direct investment (FDI) into Egypt rebounded strongly in 2021 to reach more than $5.6bn, albeit still well below the all-time high of $40.7bn recorded in 2016.
Egypt’s minister of finance, Mohamed Maait, sat down with fDi to discuss the country’s main economic development priorities, as well as efforts to become a regional trading hub serving Africa and the Middle East.
Q: What are your main economic development priorities?
A: We’re focused on continuing efforts on several fronts, such as ensuring sustainable economic growth, creating jobs and social protection networks, fiscal consolidation and macroeconomic stability in the context of the IMF-supported reform programmes.
Our key success indicators include achieving a sustained primary surplus level of 2% of gross domestic product (GDP); bringing our debt-to-GDP to below 85% of GDP by fiscal year 2024/2025; and achieving a sustained real economic growth of around 6% over the medium term.
We have also tripled our public investment in the past four years to improve infrastructure and human capital development, as well as targeted support for the manufacturing sector and export promotion. By 2024, we aim to increase the contribution of the private sector to our economy from its current level of 26% of GDP to around 50% of GDP.
Q: Egypt’s population is increasing by around two million people per year. Which sectors are a priority for FDI and job creation?
A: Egypt has demographic pressure, from an increasing population and about one million new people entering the labour market each year. We need FDI in every sector to create jobs, but manufacturing is the most important. Other priority sectors include oil and gas, construction and transportation.
Q: How do you strike a balance between attracting FDI in fossil fuels and transitioning to renewables?
A: By 2050, we should be concentrating heavily on renewable energy. But from now until 2050 there will be a transition period. Oil and natural gas prices are soaring at the moment, so with production in Egypt we could save billions of dollars on imports.
Q: How are you promoting Egypt as a trading hub for the Middle East and north Africa?
A: We are improving physical and digitalised infrastructure to help facilitate trade, monitoring and evaluation, as well as custom process rendering. This will make doing business in Egypt easier and more cost efficient.
For example, we have an advanced cargo information system that allows us to track all of Egypt’s imports and exports, and send notifications to importers within 48 hours.
Egypt can become a trade and business hub within the African and Middle East regions, attracting more FDI and building better connections in areas key to the post-pandemic era, such as communications, manufacturing and export-related sectors.
Q: Some investors cite human rights abuses as a deterrent to investing in Egypt. How would you respond to these concerns?
A: Egypt is putting human rights as a top priority. We think that our people deserve better health services, better education, better living standards, better utilities, better jobs. […] We are working very hard to ensure that we can achieve this for our people. We cannot allow [conflict to force] our 103 million Egyptians to live in camps, or live in tents, or to be asking for somebody to give them some food to eat [like what has happened in some other countries in our region].