The government is looking to restore the private sector’s contribution to GDP to 67% over the next three years, Minister of Planning and International Cooperation Ashraf El-Araby said Sunday.
The remarks came during the American Chamber of Commerce’s “Unleashing the potential of the private sector in Developing Egypt” press conference. “In 2011, the share of the private sector in the GDP in investments used to be 65% of GDP, however, during the past three years, this share deteriorated to around 60%,” the minister said.
El-Araby stressed that the private sector “has always been and will continue to be the main player in the Egyptian economy.”
The minister added that the government is aware of the challenges that might face the private sector in Egypt, but stressed that overcoming these challenges would be “crucial”.
“The first challenge, or the big one, is how to restore the political stability,” the minister said, but said it was an issue where the country is on the right track.
El-Araby mentioned that the “constitution has put in place a new political structure that regardless of who ends up winning has important checks and balances.”
To have a clear vision that will encourage the private sector, the Ministry of Planning and International Cooperation has started formulating 10 pillars for its Sustainable Development Strategy Egypt 2030. The plan’s pillars include promoting political freedom, economic development, social justice, education, institutional development, environment, research and innovation.
The ministry will soon launch a website in social media for outreach and social inclusion and engagement in the strategy formulation, El-Araby said.
The ministry added the Egyptian Regulatory Reform and Development Activity (ERRADA) initiative will be reactivated within two months. The initiative, which was established in 2008 with the aim of supporting the government’s effort in managing the regulatory system for the business environment in Egypt, was deactivated in 2011.
“The government has not yet decided the affiliation of ERRADA but most probably it will be affiliated to the Ministry of Trade, Industry and Investment,” the minister said.
Earlier this month, the cabinet approved an additional “exceptional” tax of 5% on individuals with an annual income exceeding EGP 1m for a period of three years, known as the “wealth tax”. Some private sector officials have expressed their concern regarding the law, arguing that it will repel investments.
The Minister of Planning and International Cooperation reaffirmed that the wealth tax was originally a proposal from the private sector.